Five Below Inc (NASDAQ: FIVE) stock falls despite a positive start

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Five Below Inc (NASDAQ: FIVE) stock fell 4.13% on December 6th, 2018 (as of 10:31 am GMT-5; Source: Google finance) after the company posted better than expected results for the third quarter of FY 18. Net income grew by 72.2% to $60.4 million compared to $35.1 million in the comparable period of fiscal 2017. The Company has opened 120 new stores compared to 103 new stores opened in the comparable period of fiscal 2017. Operating income increased by 31.1% to $70.7 million from $53.9 million in the comparable period of fiscal 2017. Diluted income per common share was $1.07 compared to $0.63 per share in the comparable period of fiscal 2017. Diluted income per common share included a $0.08 benefit in the thirty-nine weeks ended November 3, 2018 due to the accounting for employee share-based payments. Continued robust performance from new stores, with a record 53 openings during the quarter, and above-plan comp results were driven by a positive customer response to the compelling assortment of trend-right products across the worlds.

For the fourth quarter of fiscal 2018, net sales are expected to be in the range of $593 million to $600 million based on opening approximately 5 net new stores and assuming a 3% to 4% increase in comparable sales. Net income is expected to be in the range of $86.5 million to $88.5 million, with a diluted income per common share range of $1.53 to $1.57 on approximately 56.4 million estimated diluted weighted average shares outstanding.

For the full year of fiscal 2018, net sales are expected to be in the range of $1.550 billion to $1.557 billion based on opening approximately 125 net new stores and assuming a 3.3% to 3.7% increase in comparable sales. Net income is expected to be in the range of $146.9 million to $148.9 million, with a diluted income per common share of $2.60 to $2.64 on approximately 56.4 million estimated diluted weighted average shares outstanding.

FIVE in the third quarter of FY 18 has reported the adjusted earnings per share of 22 cents, beating the analysts’ estimates for the adjusted earnings per share of 19 cents, as per Zacks Investment Research. The company had reported the adjusted revenue growth of 21.6 percent to $312.8 billion in the third quarter of FY 18, beating the analysts’ estimates for revenue of $303.5 billion. Comparable sales increased by 3.6%. Net sales and diluted earnings per share in the 53rd week were $15.7 million and $0.03, respectively.

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