1-800-Flowers.com, Inc. (FLWS), a leading floral and food gift retailer, reported disappointing fourth-quarter earnings for fiscal 2024, falling short of analyst expectations. The company announced an adjusted earnings per share (EPS) loss of 34 cents, missing the consensus estimate of a 27-cent loss. Additionally, revenue came in at $360.9 million, a 9% decrease year-over-year and below the anticipated $374.4 million.
Despite the negative financial performance, 1-800-Flowers.com highlighted positive developments in its operational efficiency. The company achieved a 130 basis point increase in its gross profit margin, reaching 38.4%, driven by lower freight costs, reduced commodity prices, and optimized logistics. Operating expenses were also reduced by $5.8 million, reaching $166.2 million. These positive trends resulted in a slight improvement in adjusted EBITDA, though the company still reported a loss of $8.8 million, compared to a loss of $6.6 million in the previous year.
The company’s Gourmet Foods and Gift Baskets segment witnessed a 12.8% decline in revenue, reaching $105.2 million. The Consumer Floral & Gifts segment also experienced a 6.7% decrease in revenue, settling at $231.6 million. BloomNet, a subsidiary that handles lower-margin orders, faced a significant 18.7% decline in revenue, reaching $24.4 million.
In a statement, Jim McCann, Chairman, and CEO of 1-800-Flowers.com, attributed the company’s performance to the challenging consumer environment, particularly affecting discretionary spending among lower-income households. He emphasized the company’s ability to navigate these conditions by achieving growth in adjusted EBITDA, a measure of profitability, through cost optimization efforts.
Looking ahead to fiscal 2025, 1-800-Flowers.com expects revenue trends to improve as the year progresses. The company anticipates a slight revenue decline or flat growth compared to the previous year, citing the continued challenging consumer environment. However, it anticipates revenue growth to be driven by factors such as expanded product offerings, adjusted price points, enhanced user experience, and increased marketing spend.
The company also anticipates an adjusted EBITDA of $85 million to $95 million and free cash flow of $45 million to $55 million for fiscal 2025.
On the leadership front, 1-800-Flowers.com announced that Bill Shea, Chief Financial Officer, will retire effective December 29, 2024. James Langrock has been appointed as the new CFO.
Following the earnings announcement, FLWS stock experienced a significant decline of 12.40%, closing at $7.88 per share.
