Discount retailer Five Below (NASDAQ:FIVE) reported results for the first quarter of 2020 after the market closed on Tuesday, providing shareholders with a much anticipated update. The fiscal quarter ran from Feb. 1 through May 2. During much of this time, all 900 Five Below locations were closed.

Therefore, it was no surprise to see Five Below's sales decrease in Q1. Quarterly net sales fell 45% year over year, while comparable sales plummeted 52%. As a result, the company posted a net loss per share of $0.91, compared to net earnings per share of $0.46 in the first quarter of 2019.

Nevertheless, Five Below's stock was surging in early trading.

Doors are open at a Five Below location.

Five Below's doors are reopening around the country. Image source: Five Below.

The market is forward-looking

Even though Q1 results were bad, the market looks ahead to the second quarter, and Five Below provided encouraging Q2 commentary. It's already reopened 90% of its stores. At reopened stores, Q2 comparable sales are back up a robust 8% to date. That's the news Wall Street was celebrating early Wednesday morning. However, the company withheld forward guidance.

Five Below's cash position shrank in Q1. It now has $139 million in cash, cash equivalents, and short-term investments. It had $262 million last quarter. This reflects the company's cash burn due to closed stores. However, Five Below is still debt-free, giving the retail business a solid foundation as it begins recovering.