Shares of 1-800-Flowers continue to slump, set new 52-week low after 4Q results

1-800-Flowers shares set new low on 4Q results

NEW YORK — Shares of 1-800-Flowers.com continued to decline Monday, days after the online flower company said revenue fell in its fiscal fourth quarter as shoppers avoided buying flowers and other discretionary items in the weak economy.

THE SPARK: The company’s shares have been falling since it announced its fourth quarter results last Thursday. Shares opened trading that day at $2.25 and have fallen nearly 25 percent since then. The company’s loss narrowed but results missed estimates on weaker sales.

THE BIG PICTURE: The company’s main product — flowers — are discretionary, so seeing how people shop at the online retailer shows how they feel about the economy. They are still uncertain about their economic situations, so people are limiting their purchases. For the fiscal fourth quarter, revenue for the consumer floral business was $117.3 million, down 5.5 percent from $124.1 million in the year-ago period.

THE ANALYSIS: The company’s “largest obstacle” remains the consumer environment, Eric Beder, an analyst with Brean Murray, Carret & Co. said in a note to clients Friday. He expects consumer spending to be tight for the rest of the year, so the company’s results will be pressured.

Beder, who rates the shares a “Hold” and has a $2 price target, cut his estimates “significantly” though he added that if shoppers resume their old spending habits, the estimates could be conservative. He now expects a loss of 7 cents in fiscal 2011, compared to earnings of 15 cents. Analysts expect earnings per share of 4 cents next year, according to Thomson Reuters.

The company, based in Carle Place, N.Y., is disappointed to see its share price fall so much, and views the decline as an overreaction in the market, said Joe Pititto, vice president of investor relations.

He noted that trading volume was up — for example more than nine times normal volume on Monday — which also deepens the share loss.

SHARE ACTION: Shares set a new 52-week low of $1.65 in trading Monday, falling 26 cents, or 13.6 percent, in heavy volume. Shares have traded as high as $4.88 in the past 52 weeks.