Five Below soars in Q2, opening 125 stores and expanding toy selection
Teen and tween discount retailer Five Below is on a roll, from store expansion to appointing its first-ever CIO.
The company raised its full-year outlook amid second quarter results that easily topped the Street and reaffirmed its 2,500-plus store potential. Five Below, which recently opened its 700th store (and 25th store in California), is on track to open 125 stores this year.
“The biggest driver of our growth continues to be our new stores and the performance by our new stores remains strong,” CEO Joel Anderson said on the chain’s quarterly earnings call. “Our real estate team continues to execute at a very high level finding great locations in vibrant shopping centers with solid traffic while our construction, design and store opening teams do a terrific job preparing the stores to open.”
Five Below is joining the ranks of retailers looking to fill the void left by the exit of Toys “R” Us. The chain will be rolling out an expanded toy selection in its stores this month.
“While Toys “R” Us is no longer in the market, families are searching for new toy destinations and we are excited to serve that need,” Anderson said on the call.
In other news, Anderson announced that Rob Feuerman has joined Five Below in the newly created position of CEO. From 2018 to 2018, he served in various senior roles at Gap Inc., including VP IT. He also is the founder of Kid Chow, the San Francisco area’s first online school lunch company preparing and serving organic meals to 60 K-8 schools.
For the second quarter, Five Below earned $25.1 million, or 45 cents a share, in the quarter, compared with $16.8 million, or 30 cents a share, in the year-ago period. Analysts has expected earnings of 38 cents a share.
Revenue rose 23% to $347.7 million, topping the $335 million analysts expected. Same-store sales rose 2.7%, better than the expected 0.1%.
“We saw broad-based strength across our worlds as our high quality, trend right products at incredible values continued to resonate with customers,” stated Anderson.
For fiscal 2018, the company expects revenue between $1.528 billion and $1.540 billion, based on opening about 125 new stores and an expected 2.5% to 3% increase in comparable sales.
Per-share net income is expected to be between $2.51 and $2.57.
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