Five Below, Inc. Announces Holiday Sales Results for Quarter-To-Date Through January 6, 2024
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Insights
Five Below's recent sales performance reflects a robust holiday season, with a significant 15.6% increase in net sales and a 3.6% rise in comparable sales. This outcome suggests that the company's value-oriented product mix and strategic store conversions are resonating with consumers. The ability to hit the upper half of their sales guidance indicates a strong alignment between management's expectations and market realities, which is often a positive sign for investors looking for stability and predictability in retail operations.
However, it's crucial to consider the broader retail landscape when evaluating these results. Comparable sales growth is a critical metric, as it indicates organic growth from existing stores. Five Below's 3.6% growth in this area is modest and may reflect broader consumer spending trends or increased competition. Investors should monitor whether this growth rate can be sustained or improved upon in future quarters, especially as the company continues its aggressive expansion with a record number of new store openings.
The reaffirmation of EPS guidance alongside strong sales figures is a key takeaway for shareholders. Five Below's management is signaling confidence in the company's cost control and margin maintenance, even as they scale up operations. The projected diluted income per common share suggests that the company is effectively leveraging its growth to benefit shareholders.
However, the retail sector is notoriously cyclical and current performance must be weighed against potential macroeconomic shifts that could affect consumer spending. The company's performance in the fourth quarter—a critical period for retail—will be indicative of its resilience in the face of such challenges. Investors should also consider the impact of the company's expansion strategy on long-term profitability, as rapid growth can sometimes lead to inefficiencies or market saturation.
Five Below's Triple-Double strategy is an ambitious plan that focuses on three core areas: expanding the number of stores, increasing each store's potential and enhancing product and brand strategy. The reported net opening of 204 new stores is a testament to the company's aggressive growth trajectory. This expansion must be monitored for its impact on the company's operational efficiency and market saturation risks.
Furthermore, the emphasis on needs-based categories and seasonal offerings aligns with consumer trends favoring value and convenience. The company's ability to meet consumer demands with a compelling 'Wow! assortment' of products is a testament to its adept merchandising and inventory optimization. However, as competition intensifies, Five Below will need to continue innovating and differentiating its product offerings to maintain customer interest and drive traffic to both existing and new stores.
Total Sales Increased
Reiterates Fourth Quarter and Full Year Fiscal 2023 Guidance,
with Net Sales in the Upper Half of the Range and Comparable Sales of Approximately
PHILADELPHIA, PA, Jan. 08, 2024 (GLOBE NEWSWIRE) -- Five Below, Inc. (NASDAQ: FIVE) ("Five Below" or the "Company") today announced net sales results for the quarter-to-date period from October 29, 2023 through January 6, 2024 ("Holiday Period"). The Company expects fourth quarter and full year fiscal 2023 (ending February 3, 2024) results within the previously provided guidance, with net sales in the upper half of the range and comparable sales of approximately
Net sales for the Holiday Period, which includes New Year's Day in both periods, increased by
Joel Anderson, President and CEO of Five Below, stated, "With great execution by our crew, and supported by a favorable holiday calendar, we delivered on our goals for holiday 2023. We saw broad-based strength in performance across most worlds and continued strong results from converted stores. Needs-based categories continued to outperform, as did our Seasonal offering with the value and Wow! assortment of gifts and stocking stuffers resonating with customers. Based on our holiday results and forecast for January, we now expect to deliver fourth quarter sales in the upper half of our guidance range and are reiterating our EPS outlook."
Mr. Anderson added, "We are thrilled to complete our fiscal 2023 store openings with a record 204 net new stores. The pipeline for 2024 is strong, and we look forward to continuing to execute on the initiatives that underpin our Triple-Double strategy, namely expanding stores, increasing store potential, growing product and brand strategy, optimizing inventory and innovating with our crew."
The Company's previously provided guidance given on its third quarter 2023 earnings call is below.
Fourth Quarter Fiscal 2023 Guidance
- Net sales of
$1.32 billion to$1.35 billion - An approximate
2% to3% increase in comparable sales - Diluted income per common share of
$3.64 t o$3.80 on approximately 55.4 million estimated diluted weighted average shares outstanding
Full Year Fiscal 2023 Guidance
- Net sales of
$3.54 billion to$3.57 billion - An approximate
2.5% increase in comparable sales - Diluted income per common share of
$5.40 t o$5.56 on approximately 55.6 million estimated diluted weighted average shares outstanding
As previously announced, management is scheduled to participate in a presentation today at 8:30 a.m. Eastern Time at the 2024 ICR Conference. The event will be webcast live at http://investor.fivebelow.com/investors/. An archived replay will be available two hours after the conclusion of the live event.
Forward-Looking Statements:
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect management's current views and estimates regarding the Company's industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, store count potential and other financial and operating information. Investors can identify these statements by the fact that they use words such as "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future" and similar terms and phrases. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks related to disruption to the global supply chain, risks related to the Company's strategy and expansion plans, risks related to disruptions in our information technology systems and our ability to maintain and upgrade those systems, risks related to the inability to successfully implement our online retail operations, risks related to cyberattacks or other cyber incidents, risks related to our ability to select, obtain, distribute and market merchandise profitably, risks related to our reliance on merchandise manufactured outside of the United States, the availability of suitable new store locations and the dependence on the volume of traffic to our stores, risks related to changes in consumer preferences and economic conditions, risks related to increased operating costs, including wage rates, risks related to inflation and increasing commodity prices, risks related to potential systematic failure of the banking system in the United States or globally, risks related to extreme weather, pandemic outbreaks, global political events, war, terrorism or civil unrest (including any resulting store closures, damage, or loss of inventory), risks related to leasing, owning or building distribution centers, risks related to our ability to successfully manage inventory balance and inventory shrinkage, quality or safety concerns about the Company's merchandise, increased competition from other retailers including online retailers, risks related to the seasonality of our business, risks related to our ability to protect our brand name and other intellectual property, risks related to customers' payment methods, risks related to domestic and foreign trade restrictions including duties and tariffs affecting our domestic and foreign suppliers and increasing our costs, including, among others, the direct and indirect impact of current and potential tariffs imposed and proposed by the United States on foreign imports, risks associated with the restrictions imposed by our indebtedness on our current and future operations, the impact of changes in tax legislation and accounting standards and risks associated with leasing substantial amounts of space. For further details and a discussion of these risks and uncertainties, see the Company's periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission and available at www.sec.gov. If one or more of these risks or uncertainties materialize, or if any of the Company's assumptions prove incorrect, the Company's actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
About Five Below:
Five Below is a leading high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond. We believe life is better when customers are free to "let go & have fun" in an amazing experience filled with unlimited possibilities. With most items priced between
Investor Contact:
Five Below, Inc.
Christiane Pelz
Vice President, Investor Relations & Treasury
215-207-2658
InvestorRelations@fivebelow.com
FAQ
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