Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

A Blowout Q2 Sends Shares of Five Below Inc. 17% Higher Today

By Daniel Miller - Sep 7, 2018 at 12:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The value retailer topped revenue, earnings, and same-store sales estimates.

What happened?

Shares of Five Below Inc. ( FIVE -3.14% ), a retailer offering products for under $5 targeted to tweens and teenagers, were soaring 17% as of 10:43 a.m. EDT on Friday, after the company released better-than-expected results for the fiscal 2018 second quarter.

So what

Net sales jumped by 22.7% to $347.7 million during the second quarter, easily topping analysts' estimates calling for $335 million. The gain was driven by new store openings, but Five Below also managed to increase its comparable-store sales by 2.7%, ahead of forecasts calling for a 0.1% increase. Net income soared 49.1% to $25.1 million, or $0.45 per share, topping analysts' estimates of $0.38.

Corner of a five dollar bill.

Image source: Getty Images.

In a press release, CEO Joel Anderson said:

We are very pleased with our second-quarter results, which exceeded our expectations. Sales grew 23% driven by strong performance from both new and existing stores. We saw broad-based strength across our worlds as our high quality, trend right products at incredible values continued to resonate with customers.

Now what

FIVE Chart

FIVE data by YCharts.

Investors continue to be optimistic about Five Below, with its stock up 175% over the past year alone, and nearly 300% over the past three years. Going forward, management will focus on its digital marketing growth strategies, increasing its scale, and growing its brand awareness. Partly due to those initiatives, management expects third-quarter comps to increase at an even stronger rate, ranging from 3% to 4%, and for another 50 new stores to help power total net sales.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Five Below, Inc. Stock Quote
Five Below, Inc.
$192.45 (-3.14%) $-6.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/04/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.