Why 1-800-Flowers.com Stock Rallied Today
Key Points
Cost cuts are boosting 1-800-Flowers.com's margins.
CEO Adolfo Villagomez sees a path to "sustainable, profitable growth."
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Shares of 1-800-Flowers.com (NASDAQ: FLWS) popped on Thursday after the floral arrangement and gift basket retailer delivered high-than-expected profits.
As of 1:35 p.m. EST, 1-800-Flowers.com's stock price was up more than 18%.
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A focus on efficiency
1-800-Flowers.com's revenue fell 9.5% year over year to $702.2 million in its fiscal 2026 second quarter, which ended on Dec. 28. The flower arrangement and gourmet foods company is paring back its marketing spend as it prioritizes profitability.
"We believe this approach is important to building a more sustainable and disciplined demand generation model," CEO Adolfo Villagomez said during a conference call with analysts.
Improving profitability
Management also shifted the company from an individual brand-based structure to a function-based operating model. This enabled 1-800-Flowers.com to further cut costs by reducing its workforce. Operating expenses, in turn, declined $23.4 million to $221.1 million.
"While the topline impact of our initiatives will take time as we address structural challenges within the business, we made solid progress in the second quarter on our cost-optimization and organizational-streamlining efforts, including meaningful steps toward transforming our structure into a more functional and efficient organization," Villagomez said.
All told, 1-800-Flowers.com's adjusted net income increased 11% to $76.7 million, or $1.20 per share. That topped Wall Street's estimates, which had called for adjusted per-share profits of $0.86.
"These actions are strengthening our operating foundation and better positioning the company to achieve sustainable, profitable growth," Villagomez said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends 1-800-Flowers.com. The Motley Fool has a disclosure policy.
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