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 (NASDAQ:FLWS) rose as much as 21% on Tuesday morning (they were up 10% at 11:50 a.m. EDT) after the company came in ahead of Wall Street estimates with regard to revenues and earnings per share in its fiscal third quarter and, crucially, lifted its earnings per share guidance for its full fiscal year.

So what: Here's how the numbers shake out:



Analysts' Consensus Estimate

Q1 Revenues

$232.2 million

$230.4 million

Q1 Earnings per Share*




Company Guidance

Analysts' Consensus Estimate

2015 Revenues

>$1.1 billion

$1.14 billion

2015 EPS*



*Adjusted. Source: Thomson Financial Network, PROS Holdings

The quarterly loss must be understood in the context of a business that is highly seasonal – the earnings release is littered with references to this (although one must remain skeptical, as managements often abuse this phenomenon as an excuse for poor performance).

In this instance, while the newly acquired Harry & David's business (part of the Gourmet Foods and Gift Baskets segment) contributed significantly to revenue growth, its own seasonality dragged the company's bottom line into the red. Excluding Harry & David, eked out adjusted earnings per share on a diluted basis of $0.01.

Now what: Despite the accounting loss, remained profitable on a free cash flow basis (Foolish investors know that free cash flow trumps net income.) This looks like a decent (though not outstanding) business, with a narrow competitive advantage. Furthermore, the shares appear to be reasonably priced. Although they're not the sort of shares I would own (my preference is for outstanding franchises), I think shareholders can continue holding

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.