Last update on 2024-06-07

1-800-Flowers.com (FLWS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Detailed Piotroski F-Score analysis of 1-800-Flowers.com (FLWS) for 2023, evaluating profitability, liquidity, and efficiency for informed investment decisions.

Short Analysis - Piotroski Score: 5

We're running 1-800-Flowers.com (FLWS) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

1-800-Flowers.com (FLWS) was analyzed using the Piotroski F-Score, which is based on 9 criteria related to profitability, liquidity, and operating efficiency. The company scored 5 out of 9 points. Here are some details: 1. Profitability: The company failed in net income since it was negative in 2023 (-$44,702,000), but had positive cash flow from operations ($115,351,000). Return on Assets (ROA) fell from +0.0273 in 2022 to -0.0417 in 2023. However, operating cash flow was higher than net income, indicating strong cash flow generation despite losses. 2. Liquidity: The company's leverage increased from 0.2431 to 0.2889, which is concerning. However, the current ratio improved from 1.3107 to 1.6941. Additionally, the number of shares outstanding slightly decreased, showing reduced dilution. 3. Operating Efficiency: Gross Margin increased from 0.3722 to 0.3754, suggesting minor improvement in profitability and cost management. Unfortunately, the asset turnover ratio dropped from 2.0334 to 1.8803, indicating less efficiency in using assets to generate sales.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score analysis, 1-800-Flowers.com (FLWS) is showing mixed results. The positive cash flow and improved gross margin are good signs, but the negative net income, declining ROA, increased leverage, and poor asset turnover ratio are concerning. If you are looking for an investment, you might want to be cautious and maybe hold off until the company shows stronger signs of improvement in profitability and efficiency.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of 1-800-Flowers.com (FLWS)

Company has a positive net income?

The Net Income criterion is essential, as it indicates a company's profitability. Positive net income is a direct reflection of a company's ability to generate profit, which benefits shareholders.

The net income for 1-800-Flowers.com (FLWS) in 2023 is -$44,702,000, which is negative. Therefore, it does not meet the criterion and earns 0 points. Historically, while the company has had fluctuating profits, this recent dip into negative territory may raise concerns among investors about the company’s profitability sustainability.

Company has a positive cash flow?

Cash Flow from Operations (CFO) evaluates the cash generated from the core operational activities. Positive CFO indicates effective cash management and robust core operations.

In 2023, 1-800-Flowers.com reported a positive CFO of $115,351,000. This positive cash inflow from operations is a healthy sign, showing that the company has been able to generate cash from its core business activities. Looking at the historical trend: - The company had a high of $173,290,000 in 2021 and a low of $5,189,000 in 2022. - Consistently maintaining positive CFOs demonstrates a well-managed operational activity except for a dip in 2022. - From 2003 to 2023, it mostly stayed positive, signaling overall operational efficiency. Given the positive CFO reported in 2023, 1 point is awarded.

Return on Assets (ROA) are growing?

Change in ROA (Return on Assets) measures the company's ability to turn assets into profits. It is calculated by dividing the net income by total assets, and a higher ROA indicates more efficient use of assets.

For 1-800-Flowers.com (FLWS), the ROA decreased significantly from 0.0273 in 2022 to -0.0417 in 2023. This represents a negative shift in the company's ability to generate returns from its assets, going from positive to negative ROA within a year—a troubling sign for investors. This contrasts sharply with the industry median ROA, which consistently maintained a positive trend over the past two decades, signaling industry-wide efficiency and profitability that FLWS failed to match. Despite 1-800-Flowers.com's previous fluctuations in operating cash flow, this recent decline further extends their deviation from industry norms. Therefore, the Piotroski score for this criterion is 0.

Operating Cashflow are higher than Netincome?

We assess whether operating cash flow (OCF) exceeds net income, as it's crucial for evaluating the company's liquidity and operational efficiency.

In 2023, 1-800-Flowers.com reported an operating cash flow of $115,351,000, significantly surpassing the net income of -$44,702,000. This discrepancy highlights strong cash flow generation despite net losses, signaling effective cash management and operational resilience. Historically, the company has shown varied performance in aligning OCF with net income, with 2023 reflecting a robust liquidity position. Thus, the criterion scores 1 point, marking it as a positive trend.

Liquidity of 1-800-Flowers.com (FLWS)

Leverage is declining?

Change in leverage assesses the degree to which a company is utilizing borrowed money. Lower leverage often indicates lower financial risk.

For 1-800-Flowers.com, the leverage increased from 0.2431 in 2022 to 0.2889 in 2023, indicating a rise in the company's debt relative to its equity. This trend is concerning, as higher leverage translates into increased financial risk. Over the past 20 years, the company's leverage has fluctuated significantly, with 2023 showing the highest level since 2009 when it hit 0.2465. This pattern of increasing leverage in recent years suggests that 1-800-Flowers.com may be depending more on borrowing, which could pose financial stability concerns if not managed prudently.

Current Ratio is growing?

This criterion assesses the company's ability to cover its short-term liabilities with short-term assets, indicating liquidity.

In 2023, 1-800-Flowers.com (FLWS) boasts a Current Ratio of 1.6941, which is an improvement from the 1.3107 observed in 2022. A higher current ratio often suggests a stronger liquidity position, enhancing the company's ability to meet short-term obligations. Historically, FLWS has hovered around a lower boundary compared to the industry median until 2017. Notably, the increase from 1.3107 to 1.6941 translates to a point increment in the Piotroski score, signifying positive liquidity management. This upward shift could indicate better management of current assets and liabilities.

Number of shares not diluted?

Changes in outstanding shares can indicate how much shareholder dilution or concentration might be occurring.

In 2022, 1-800-Flowers.com had 64,977,000 outstanding shares, whereas in 2023, this figure dropped to 64,688,000. This decrease of 289,000 shares signifies a contraction indicating the company might be buying back shares. Over the last 20 years, the outstanding shares show a fluctuating trend but a general decrease reflecting shareholder value creation efforts or dilution control.

Operating of 1-800-Flowers.com (FLWS)

Cross Margin is growing?

Gross Margin indicates the proportion of revenue that exceeds the cost of goods sold. It is a critical metric to measure company profitability and efficiency.

1-800-Flowers.com (FLWS) achieved a Gross Margin of 0.3754 in 2023, up slightly from 0.3722 in 2022. This increase of 0.32 percentage points suggests a minor improvement in the company’s profitability and cost-management. Over the last 20 years, FLWS's gross margin peaked at 0.4411 in 2016 but fell to its lowest of 0.3722 in 2022. Comparatively, FLWS consistently performed above the industry median, with the current industry median being 0.3785 in 2023. This uptick is a positive signal, giving FLWS a 1 point in this Piotroski criterion.

Asset Turnover Ratio is growing?

The Asset Turnover Ratio gauges how efficiently a company uses its assets to generate sales and is crucial for operational efficiency assessment.

In 2023, 1-800-Flowers.com (FLWS) shows an asset turnover ratio of 1.8803, a decline from the 2022 ratio of 2.0334. This indicates reduced efficiency in using assets to generate sales. Historically, FLWS has seen variations in this ratio, peaking at 2.9223 in 2014 but trending downward over recent years. The decrease from 2022 to 2023 gives 0 points in Piotroski Score, signaling operational efficiency deterioration.