Five Below beats Street, provides strong Q2 guidance

Five Below was strong out of the gate in the first quarter, due in part to successful sales across new stores.

For the quarter ended May 5, Five Below’s net income was $21.8 million, or 39 cents per share, compared with $8.4 million, or 15 cents per share, in the year-earlier period. Revenue jumped to $296.3 million, up from $232.9 million in the year-ago period.

This beat analysts’ expectations of 32 cents a share on revenue of $290.9 million.

Net sales increased by 27.2% to $296.3 million from $232.9 million in the first quarter of fiscal 2017. Comparable sales increased by 3.2%.

The company opened 33 new stores, and ended the quarter with 658 stores in 32 states. This represents an increase in stores of 19.0% from the end of the first quarter of fiscal 2017.

“We are very pleased with the strong start to fiscal 2018, as we delivered both sales and earnings above our guidance ranges for the first quarter,” said Joel Anderson, Five Below’s president and CEO. “Continued outperformance from our new stores and healthy comparable sales were accompanied by strong gross margin performance, SG&A leverage and tax rate favorability, resulting in EPS that more than doubled versus last year."

Looking ahead to the second quarter, net sales are expected to be in the range of $332 million to $335 million, based on opening approximately 33 new stores, and assuming approximate flat comparable sales. Net income is expected to be between $20.0 million and $21.2 million, with a diluted income per common share range of 36 cents to 38 cents.