What Happened:
Shares of e-commerce florist and gift retailer 1-800-FLOWERS (NASDAQ:FLWS) fell 12.7% in the afternoon session after the company reported second-quarter earnings results. Its revenue and EPS fell short of Wall Street's estimates, and its full-year EBITDA guidance was underwhelming. Notably, demand for its offerings was impacted by what management considered a weak consumer environment. Overall, this was a weaker quarter.
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What is the market telling us:
1-800-FLOWERS’s shares are somewhat volatile and over the last year have had 15 moves greater than 5%. But moves this big are very rare even for 1-800-FLOWERS and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was about a month ago, when the company dropped 9.7% on the news that DA Davidson downgraded the stock's rating from Neutral to Underperform (Sell). The rationale behind the downgrade includes the analysts' conviction that "1-800-Flowers.com (FLWS) will issue soft FY25 guidance in light of recession-level consumer sentiment and anemic everyday gift giving, with rising cost inflation further driving down profitability."
1-800-FLOWERS is down 24.6% since the beginning of the year, and at $7.91 per share it is trading 29.9% below its 52-week high of $11.29 from December 2023. Investors who bought $1,000 worth of 1-800-FLOWERS’s shares 5 years ago would now be looking at an investment worth $522.80.
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