The decline added to sharp paper losses for investors; so far this year the stock is down by more than a quarter.
May's swoon came after FTD posted first-quarter results that showed a business in retreat. Sales slipped thanks to a decline in order volume that swamped a small uptick in average spending per order. Management warned that the trends will require bold, and likely expensive, changes to address. "FTD has many positive assets to build upon," CEO John Walden said in a press release. "However," he explained, the company "continues to be challenged by historical underinvestment."
The executive team believes the only way to turn operating trends higher again is through steady improvements in the customer experience. FTD also must do a better, more efficient job at acquiring new customers, they said.
Walden and his team are conducting a thorough review of their strategic options that they'll share with investors as soon as it's complete. In the meantime, FTD is expecting flat sales for the full 2017 year. That might sound like good news, but the company also predicts its adjusted profitability will decline sharply -- falling to as low as 8% of sales from 11% last year.
The difference can be explained mainly by the higher marketing spending that's required to protect order volumes. Given that demand weakness, it's possible shareholders will see further profit-crimping spending initiatives in the future.