1-800 Flowers.Com Inc. (NASDAQ: FLWS)

1-800 Flowers.Com Inc. (NASDAQ: FLWS)

1-800 Flowers.Com Inc. (NASDAQ: FLWS)

The floral industry is a cyclical business and there are a few times each year that it relies upon to carry it through the rest of the year. Those times revolve around major holidays with Valentine’s Day coming out on top closely followed by Mother’s Day. Although flowers are a thoughtful gesture  year round, this is an optimal time to get in on a stock that historically pops with Valentine’s Day just around the corner and1-800 Flowers.Com Inc. (NASDAQ: FLWS) is a viable option.

The company does more than sell flowers. It also sells gift baskets, plush animals, plants, gourmet foods of all types and items such as balloons and candles. FLWS owns a boat-load of online retail gift venues including Cheryl & Co., Fannie May Confections Inc., The WineTasting Network, The Popcorn Factory and Bloomnet, which is a floral wire service that delivers flowers and gifts globally. In 2008 the company stepped into the wholesale arena when it acquired plant and floral container wholesaler, Napco Marketing Corporation. In 2007 the company entered into a strategic partnership with Martha Stewart Living Omnimedia Inc. (NYSE: MSO) to create a line of floral products inspired by Martha Stewart. FLWS, founded in 1996 by Jim McCann, was one of the first retailers to partner with CompuServe and AOL (NYSE: AOL) in 1992 and 1994 respectively. The company jumped into consumers living rooms in the early 1990’s when AT&T (NYSE: T) created an advertising campaign that featured FLWS. It aired continually during the 1992 Summer Olympics and since then FLWS has never looked back.

The company has a market cap of $243.99 million and is currently trading at $3.76. Three of five analysts offering one year price forecasts for 1-800-Flowers have a median target of $5.00, with a high estimate of $5.00 and a low estimate of $5.00. The mean estimate represents a +34.05 percent increase from the last listing price of 3.76. The current consensus among 5 polled investment analysts is to buy the stock and this has held steady all month which validates our opinion that this is an optimal time to purchase shares. The company is due to release its quarterly earnings report this week and it may well be worth a perusal in order to see if this play might be an option for you. 

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  • mrgambale@gmail.com

    FLWS is a good company, and will always have a customer base due to its popularity. This morning, the company missed on revenue but came in-line with EPS estimates. It also intends to buy back shares during the second half of the year.

  • mrego123

    I like FLWS as a Valentines’ Day pick, as you said, but not much after that. The company does not have much long term debt but in the short term, FLWS has a debt to equity ratio of 0.36 with only .09 cash per share. This makes me nervous because the lack of cash will be hard to pay off debt obligations….not a good situation.

    • DanSlone

      I see your point, but I tend to agree with Lillie. FLWS is in the sort of business that is relatively predictable, so the likelihood of the sort of shock that would abruptly make debt maintenance untenable is low. At this price I would hang onto the stock at least through Mother’s Day and the stock buyback.

  • Lillie

    Always a concern in the floral business but… I think this company has enough diversification in retail to sustain it and merits a look as a long-term play. I really don’t see anything worrisome here.