E-commerce florist and gift retailer 1-800-FLOWERS (NASDAQ:FLWS) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 12.6% year on year to $331.5 million. Its non-GAAP loss of $0.71 per share was significantly below analysts’ consensus estimates.
Revenue: $331.5 million vs analyst estimates of $364.2 million (12.6% year-on-year decline, 9% miss)
Adjusted EPS: -$0.71 vs analyst estimates of -$0.34 (significant miss)
Adjusted EBITDA: -$34.92 million vs analyst estimates of -$12.43 million (-10.5% margin, significant miss)
Operating Margin: -58.4%, down from -6.4% in the same quarter last year
Free Cash Flow was -$160 million compared to -$121.4 million in the same quarter last year
Market Capitalization: $360.6 million
“While we are deeply disappointed by the quarterly results, we are steadfast in our commitment to turning this underperformance around,” said Jim McCann, Executive Chairman and current Chief Executive Officer of 1-800-FLOWERS.COM.
Founded in 1976, 1-800-FLOWERS (NASDAQ:FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, 1-800-FLOWERS grew its sales at a sluggish 5.1% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a poor baseline for our analysis.
1-800-FLOWERS Quarterly Revenue
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. 1-800-FLOWERS’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9.9% annually.
1-800-FLOWERS Year-On-Year Revenue Growth
We can dig further into the company’s revenue dynamics by analyzing its most important segments, Gift Baskets and Flowers, which are 32.3% and 59.1% of revenue. Over the last two years, 1-800-FLOWERS’s Gift Baskets revenue (food and fruits) averaged 81,656% year-on-year growth while its Flowers revenue (floral products) averaged 88,508% growth.
This quarter, 1-800-FLOWERS missed Wall Street’s estimates and reported a rather uninspiring 12.6% year-on-year revenue decline, generating $331.5 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 6% over the next 12 months. While this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average.
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Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
1-800-FLOWERS’s operating margin has been trending down over the last 12 months and averaged negative 4.5% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.
This quarter, 1-800-FLOWERS generated a negative 58.4% operating margin. The company’s consistent lack of profits raise a flag.
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for 1-800-FLOWERS, its EPS declined by 24.2% annually over the last five years while its revenue grew by 5.1%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.
1-800-FLOWERS Trailing 12-Month EPS (Non-GAAP)
In Q1, 1-800-FLOWERS reported EPS at negative $0.71, down from negative $0.28 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast 1-800-FLOWERS’s full-year EPS of negative $0.58 will reach break even.
We struggled to find many positives in these results as its revenue, EPS, and EBITDA fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 8.4% to $5.31 immediately after reporting.
The latest quarter from 1-800-FLOWERS’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
