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Bull of the Day: 1-800-FLOWERS (FLWS)

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1-800-FLOWERS (FLWS - Free Report) is an online retailer known for floral arrangements and other special gift deliveries. The company has expanded its product selection over the years to include gourmet foods and home and garden merchandise, which has helped FLWS grow its customer base.

Q2 Earnings Beat & Raised Guidance

FLWS reported earnings of $1.12 per share, beating the Zacks Consensus Estimate of $1.09 a share.

Total revenues grew 6% year-over-year to $606 million thanks to strong performance in all three of its business segments: Gourmet Foods and Gift Baskets was up 5.6%, Consumer Floral up 7%, and BloomNet up 9.8%.

CEO Chris McCann said that Gourmet Foods and Gift Baskets’ Q2 performance represented over three-quarters of total consolidated revenues for the period. Sales were primarily driven by the company’s Harry & David brand and strong wholesale gift basket business.

FLWS raised its guidance for full year EPS and EBITDA as well.

It now expects earnings to grow 15-17% compared to the previous range of 8-10% growth. EBITDA is now set to increase 13-15% compared to 8-10%. FLWS also increased its 2020 free cash flow outlook to a range of $45 to $50 million.

Market Share Expansion

 

1-800 FLOWERS.COM, Inc. Price and Consensus

 

Shares of FLWS have only lost about 8.3% in value in the past three months compared to the S&P 500’s drop of 18.5%. Earnings estimates have been rising, and 1-800-FLOWERS is a Zacks Rank #1 (Strong Buy) right now.

For the current fiscal year, one analyst has revised their bottom line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up a penny to $0.60 per share; earnings could grow 15.4% compared to the prior year period. 2021 looks pretty strong as well, with earnings expected to continue double-digit year-over-year growth.

Management is confident that 1-800-FLOWERS is well positioned to expand market share in the second half of 2020, as well as to grow sales beyond key holidays like Valentine’s Day and Mother’s Day.

FLWS is also poised to benefit in the current coronavirus economy; the majority of Americans are now practicing social distancing and sheltering in place to help curb the spread of COVID-19. A company like 1-800-FLOWERS can provide an easy way to send friends and families gifts while we’re all stuck at home.

If you’re an investor searching for a niche retail stock to add to your portfolio, make sure to keep FLWS on your shortlist.

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