What Happened?
Shares of e-commerce florist and gift retailer 1-800-FLOWERS (NASDAQ: FLWS) fell 4.1% in the morning session after the company reported a wider-than-expected loss for its second quarter, overshadowing a slight revenue beat.
The company posted an adjusted loss of $0.69 per share, which was significantly worse than the analyst consensus estimate of a $0.51 loss and a sharp decline from the $0.34 loss per share reported in the same quarter last year. Although quarterly revenue of $336.6 million came in slightly ahead of expectations, it still marked a 6.7% decrease compared to the prior year. Worsening profitability was a key concern for investors, as the company's operating margin shrank to negative 16.5% from negative 10.8% in the same quarter last year. Additionally, free cash flow burn more than doubled to $36.1 million from $17.2 million a year ago, highlighting increased financial pressures.
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What Is The Market Telling Us
1-800-FLOWERS’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 3.2% on the news that the broader market rallied as Federal Reserve Chair Jerome Powell signaled potential interest rate cuts in the coming months. The broader market rallied in response to comments from Fed Chair Jerome Powell at a high-profile symposium. Powell indicated the central bank might lower a key interest rate in the coming months, though he gave no specific timeline and suggested a cautious approach. Lower interest rates can stimulate the economy and boost consumer spending, which benefits retail companies like 1-800-FLOWERS. The S&P 500 index rose 1.4% following the remarks.
1-800-FLOWERS is down 37% since the beginning of the year, and at $4.92 per share, it is trading 45.9% below its 52-week high of $9.09 from February 2025. Investors who bought $1,000 worth of 1-800-FLOWERS’s shares 5 years ago would now be looking at an investment worth $189.45.
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