What happened
Shares of online retailer 1-800-Flowers.com (FLWS) opened the trading day soundly in positive territory, gaining as much as 8%. But shortly thereafter they started falling, dipping as much as 13% in the 2 p.m. EST hour. By 3:30 p.m., the shares were still deeply in the red, off by about 9%. From peak to trough the stock moved more than 20% today, which is a pretty big swing.
So what
There was one notable event here today, with 1-800-Flowers.com posting fiscal second-quarter 2021 earnings. The numbers were pretty impressive, with the top line advancing some 45% year over year and earnings up by more than 50%. Leading the way was the company's online commerce operations, where sales increased just a hair shy of 60%. The $1.71 per share in quarterly earnings also handily beat the Wall Street consensus of $1.39. The online retailer had a good quarter just about any way you look at it.
Image source: Getty Images.
However, it continues to hold off on full-year fiscal 2021 guidance, despite the fact that the year is more than half over and that it provided fiscal third-quarter guidance. The projection there is for a loss of between $0.09 and $0.11 a share, which might not sit well with some investors enamored of the company's strong online performance during the pandemic. That said, the business is highly seasonal, with the end-of-year holiday season by far the company's strongest, with a big drop-off in the fiscal third quarter the norm here. Only Wall Street analysts had been looking for a loss of $0.08 per share, which means that 1-800-Flowers.com is telling investors to pull back their expectations.That's likely the culprit behind the stock swinging from up 8% at the open to down around 10% or so today in the last hour of trading.
Now what
Investors have driven the shares of 1-800-Flowers.com higher by over 160% since April 2020, near the depths of the coronavirus bear market. A lot of good news has been priced in and, in many ways, the company has lived up to expectations. However, after such a large run, it's not surprising to see investors take a little money off the table given management's below-consensus outlook for the upcoming quarter and its unwillingness to provide full-year guidance for fiscal 2021. Basically, it has two quarters in the bag, along with a projection for the third quarter, and is unwilling to speculate about the fourth quarter. It leaves one to wonder if 1-800-Flowers.com is worried that revenue and earnings fall off when people can more easily shop in physical stores again. That's not an unreasonable concern given the pandemic-driven online sales boost from which 1-800-Flowers.com seems to have benefited.
