Gifts Retailer 1-800-FLOWERS Q4 Earnings Miss Expectations As Consumers Tighten Spending, CFO Bill Shea To Retire

Author: Vandana Singh | August 29, 2024 09:50am

Thursday, 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) reported fourth-quarter 2024 earnings below the expectations.

1-800-Flowers.com, a floral and food gift retailer and distributor, reported a fourth-quarter adjusted EPS loss of 34 cents, missing the consensus estimate of 27 cents loss.

The company reported sales of $360.9 million, down 9% year over year, missing the consensus of $374.4 million.

Also Read: 1-800-Flowers Analyst Warns Bloomberg Debit Card Data Shows Unfavorable Trends.

"In a dynamic consumer environment that impacted discretionary consumer spending, especially amongst lower-income households, our organization was able to grow year-over-year adjusted EBITDA, which benefitted from our significant gross margin recovery and our expense optimization efforts that more than offset the top line decline," said Jim McCann, Chairman, and CEO.

The gross profit margin increased 130 basis points to 38.4%, compared with 37.1% in the prior year, due to lower freight costs, a decline in certain commodity costs, and the company's logistics optimization efforts.

The operating expenses declined by $5.8 million to $166.2 million. Adjusted EBITDA loss for the quarter was $8.8 million, compared with an Adjusted EBITDA loss of $6.6 million in the prior year.

Gourmet Foods and Gift Baskets revenues declined 12.8% to $105.2 million. Revenue from the Consumer Floral & Gifts segment fell 6.7% to $231.6 million.

BloomNet revenues declined 18.7% to $24.4 million, impacted by the lower volume of lower-margin orders processed by BloomNet. 

Management: 1-800-FLOWERS.COM also announced that Bill Shea has confirmed his intention to retire as Chief Financial Officer, effective December 29, 2024. The company has appointed James Langrock as the new CFO.

Guidance: For Fiscal 2025, with a sustained, challenging consumer environment, the company expects revenue trends to improve as the fiscal year progresses, benefitting from the expanded product offerings, broadened price points, and enhanced user experience combined with increased marketing spend.

The company expects 2025 revenues to be flat to a decrease in the low-single digits, as compared with the prior year;

The company expects adjusted EBITDA of $85 million—$95 million and free cash flow of $45 million—$55 million.

Price Action: FLWS stock is down 12.40% to $7.88 at the last check on Thursday.

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Posted In: FLWS