FLWS

1-800-FLOWERS.COM($FLWS) Major Shareholder Pours $30 Million Into Stock During Three-Month Buying Spree Amid Share Plunge

03/25/2025 21:25

Shares of online floral and gift retailer 1-800-FLOWERS.COM ($FLWS) have been on a steep decline over the past six months, yet major shareholder Fund 1 Investments, LLC has been aggressively buying up shares, drawing significant investor attention. $FLWS stock has fallen approximately 19% over the last six months, with a particularly sharp drop following the company's earnings release in late August 2024, pushing the price down to the $7 range. Currently trading at around $5.80, the stock has plummeted nearly 49% from its 52-week high of $11.42, with another substantial decline occurring from late February through early March 2025. Amid this downward trajectory, the most notable activity has been Fund 1 Investments, LLC's consistent stock purchases. According to SEC Form 4 filings, this major shareholder has been buying $FLWS shares almost daily from January 10, 2025, through March 25, 2025. In total, the fund has invested over $30 million to acquire approximately 3.5 million shares. Particularly noteworthy was Fund 1 Investments' purchase of about 683,500 shares on February 21 alone, representing an investment of approximately $5.5 million. On February 3 and 4, the fund acquired around 720,000 shares, injecting over $5.7 million. The average purchase prices were primarily in the $7-$8 range, with a pattern of increasing purchase volumes as the share price declined. This buying spree stands in stark contrast to November 4, 2024, when the same shareholder sold 40,000 shares. Additionally, CIO Leap Arnold P sold 3,000 shares that same month. However, Fund 1 Investments' purchasing behavior since January 2025 represents a dramatic shift in investment strategy. These massive purchases have occurred against a backdrop of consecutive disappointing earnings reports. In the June quarter results announced on August 29, 2024, the adjusted loss was 31 cents per share, worse than the 28-cent loss in the same period the previous year. Revenue declined 9.5% to $360.91 million, falling short of analyst expectations of $374.38 million. The September quarter results released on November 1, 2024, showed an adjusted loss of 53 cents per share, wider than the 48-cent loss a year earlier. Revenue dropped 10% to $242.09 million, below the expected $250.74 million. Most recently, the December quarter (holiday shopping season) results announced on January 30, 2025, reported adjusted earnings of $1.00 per share, down from $1.27 in the same period the previous year. Revenue decreased by 5.7% to $775.49 million, missing the forecast of $801.64 million. 1-800-FLOWERS.COM is an e-commerce company selling flowers, fruit baskets, and gifts online, with a seasonal business model that sees demand concentrated around specific holidays like Valentine's Day, Mother's Day, and Christmas. The company also owns brands like Harry & David and Cheryl's Cookies. Financially, the company has recently recorded TTM revenue of $1.76 billion with a net loss of $7.61 million, representing a slight deficit. However, it maintains a healthy gross margin of 40.11% and a relatively sound financial structure with a debt-to-equity ratio of 31.8%. Analysts currently maintain an average "buy" rating on $FLWS, with a median target price of $11.00, suggesting approximately 90% upside potential from the current price. This assessment aligns with Fund 1 Investments' substantial purchasing activity. Industry experts cite reduced consumer spending, inflationary cost pressures, and intensified e-commerce competition as challenges facing $FLWS. However, the company's brand recognition, potential for demand recovery during seasonal events, and efforts to optimize logistics and costs are viewed as positive factors. The major shareholder's extensive buying likely reflects a judgment that the company is undervalued in the current market and confidence in its long-term growth potential. The fact that these large-scale purchases occurred while the stock trades near its 52-week low may be interpreted as a positive signal by investors. The upcoming spring season, including Mother's Day and graduation season, is one of $FLWS's peak periods. How well the company's sales and performance can meet market expectations during this time will likely be a significant catalyst for future stock movements. Nevertheless, the overall retail sales slowdown and intensified e-commerce competition remain risk factors for $FLWS, potentially contributing to increased stock volatility in the short term, along with seasonal fluctuations. Despite these concerns, the major shareholder's persistent buying presents a noteworthy signal for long-term investors.

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