1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) experienced an adjustment in its stock rating and price target by DA Davidson. The firm upgraded the company's rating from Underperform to Neutral, while simultaneously reducing the price target from $8.00 to $7.00. This change follows the company's fourth-quarter financial results for fiscal year 2024, which did not meet expectations.
The analyst from DA Davidson noted that 1-800-FLOWERS.COM's fourth-quarter results were below projections, and the guidance for fiscal year 2025's EBITDA is anticipated to be less than the consensus estimate of $99.4 million.
The current consumer sentiment, which remains low, is seen as a contributing factor to potential delays in the company's return to positive sales growth.
Despite these challenges, 1-800-FLOWERS.COM has confirmed trends that align with Bloomberg debit card data, suggesting that the year-over-year sales change for the first quarter of fiscal year 2025 may not be as negative as previously experienced. This outlook has led to the belief that the market's expectations are now more realistically aligned with the near-term prospects of the company.
The stock has seen a significant decline, dropping 28% since July 16th. In light of this decrease and the recent financial updates, DA Davidson has revised its rating to reflect a more neutral stance.
The firm has also adjusted its price target and earnings estimates, basing the new target on a 5-times multiple of the company's projected calendar year 2025 EBITDA, which has been lowered from $106 million to $97 million.
The revised rating and price target by DA Davidson suggest a shift in perspective on the near-term risks and valuation of 1-800-FLOWERS.COM. The company's stock performance and financial outlook will continue to be monitored by investors as it navigates the current market environment.
1-800-FLOWERS.COM, a leading e-commerce provider, reported significant growth in its year-over-year EBITDA, which increased by $93.1 million. This growth comes despite a challenging macroeconomic environment and was largely driven by a substantial rebound in gross margin.
The company also revealed a change in its financial leadership, with CFO Bill Shea set to retire in December, and James Langrock, the current Chief Administrative Officer, ready to take over.
The e-commerce provider has also been focusing on strategic investments and innovation to enhance its top-line trends. These efforts include the recent acquisition of high-end chocolate company Scharffen Berger.
However, it's worth noting that the company's revenue experienced a decline due to macroeconomic factors, but it managed to reduce operating expenses by $22.2 million for the fiscal year.
The company anticipates its total revenue to be flat or experience a low single-digit decline for fiscal year '25. Adjusted EBITDA is expected to be in the range of $85 million to $95 million, with free cash flow between $45 million to $55 million. These are some of the recent developments for the company.
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