Five Below Stock Down 4.6% on Holiday Sales Data



Numbers in details

Today, Five Below (FIVE) stock is down 4.6% as of 8:22 AM ET following the company’s announcement of its holiday sales data. Net sales for the holiday period (November 4 to January 5) were up 24.6% year-over-year to $526.1 million. The rise was driven mainly by new stores and comps, which grew 4.9%. In contrast, comps had increased 6.7% in fiscal 2017’s holiday period (October 29 to January 6).

However, Five Below CEO Joel Anderson has said that, due to good performance so far, sales are now expected to marginally exceed the company’s sales guidance. For the fourth quarter, Five Below had projected sales of $593 million–$600 million. EPS are expected to come in toward the high end of the guided range of $1.53–$1.57.

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As of January 11, Five Below stock has gained 14.9% to $117.57. In 2018, the stock was up 54.3%. Of the 18 analysts covering the stock, 72% rated it a “buy” and 28% rated it a “hold.” Currently, Wall Street analysts’ 12-month average target price for FIVE stock is $129.00, reflecting a 9.7% upside to the stock price as of January 11. We can expect a few target price and rating changes for Five Below today.

What’s ahead for FIVE in 2019?

Five Below’s compelling pricing is its biggest strength. Also, store expansion drive should add to its top line. It’s now working with suppliers to monitor costs due to the US–China tariff dispute and looking to procure goods from other countries. The company is exploring the option of select price increases if necessary.

Five Below launched its “Ten Below or Just Wow” concept in six stores, offering an assortment with a price tag of up to $10.00.

Five Below considers the liquidation of Toys “R” Us an opportunity to improve its sales.


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