Have you ventured outside to enjoy the mild winter with which global warming is gracing the U.S. this year? Seen any flowers trying to bloom early? Well, by happy coincidence (and awkward segue), 1-800-Flowers (NASDAQ:FLWS) will also be blooming early on Thursday, when it unfolds its fiscal Q2 2006 earnings numbers before the market opens.

Wall Street Wisdom:

  • General consensus. Everybody loves flowers -- even analysts. Of the 11 who track the company's stock, five rate it a "buy," five more give it a "hold," and just one marks it as a "sell."
  • Revenues. Wall Street expects big things out of this little company -- specifically, 19% revenue growth to $274.1 million .
  • Earnings. . and 54% growth in earnings to $0.20 per share.

Margin watch:
Reviewing the company's recent "rolling" trends in gross, operating, and net margins, I initially find little to support the five "buy" ratings attached to this company. True, the decline in gross margins has leveled out and stabilized, but operating and net margins continue to plunge unabated. From this Fool's perspective, that spells nothing good for 1-800-Flowers' investors.

Margins %

6/04

9/04

12/04

3/05

7/05

10/05

Gross

41.9

41.8

41.8

41.0

41.1

41.1

Op.

3.5

3.5

3.6

2.5

1.8

0.8

Net

6.8

7.1

6.2

5.3

1.2

0.6

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-months performance for the quarters ending in the named months.

Foolish lookout:
That said, in its fiscal Q1 earnings release back in November, the company promised improved margins later in the year. Overall, 1-800-Flowers guided investors to expect a 150-basis-point improvement in its gross margins and no increase in operating expenses. Logically, that should translate into a near tripling of the most recent "rolling" operating margin number. But remember: This was a forecast for fiscal 2006 as a whole. Don't expect to see the whole bump all at once -- but do keep an eye out for some movement in that direction tomorrow.

Competitors:
1-800-Flowers faces strong competition from rival FTD Group (NYSE:FTD), as well as from up-and-comer and Motley Fool Rule Breakers pick Provide Commerce (NASDAQ:PRVD).

Ready to think outside the box? Check out Rule Breakers, and let David Gardner steer you toward the market's best companies on the cutting edge. You can take the service for a free 30-day spin -- there's no risk.

Fool contributorRich Smithdoes not own shares of any company named above.