NEW YORK (
) -- Shares of
wilted Monday on heavy volume as the company continued to see fallout from its latest financial report and its decision to limit guidance because of the uncertain outlook for the consumer.
The stock closed down 11% at $1.70. Volume of a little more than 2 million was roughly 16 times the issue's trailing three-month daily average of 125,000. The session-low of $1.65 was a new 52-week low, crashing through a floor of $1.78 set back in February. Year-to-date, the stock is now down more than 35%.
Based on last Wednesday's close at $2.42, the shares had already come down 34% from a near-term high of $3.66 in mid-April headed into the fourth-quarter report on Thursday, and they kept falling after the company posted an adjusted loss of $1.2 million, or 2 cents a share, on revenue of $165.4 million for the three months ended June 30.
That performance missed Wall Street's average analysts' estimates for earnings of a penny per share on revenue of $173.1 million for the June quarter.
Joseph Pititto, vice president of investor relations for 1-800-Flowers.com, told
the company was "very surprised" by the severity of the sell-off since the fourth-quarter report, calling it an "over-reaction."
"We think there is significantly more value than what's being reflected in the stock price right now," Pititto said, specifically citing the company's "very strong" balance sheet after it paid down $70 million in long-term debt over the past 24 months. Total long-term debt, including current maturities to be paid over the next year, now stands at around $60 million, he said.
Pititto acknowledged the decision to stop providing detailed company-specific guidance was unlikely to sit well with Wall Street and said there have been "quite a few block trades" on Monday -- including the sale of around 900,000 shares at $1.70 per share just as the closing bell sounded -- but he explained the company had determined the uncertain consumer outlook made it too difficult to accurately project top-line growth at this time.
Instead of supplying a specific outlook for earnings, revenue, EBITDA and free cash flow from now on, 1-800-Flowers.com gave more of a macro guidance on business conditions for the current fiscal year last week.
"In terms of its outlook for fiscal 2011, the
Company does not anticipate significant improvements in consumer demand for discretionary purchases and therefore expects continued challenges to top line growth," the statement read.
Revenue totaled around $668 million for fiscal 2010 ended in June, and Wall Street's current consensus estimate is for a decline of around 6% to $630 million in fiscal 2011.
Overall, the company saw revenue from its Consumer Floral business fall 7% to $366.5 million in fiscal 2010 from $394.8 million in the year prior, and the latest economic news, namely the unexpected rise in weekly initial jobless claims last week, doesn't bode well for turning that trend around. In addition, the company has faced
in recent years from names like Edible Arrangements, ProFlowers and Teleflora.
With top line growth expected to be difficult to find, 1-800-Flowers.com plans to work on improving gross margins and operating efficiencies, while also continuing to build out its gift baskets business and unveiling a new franchising program for the Fannie May brand retail candy stores.
The company currently has a small but skeptical following on Wall Street. Of the four analysts that cover the stock, two are at hold, one is at underperform and one is at strong buy.
Arguably the most notable aspect of Monday's trading action was the volume as trading in the shares hasn't topped 1 million in a single session since February 2007. The 900,000-share block trade noted by Pititto may be indicative of a move by an institutional investor.
Some of the bigger holders of 1-800-Flowers.com stock among investment managers, according to
Tocqueville Asset Management
with 2.63 million shares;
with 2.14 million shares; and
Royce & Associates
with 2.07 million shares.
Written by Michael Baron in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.