What Happened?
Shares of e-commerce florist and gift retailer 1-800-FLOWERS (NASDAQ: FLWS) jumped 14.6% in the afternoon session after its inclusion in a broader "meme stock" rally targeting heavily shorted companies.
The online retailer became a target for retail traders due to its high short interest, which stood at a reported 71.66%. This situation created the potential for a "short squeeze," a technical event where a rising stock price forced traders who bet against the stock (short sellers) to buy shares to cover their positions, pushing the price even higher. Adding to the momentum, the stock experienced a surge in speculative options activity, with traders making bullish bets on the company's short-term price movement. The rally occurred in the absence of any new company-specific financial news or press releases. The move also came amid a positive backdrop for the consumer retail sector, which saw broad gains after upbeat retail sales data eased economic worries.
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What Is The Market Telling Us
1-800-FLOWERS’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. But moves this big are rare even for 1-800-FLOWERS and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 17.3% on the news that the company reported weak fourth quarter results, with its revenue and EPS fallin below analysts' expectations.
Adding to the bad news, the company's full-year EBITDA guidance missed Wall Street's estimates significantly. Management expressed displeasure at the results, which were marred by "a softer than anticipated and highly promotional consumer environment, along with a pullback in corporate gifting orders." Overall, this was a weaker quarter.
1-800-FLOWERS is down 7.9% since the beginning of the year, and at $7.19 per share, it is trading 30.6% below its 52-week high of $10.36 from July 2024. Investors who bought $1,000 worth of 1-800-FLOWERS’s shares 5 years ago would now be looking at an investment worth $284.19.
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