PHILADELPHIA – Five Below Inc . (NASDAQ:), a popular value retailer currently trading at $103.20, reported an 8.7% increase in net sales for the holiday period from early November 2024 to early January 2025, reaching $1.19 billion compared to $1.10 billion for the same period the previous year. Despite this rise, comparable store sales saw a decrease of 3.2%. According to InvestingPro analysis, the company has maintained profitability over the last twelve months, with a healthy gross profit margin of 35.2%.
Executive Chairman Tom Vellios expressed satisfaction with the holiday performance, indicating that it aligned with the company’s expectations. Vellios highlighted ongoing efforts to enhance product offerings, value, and the in-store experience, noting positive early customer responses to these initiatives.
CEO Winnie Park, who joined Five Below during the holiday season, praised the dedication of the company’s team and expressed enthusiasm for delivering value to customers through trend-right products and a fun shopping experience.
Based on the holiday season’s performance and January’s projections, Five Below anticipates fourth-quarter sales to land in the upper half of its previously stated guidance range. The company reiterated its earnings per share (EPS) outlook, expecting diluted income per share between $3.15 and $3.33, with an adjusted diluted income per share ranging from $3.23 to $3.41, excluding nonrecurring or non-cash items. InvestingPro data suggests the company is currently undervalued, with analysts setting price targets ranging from $88 to $150 per share. Subscribers can access over 30 additional financial metrics and insights about Five Below through InvestingPro’s comprehensive research reports.
For the full fiscal year 2024, Five Below’s guidance remains unchanged, with net sales projected to be between $3.84 billion and $3.87 billion and an approximate 3% decrease in comparable sales. The company forecasts a diluted income per share of $4.34 to $4.52 and an adjusted diluted income per share of $4.78 to $4.96.
The company’s management is scheduled to participate in a fireside chat at the 2025 ICR Conference today, where further insights into the company’s performance and strategy may be shared.
This news comes amidst a challenging retail environment, with Five Below navigating global supply chain disruptions, changes in consumer preferences, and increased competition from online retailers. The company maintains a solid financial position with a current ratio of 1.38 and an Altman Z-Score of 3.1, indicating financial stability. InvestingPro‘s detailed analysis, including exclusive ProTips and comprehensive financial health scores, provides deeper insights into the company’s competitive position and future prospects. The company’s forward-looking statements are based on current management expectations and are subject to a variety of risks and uncertainties.
Five Below, founded in 2002 and headquartered in Philadelphia, operates over 1,750 stores across 44 states, offering a range of products aimed primarily at teens and pre-teens. This report is based on a press release statement issued by the company.
In other recent news, Five Below has been the focus of multiple financial firms following its robust third-quarter performance. Deutsche Bank (ETR:) maintained a Hold rating on the company and increased the price target to $106, while Mizuho (NYSE:) also took a neutral stance, raising the target to $105. Both firms pointed out a projected 3-5% decline in fourth-quarter same-store sales. Meanwhile, Craig-Hallum maintained a Buy rating and raised its price target from $125 to $150, reflecting confidence in the company’s growth trajectory.
Loop Capital increased the price target for Five Below’s shares to $120 while maintaining a Hold rating. This adjustment came after the company reported a significant uptick in comparable sales growth, with revenue growing 14.23% year-over-year, and earnings surpassing the consensus forecast. Other firms such as Truist Securities, KeyBanc, and Guggenheim also revised their price targets for the company, citing factors such as strong revenue growth and improved store operations.
However, these firms also cautioned about potential challenges such as intensifying competition and the impact of tariffs. Notably, Five Below’s significant reliance on China for about 60% of its business was mentioned as a point of concern. These are all recent developments following the company’s impressive third-quarter performance and the appointment of a new CEO.
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