Five Below Inc (NASDAQ: FIVE) stock soars on outstanding first quarter

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Five Below Inc (NASDAQ: FIVE) stock rose 21.7% on June 6th, 2018 (as of 2:20 PM GMT-4; Source: Google finance) after the company posted better than expected results for Q1 2018 driven by continued outperformance of the new stores and gave strong guidance for the second quarter 2018. The Operating income rose by 93.3% to $24.7 million from $12.8 million in the first quarter of FY17. The company has delivered 159.8% rise in the net income to $21.8 million compared to $8.4 million in the first quarter of fiscal 2017.

FIVE in the first quarter of FY 18 has reported the adjusted earnings per share of 39 cents, beating the analysts’ estimates for the adjusted earnings per share of 32 cents as per analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 27.2 percent to $296.3 million in the first quarter of FY 18, beating the analysts’ estimates for revenue of $290.9 million. The comparable sales increased by 3.2% in Q1 2018 driven by average ticket. As expected, the transactions were down slightly, largely due to the unusually cold and wet weather during the quarter, and lapping the spinner craze, which began to ramp in mid-April last year. The sales performance was accompanied by strong gross margins, SG&A leverage and tax rate favorability.

Further, the company has opened 33 new stores and ended the first quarter with 658 stores in 32 states. This represents an increase in stores of 19.0% from the end of the first quarter of FY17. Six of these stores made to the company’s top 25 all-time spring grand opening list. These stores are located in Pular, Georgia, Janesville, Wisconsin, Middletown, New York, Indianapolis, Indiana, Heinzville, Georgia and Florence, South Carolina, demonstrating the broad universal appeal of Five Below. The new stores continued to achieve very high levels of productivity, driving the industry leading less than one year average payback period on the new store investment. Year-to-date, FIVE have now opened 42 stores and are on track for the approximately 125 planned store openings in 2018. All in the company’s refreshed store look and feel and the company expect to end the year with approximately 750 stores.

For the second quarter 2018, FIVE expects earnings per share to be in the range of 36 cents to 38 cents a share and sales of $332 million to $335 million. The analysts are expecting earnings of 34 cents a share on sales of $327 million.

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