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Benchmark: For First Time In Years, 1-800-Flowers Delivered A 'Complete Holiday Quarter'

February 1, 2019 12:43 pm
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1-800-Flowers.Com Inc (NASDAQ:FLWS) reported fiscal second-quarter results which marks the first time in years the company offered investors a "complete holiday quarter," according to Benchmark.

The Analyst

Benchmark's Daniel Kurnos maintains a Buy rating on Flowers.com with a price target lifted from $15 $18.

The Thesis

Flowers.com delivered the exact type of earnings report patient shareholders have been waiting for since 2015, Kurnos said in a research note. The report is highlighted by 8-percent growth in Consumer Floral, a surprising 8-percent increase in Harry & David revenue and 12-percent improvement in new customers.

Encouragingly, the earnings print also showed management's significant investments in Harry & David paid off with tangible results. The analyst said management also deserves credit for better attracting younger and tech-savvy customers.

It's apparent the "flywheel is finally starting to spin" and benefits seen in the reported quarter look to be sustainable. In fact, the company will now face a task of deciding what to do with its large amount of cash on hand. Some of the potential options include acquiring rival FAT Companies Inc (NASDAQ:FTD) if the struggling company puts itself or some of its assets up for sale.

Flowers.com looks to be on track to grow revenue in the 5 percent to 7 percent range and EBITDA by 8 to 12 percent, the analyst said.

Price Action

Shares of 1-800-Flowers.Com were trading higher by 2 percent at $16.25 Friday afternoon.

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UPDATE: Davidson On 1-800-Flowers.com: Management Could Guide Double-Digit Organic Sales Growth In 2022 Upon Testing Price Increases In Late Summer and Early Fall.