Why 1-800-Flowers.com Stock Bloomed Today
Shares of 1-800-Flowers. com (NASDAQ: FLWS) closed Thursday's trading session 28.4% higher, following a rather sweet-smelling earnings report.
Second-quarter sales fell 4.8% year over year to $898 million, still exceeding Wall Street's consensus target of $895 million. On the bottom line, adjusted earnings of $1.28 per share crushed your average analyst's estimate of $0.95. The veteran of gifts and gift delivery services saw expanded its gross margins in gourmet foods and gift baskets with "strategic pricing" moves. Moreover, a stabilizing labor market and lower ocean freight costs also supported the company's strengthening profit margins.
CEO Bill Shea expects macroeconomic pressure points such as rising inflation, shipping service shortages, and tight consumer budgets to fade out fairly soon. So, in the long run, the weak sales of recent quarters should be remembered as a temporary trough rather than a structural deficiency in 1-800-Flowers' business model.
Source Fool.com
