Earnings
Five Below reported third-quarter adjusted earnings per share (EPS) of 43 cents on revenue of $607.6 million. Both numbers topped consensus analyst estimates of 29 cents and $563.9 million. Revenue was up 27.3 percent from a year ago.Operating income was up 75 percent to $42 million in the third quarter. The company’s store count was also up 15.2 percent from a year ago to 1,173total stores in 40 different U.S. states.
Voices From the Street
Wells Fargo analyst Edward Kelly said Five Below’s impressive third-quarter numbers are a testament to its consistent execution.“Q4 guidance was a touch softer than one would expect after this performance, but the company has its holiday inventory and there looks to be plenty of potential for upside,” Kelly wrote in a note.
KeyBanc analyst Bradley Thomas said Five Below’s long-term outlook remains compelling.
“While freight related pressure is expected to increase in the quarters ahead, we believe FIVE is doing an admirable job at mitigating these costs, benefiting from increased efficiency and growing scale,” Thomas wrote.
Telsey Advisory Group analyst Joseph Feldman said Five Below has multiple growth drivers, including adding new stores, rolling out Five Beyond and expanding into new categories, such as digital and gaming.
Ratings and Price Targets
- Wells Fargo has an Overweight rating and $240 target.
- KeyBanc has a Sector Weight rating.
- Telsey Advisory Group has an Outperform rating and $235 target.
