Five Below, Inc. Reports Q2 Net Sales, Comp & Earnings Exceeded Outlook & Raises Full Year Fiscal 2017 Guidance

Written by Lorimer Wilson

Five Below, Inc. (NASDAQ: FIVE) today announced Q2 net sales which exceeded the high end of their sales, comp and earnings outlook and raised full year fiscal 2017 guidance.

About Five Below:

Five Below is a specialty value retailer targeting teen and pre-teen customers and offers a broad range of trend-right, high-quality products in a fun and differentiated store environment, all priced at $5 and below. Five Below was founded in 2002 and is headquartered in Philadelphia, Pennsylvania, with
approximately 600 stores in 32 states.

For the thirteen weeks ended July 29, 2017:

• net sales: UP 28.7% to $283.3 million
• comparable sales: UP 9.3%
• operating income: UP 67.4% to $26.3 million
• net income: UP 71.4% to $16.8 million
• diluted income per common share: UP 66.7% to $0.30
• store count: UP 18.9% (31 new stores) to 584 stores in 32 states.

Third Quarter and Fiscal 2017 Outlook:

The company expects 3Q:

• net sales to be in the range of $241 million to $246 million based on opening approximately 35 new stores and assuming a 3% to 5% increase in comparable sales.
• net income to be in the range of $6.2 million to $7.4 million, with a diluted income per common share range of $0.11 to $0.13 on approximately 55.6 million estimated diluted weighted average shares outstanding.

Fiscal 2017 results will contain an additional, non-comparable week, or the "53rd week" in the fourth quarter. For the full year of fiscal 2017 the company expects: 

• net sales to be in the range of $1.236 billion to $1.248 billion based on opening approximately 100 new stores and assuming a 3.5% to 4.5%increase in comparable sales.
• net income to be in the range of $90.3 million to $92.6 million, with a diluted income per common share of $1.62 to $1.66 on approximately 55.7 million estimated diluted weighted average shares outstanding.
• The 53rd week is expected to contribute approximately $15 million in sales and approximately $0.02 in diluted income per common share.

Joel Anderson, CEO, stated:

“Our strong second quarter results demonstrate the amazing appeal of the Five Below brand.

>We exceeded the high end of our sales, comp and earnings outlook.

>Sales growth of 29% was led by strong new store performance.

>Our transaction-driven comp of 9.3% was the highest since our IPO...

>Our top line results were accompanied by strong margin expansion, resulting in over 70% net income growth.

We are entering the second half of the year with momentum and believe we are well-positioned to deliver on our financial goals. We are focused on the all-important fourth quarter and executing our strategic initiatives, which include:

>continuing to provide a differentiated in-store experience,

>offering amazing, trend-right, quality merchandise at value prices,

>introducing new customers to our brand

>and increasing awareness while building out our infrastructure to support our 2,000+ store opportunity.”