On Thursday, DA Davidson made an adjustment to the price target of 1-800-FLOWERS.COM (NASDAQ: FLWS), increasing it to $7.50 from the previous $7.00, while keeping a Neutral rating on the stock. This move comes despite the company reporting a weaker-than-expected performance for the first quarter of fiscal year 2025.
1-800-FLOWERS.COM experienced a revenue decline of 10% year-over-year, or 9% excluding the impact of a $3 million shift of wholesale shipments to the second quarter of fiscal year 2025. This performance fell short of consensus expectations, which projected a 9% year-over-year decrease. Despite this, the company has chosen not to adjust its full-year sales and EBITDA guidance for FY25.
The management of 1-800-FLOWERS.COM anticipates a significant uptick in sales during the second quarter of FY25. This expectation is based on the belief that consumers do not consider holiday gifting to be discretionary. The company’s annual guidance suggests that sales could be flat or possibly decline by low-single digits in the second quarter of FY25.
As a result of these developments, DA Davidson has revised its EBITDA estimates for FY25 and FY26 downwards and has introduced an initial EBITDA projection for FY27. The new price target of $7.50 is derived from a valuation of 5.0 times the firm's estimated CY26 EBITDA of $101 million. This adjustment reflects the firm's latest financial projections and market expectations.
In other recent news, 1-800-FLOWERS.COM reported a 10% decrease in consolidated revenue in its fiscal 2025 first quarter earnings call. This was attributed to a shift in wholesale orders and a dip in e-commerce performance. Notably, the company's Gourmet Foods & Gifts and Consumer Floral & Gifts segments saw revenue declines of 14.4% and 4.9%, respectively. Despite this, the company is optimistic about the upcoming holiday season and expects an increase in sales.
In addition, 1-800-FLOWERS.COM is launching new initiatives such as exclusive Harry & David pop-up shops in select Macy's (NYSE:M) locations. The company also expects revenue growth to be flat to mid-single digits down for fiscal 2025, with an adjusted EBITDA projected to be between $85 million and $95 million.
Moreover, the company is focusing on enhancing customer experiences and leveraging artificial intelligence in customer service. These are among the recent developments at 1-800-FLOWERS.COM as it navigates the consumer spending landscape with strategic initiatives and efficient cost management.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on 1-800-FLOWERS.COM's financial situation. The company's market capitalization stands at $531.74 million, with a revenue of $1.83 billion for the last twelve months as of Q4 2024. This represents a revenue decline of 9.24% over the same period, aligning with the article's mention of a 10% year-over-year revenue drop.
InvestingPro Tips highlight that while the company's stock price movements have been quite volatile, with a significant fall over the last three months, analysts predict that 1-800-FLOWERS.COM will be profitable this year. This prediction is particularly interesting given the company's recent performance and DA Davidson's decision to maintain a Neutral rating while raising the price target.
Another relevant InvestingPro Tip indicates that the company operates with a moderate level of debt, which could provide some financial flexibility as it navigates the challenging market conditions described in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for 1-800-FLOWERS.COM, providing a deeper understanding of the company's financial health and market position.
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