By Denny Jacob
Shares of gifts provider 1-800-Flowers.com rose 14% to $7.97 on Thursday as gross profit margins continued to improve in the latest quarter and executives called for further margin growth.
The stock, which is down 17% on the year, is on pace for its largest one-day percentage increase since Feb. 2.
The Jericho, N.Y.-based company increased its gross profit margin 340 basis points to 37.1%, up from 33.7% a year earlier. Gross margins have improved consecutively since the second quarter, and 1-800-Flowers.com said it expects its gross margin to continue its return to historical levels in the low 40% range.
Executives attributed the improvement to ocean freight rates approaching pre-pandemic levels and commodity costs coming off their highs, along with the company’s efforts to increase efficiencies, including automation investments.
“While it is very difficult to predict precisely when we will see more favorable environment for consumer discretionary spend, we believe that with regard to revenue growth and margin recovery, it’s a question of when, not if,” Chief Executive Jim McCann said.
Other fourth-quarter results showed the company reported an 18% decrease in revenue as consumers continued to be judicious with their spending and a slightly wider loss.
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