Five Below, Inc. (NASDAQ: FIVE) stock rose over 7.7% on 3rd September, 2020 (as of 10:51 am GMT-4; Source: Google finance) post better than expected second quarter of 2020. The firm opened 63 new stores against 44 new stores opened in the second quarter last year. They now have 982 stores, which is a rise of 149 stores or 17.9% against 833 stores at the end of the second quarter of 2019. For the second quarter of 2020 sales rose 2.1% to $426.1 million, from $417.4 million in the second quarter last year. E-commerce sales were solid during the second quarter, with sales over 4x higher than pcp. But e-commerce accounts only low single-digit percentage of total sales indicating huge potential opportunity in the segment. However, Comparable sales fell 12.2%, on the back of fall of 19% in comp store operating days. But Comparable sales for the reopen period rose over 6%, with the reopened stores comping up over 4% when compared to the same open period last year, and e-commerce contributing over 2% to the total reopen period comp.
Gross profit fell $6.4 million to $139.8 million against pcp while Gross margin fell 220 basis points to 32.8% from 35% in the second quarter last year, having more than 2/3 of the decline from occupancy cost deleverage. The firm continued their growth and have increased the low-end of 2020 new store opening program from 100 to 110 stores, expecting to end the year with 1,010 to 1,020 stores, or unit growth of 12% to 13%. They are also remodeling over 45 stores and add self-checkout capabilities to over 100 additional existing stores. Diluted income per common share rose to $0.53 from $0.51 in the second quarter of fiscal 2019. Net income rose to $29.6 million from $28.8 million in the second quarter of fiscal 2019. Management sees improving trends as they enter third quarter while focusing on the all-important holiday season