1-800-Flowers shares sink as retailer cuts outlook over waning consumer demand
Chris McCann, CEO, 1-800-Flowers
Scott Mlyn | CNBC
Valentine’s Day wasn’t enough for 1-800-Flowers last quarter.
Shares of the company, at one point halted for volatility, tumbled 17% Thursday morning, after the online retailer reported fiscal third-quarter results below analysts’ expectations and slashed its outlook for the year amid heightened inflation and waning demand for some of its gifts.
Chief Executive Officer Chris McCann said that solid demand around Valentine’s Day was offset by “overall slower consumer demand for everyday gifting occasions” during the three-month period ended March 27.
1-800-Flowers also saw continued, and in some instances escalated, macroeconomic cost headwinds, he said.
That was combined with waning demand from consumers, “reflecting growing consumer concerns with rapidly rising inflation and geopolitical unrest,” McCann said. The war in Ukraine, triggered by Russia’s invasion in late February, has created widespread economic turmoil.
The CEO said in a press release that he sees cost obstacles to continue in the near term, too.
1-800-Flowers, which also owns Harry & David, Shari’s Berries and PersonalizationMall.com, cited increased expenses for labor, shipping and marketing.
The company reported a fiscal third-quarter net loss of $23.4 million, or 36 cents per share, compared with net income of $1.4 million, or 2 cents per share, a year earlier. Excluding one-time items, it lost 32 cents a share, bigger than the 28-cent loss that analysts polled by Refinitiv had been looking for.
Revenue of $469.6 million was down 1% from the year-ago period. That was short of the $486.9 million that analysts were anticipating.
For fiscal 2022, the company projected revenue growth of 3% to 5%, short of the 6.7% growth that analysts had expected. The company had been calling for revenue growth of 7% to 9% for fiscal 2022.
The company has a market cap of $656.9 million, as of market open Thursday. Shares are down nearly 50% year to date.
“The current macroeconomy is highly unpredictable, with rising inflation and other factors impacting both costs and consumer demand,” said McCann. “However, it is important to note that we have faced challenging macro market conditions in the past and … we have emerged a bigger, better, and stronger company.”