FLWS

Despite Stock Slide, Fund 1 Pours $25 Million Into Struggling 1-800-Flowers.Com($FLWS) in Aggressive Buying Spree

04/02/2025 21:07

Amid broader retail industry challenges, $FLWS (1-800-Flowers.Com Inc) has experienced significant volatility over the past six months, climbing to around $11.00 in mid-July 2024 before declining approximately 45% to current levels near $6.00. Despite this substantial price drop, major shareholder Fund 1 Investments, LLC has been aggressively purchasing shares since early 2025, capturing the attention of market watchers. 1-800-Flowers.Com operates in the online floral and gift delivery space, with three primary business segments: Consumer Floral & Gifts, Gourmet Foods & Gift Baskets, and BloomNet. The company's business model is highly seasonal, with revenue concentrated around key holidays like Valentine's Day and Mother's Day. Particularly noteworthy is Fund 1 Investments' aggressive share accumulation pattern. After selling 40,000 shares at $7.80 in early November 2024, this major shareholder embarked on a substantial buying spree from January 10, 2025, through April 1, 2025. Key purchase blocks include 368,000 shares (approximately $2.72 million) between January 10-15, and an additional 1,205,105 shares (approximately $9.45 million) between January 28 and February 4. These purchases continued through February, March, and early April, totaling approximately 3.5 million shares with an investment of about $25 million. In contrast, the company's CIO, Arnold P Leap, sold 3,000 shares at $7.37 on November 19, 2024. This divergence between executive selling and major shareholder accumulation reflects differing perspectives on the company's outlook. 1-800-Flowers.Com's financial performance has been challenging recently. Results announced in late August 2024 showed an adjusted quarterly loss of 31 cents per share for the quarter ending June 30, 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 quarter ending December 31, reported on January 30, 2025, also showed deterioration, with adjusted earnings of $1.00 per share, down from $1.27 year-over-year, and revenue declining 5.7% to $775.49 million. The company currently has a market capitalization of approximately $395 million, relatively low compared to its annual revenue of $1.76 billion. With earnings per share (EPS) at -$0.12 and a net profit margin of -0.43%, profitability remains challenged. However, the company maintains a relatively healthy gross margin of 40.11% and a debt-to-equity ratio of 31.8%, suggesting some underlying financial stability. Broader retail industry headwinds are also impacting $FLWS's performance. Reduced consumer spending and a softening labor market led to fewer seasonal hires for the 2024 holiday season, sending negative signals about retail sales projections. Competition in the traditional flower delivery and gift market has intensified with the expansion of online shopping options. Despite these challenges, Fund 1 Investments' persistent buying activity is remarkable. The fund began purchasing when shares were trading in the $8-9 range and has continued through the decline to under $6. Particularly notable is their continued accumulation during the sharp price drop from late February through early March. This investment pattern suggests Fund 1 Investments has a positive assessment of 1-800-Flowers.Com's long-term value and recovery potential. With shares trading near 52-week lows, these significant purchases could indicate a belief that the company's intrinsic value exceeds its current market price. Looking ahead, 1-800-Flowers.Com's performance will likely depend heavily on upcoming seasonal revenue drivers, including Mother's Day and the summer wedding season. The company is focusing on improving profitability and inventory management, which should be reflected in upcoming quarterly results. Efforts to enhance online platforms and mobile ordering experiences will also be key indicators of potential digital sales growth. Investors should carefully evaluate whether Fund 1 Investments' continued buying represents a simple average-down strategy or a conviction in the company's fundamental value as a long-term investment. The current average analyst price target of $7.50 suggests approximately 28% upside potential from current levels. In conclusion, despite short-term financial difficulties, 1-800-Flowers.Com may see performance improvements during upcoming key seasons due to the nature of its business. Fund 1 Investments' substantial share accumulation appears to be betting on this long-term value, potentially signaling an opportunity for investors willing to accept risk at current depressed price levels.

You can receive notifications when news is published.