FLWS

Despite 50% Stock Plunge, Major Shareholder Goes 'All-In' with $25 Million - Insider Activity Surges at 1-800-Flowers.Com($FLWS)

03/20/2025 21:44

A major shareholder of 1-800-Flowers.Com Inc ($FLWS) has been aggressively buying shares over the past two months despite the stock's declining performance, drawing significant attention from investors. 1-800-Flowers.Com is a leading online gift and floral retailer in the United States, focusing on flower arrangements during Valentine's Day and Mother's Day and gift baskets during other seasons. The company's stock has been under considerable pressure recently, falling from the mid-$9 range in August 2024 to the $5-6 range currently, with particularly sharp declines in recent weeks. Amid this bearish trend, the actions of major shareholder Fund 1 Investments, LLC stand out as particularly noteworthy. According to SEC filings, this investment firm has been systematically purchasing $FLWS shares from January 10, 2025, through March 20, 2025. The total purchase volume amounts to approximately 3.3 million shares, representing an investment exceeding $25 million. What's especially interesting is the pattern of these purchases. Fund 1 Investments has increased its buying volume as the share price declined. In mid-January, when the stock was trading in the $7-8 range, the fund was purchasing an average of 50,000-100,000 shares per day. However, as the price dropped to the $6 range and then the $5 range in March, the fund became even more aggressive in its acquisitions. This suggests a strong conviction that the current share price significantly undervalues the company's true worth. These substantial purchases are particularly meaningful given the company's recent underwhelming financial performance. $FLWS has reported disappointing results for consecutive quarters. For the quarter ending December 2024, announced on January 30, 2025, the company reported earnings of $1.00 per share, down from $1.27 in the same period the previous year, with revenue declining 5.7% to $775.49 million. In the September 2024 quarter, the company posted a loss of 53 cents per share with revenue down 10%. For the 2024 fiscal year, $FLWS recorded $1.83 billion in revenue and $11.6 million in adjusted net income, but is currently operating at a net loss of $7.61 million on a trailing twelve-month basis. While the company maintains a relatively low debt-to-equity ratio of 31.8%, restoring profitability remains an urgent priority. Industry experts point to several challenges facing 1-800-Flowers.Com, including reduced consumer spending due to inflation, intensified competition in the online gift market, and rising logistics costs. Additionally, the strengthening of gift categories by major e-commerce players like Amazon ($AMZN) adds competitive pressure. Nevertheless, Fund 1 Investments' substantial share purchases appear to be a bet on $FLWS's long-term recovery potential. Interestingly, this same firm had previously sold 40,000 shares on November 4, 2024, but has consistently maintained a buying position since then. In contrast, during the same period, CIO Arnold P Leap sold 3,000 shares (approximately $22,110) on November 19, 2024. 1-800-Flowers.Com's business is highly seasonal, with revenue concentrated around Valentine's Day, Mother's Day, and the year-end holiday season. Accordingly, seasonal worker hiring ahead of holiday periods represents a significant operational component for the company. Analysts maintain an average "buy" rating on $FLWS with a 12-month price target of $11.00, suggesting substantial upside potential from current levels. However, consecutive disappointing earnings reports create uncertainty about when this target might be achieved. Key factors to watch moving forward include potential earnings recovery in 2025 and whether the major shareholder continues its purchasing strategy. The Mother's Day season performance in May 2025 is expected to be a critical inflection point. Additionally, strategies to enhance competitiveness in the online gift market and cost efficiency efforts warrant close attention. The case of $FLWS offers an intriguing example of what it means when a major shareholder bets on long-term value despite share price declines. While shareholder purchases alone may not drive immediate stock rebounds, combined with a performance turnaround, they could represent a meaningful investment signal.

You can receive notifications when news is published.