Will 1-800-Flowers.com Inc (FLWS)’s 2Q Earnings Triple?

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Will 1-800-Flowers.com Inc (NASDAQ:FLWS) be in a position to deliver earnings and revenue that would be nearly triple and double respectively from the year-ago quarter levels? If indications are to be believed, the company may be able to deliver. The holiday season should have been a big boost for online shoppers to buy gift items, especially for the company’s Harry & David Business. The company will announce its second quarter financial results on February 2 before the market opens.

Street analysts’ surveyed by Thomson Reuters and Zacks seem to be confident about 1-800-Flowers.com Inc (NASDAQ:FLWS) results given that there were no recent revisions from the analysts’ on the earnings expectations. Both the survey’s consensus estimations remained same in the last three-month period.

Harry & David Business Hold Key

The company’s Harry & David business holds the key for 1-800-Flowers.com in the quarter. For those not familiar with Harry & David, it is an American-based premium food and gift producer and retailer owned by 1-800-Flowers. Harry & David has a highly seasonal nature to their business with the majority of its revenues and most of its profits coming from the December quarter. While releasing first quarter financial results, the company indicated that Harry & David hoped to generate about 46 – 50% of total full-year revenues in the second quarter, that reports February 2nd.

Consumer Floral & Gourmet Foods and Gift Baskets

In the first quarter, 1-800-Flowers.com Inc (NASDAQ:FLWS)’s consumer floral revenues advanced 4% with category contribution margin advancing by close to 13% due to strict cost control measures. Similarly, Gourmet Food and Gift Baskets division witnessed 3.6% uptick. The company’s gross margin improved 40 basis points in the first quarter.

Expectations

The company generates nearly half of its full-year revenue from the December quarter or holiday season. Therefore, there was a strong expectation that the company would be able to achieve nearly 200% growth while revenue could have witnessed an uptick of 102.2%

This meant that 1-800-Flowers.com Inc should report earnings of 80 cents a share on revenues of $538.63 million for the second quarter, according to Thomson Reuters’ consensus estimations among the Street analysts’. In the fiscal year 2014’s second quarter, the company earned 27 cents a share on revenues of $266.34 million. Zacks’s earnings consensus estimate indicated two cents more at 82 cents a share.

Significantly, the company has not delivered any positive or negative surprise in the last four quarters of earnings results. 1-800-Flowers.com Inc (NASDAQ:FLWS)’s earnings came in line with the predictions. Therefore, given the spending during the holiday season, the company’s EPS is likely to meet expectations in the second quarter too.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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