Worth Watching Stock: Five Below, Incorporated (FIVE)

Five Below, Inc. (NASDAQ:FIVE) reported earnings for the three months ended April 2016 on June 02, 2016. The company earned $0.12 per share on revenue of $192.71M. Analysts had been modeling earning per share of $0.1 with $188.01M in revenue.

Five Below, Inc. (NASDAQ:FIVE) announced financial results for the thirteen weeks ended April 30, 2016.

For the thirteen weeks ended April 30, 2016:

  • Net sales increased by 25.4% to $192.7 million from $153.7 million in the first quarter of fiscal 2015; comparable store sales increased by 4.9%.
  • Operating income increased to $10.8 million from $7.0 million in the first quarter of fiscal 2015.
  • The Company opened 21 new stores and ended the quarter with 458 stores in 28 states. This represents an increase in stores of 19.0% from the end of the first quarter of fiscal 2015.
  • Net income was $6.8 million compared to $4.3 million in the first quarter of fiscal 2015.
  • Diluted income per common share was $0.12 compared to $0.08 per share in the first quarter of fiscal 2015.

Joel Anderson, CEO stated: “We are very pleased with our first quarter results that once again demonstrate the universal appeal of Five Below and the disciplined execution of our key initiatives. Our top-line outperformance was driven by continued strength at both our new and existing stores. This marks our 40th consecutive quarter of positive comparable store sales growth and we delivered a 50% increase in earnings per share driven by our ability to leverage our fixed costs on our strong comp and new store performance.”

Second Quarter and Fiscal 2016 Outlook:

For the second quarter of fiscal 2016, net sales are expected to be in the range of $216 million to $219 million based on opening 28 new stores and assuming an approximate 3% increase in comparable store sales. Net income is expected to be in the range of $8.5 million to $9.2 million, with a diluted income per common share range of $0.16 to $0.17 on approximately 55.0 million estimated diluted weighted average shares outstanding.

For fiscal 2016, the Company continues to expect net sales to be in the range of $995 million to $1,005 million based on opening 85 new stores for the full year and assuming an approximate 3% increase in comparable store sales. Net income is expected to be in the range of $69.9 million to $72.2 million, with a diluted income per common share of $1.27 to $1.31 on approximately 55.3 million estimated diluted weighted average shares outstanding.

Five Below, Inc. earnings per share showed an increasing trend of 19.7% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 161%.Analysts project EPS growth over the next 5 years at 22.86%. It has EPS annual growth over the past 5 fiscal years of 135.1% when sales grew 33.4. It reported 25.4% sales growth, and 57.3% EPS growth in the last quarter.

The stock is trading at $46.34, up 71.95% from 52-week low of $26.95. The stock trades down -0.34% from its peak of $46.5 and % below the consensus price target of $45.42. Its volume clocked up at 0.61 million shares which is lower than the average volume of 0.89 million shares. Its market capitalization currently stands at $2.49B.

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