Long ago, in 1907, poet James Terry White offered up some commentary, surprisingly relevant over 115 years later. “If thou of fortune be bereft and in thy store be but left two loaves—sell one, and with the dole, buy hyacinths to feed thy soul.” That advice may be relevant, but it hasn’t taken much, or so we discovered with 1-800 Flowers’ (NASDAQ:FLWS) recent earnings report. However, investors took the advice to heart and sent the stock up nearly 9% in Thursday afternoon’s trading.
1-800-Flowers’ earnings report was mostly a disaster, with some wins that came in basically by default. It posted a loss for the quarter of -$0.28 per share in earnings, but that wasn’t as bad as analysts expected. Revenue was not only a miss but also down nearly 18% against the fourth quarter of 2022. However, in a soul-feeding set of remarks, management looked for brighter days—and healthier stores—ahead.
While the first quarter of fiscal 2024 will likely prove difficult, a rebound with the holiday season is likely to follow. Then, of course, we’ll go into Valentine’s Day and see the rebound stay alive. That’s likely to keep gross margins healthy as well, despite the fact that the consumer will undoubtedly be a little weaker than expected. We already saw as much with the results from Dollar General (NYSE:DG) posted earlier as well. The addition of other revenue from Shari’s Berries and Harry and David divisions will likely help here to boot, especially with the holidays coming up and food gifts often proving welcome.
Hedge funds, however, aren’t so hopeful. In fact, in the last quarter, they reduced their holdings in 1-800 Flowers stock by 66,300 shares. That was enough to tip the hedge fund confidence signal to Negative. This isn’t part of a larger pattern, though, as hedge funds have been fine-tuning the amount of 1-800 Flowers stock they hold for the last four quarters now.