Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of 1-800-Flowers.com Inc. (NASDAQ:FLWS) jumped more than 13% early Monday after the floral and gourmet foods gift retailer released better-than-expected fiscal second-quarter 2015 results.
So what: Adjusted quarterly revenue more than doubled on a year-over-year basis, to $549.7 million, thanks primarily to 1-800-Flowers' September acquisition of Harry & David. This includes both a $13.8 million negative impact to sales from a Fannie May Fine Chocolates warehouse fire in November and a $1.6 million adjustment for deferred revenue related to the acquisition. All told, that translated to adjusted earnings per share that more than tripled to $0.83.
Analysts, on average, had only modeled adjusted earnings and revenue of $0.80 per share and $538.6 million, respectively.
1-800-Flowers.com CEO Jim McCann also noted all three of its business segments achieved top-line growth of 5% apart from the acquisition, and reminded investors the company's insurance policies covered the losses incurred from the fire, including material losses and business interruption.
Now what: 1-800-Flowers.com reaffirmed fiscal 2015 guidance for revenue from continuing operations "in excess of $1.1 billion"; adjusted earnings before interest, taxes, depreciation, and amortization of $90 million; and adjusted earnings per diluted share of $0.45 to $0.50. Analysts were modeling fiscal 2015 earnings of $0.47 per share on sales of $1.15 billion.
Finally, McCann said the company has launched a "comprehensive integration program" aimed at pursuing operating synergies and revenue growth opportunities for Harry & David. Under this program, management believes it can generate $15 million in operating cost savings over the next three years.
All things considered, given 1-800-Flowers' challenges and solid execution during its key holiday season, I can't blame the market for bidding up the stock today.
Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.