Five Below Stock Drops After Q1 Results: Here's Why

Five Below, Inc. FIVE shares are down after the company reported its first-quarter financial results Wednesday. Here's a look at the details in the report.

The Details:

Five Below reported quarterly earnings of 60 cents per share which missed the analyst consensus estimate of 63 cents by 4.76% and represents a 10.45% decrease from the same period last year.

The company reported quarterly sales of $811.86 million which missed the analyst consensus estimate of $836.97 million by 3% and represents an 11.79% increase over sales of $726.25 million from the prior year’s period.

Five Below said comparable sales decreased by 2.3% versus the first quarter of fiscal 2023 and the effective tax rate was 23.5% compared to 18.6% in the first quarter of fiscal 2023.

“While our first quarter sales were disappointing, disciplined cost management enabled us to deliver adjusted EPS within our earnings outlook. Needs-based items such as those in our Candy, Food and Beauty departments outperformed expectations and drove positive sales results. We also saw positive comparable sales from our higher income customers; however, the macro environment disproportionately impacted our core lower income customers, resulting in overall comparable sales declines,” said Joel Anderson, President and CEO of Five Below.

“Five Below remains an extreme value, high growth retailer. We are excited to open approximately 230 new stores by the end of this year and bring Five Below to more neighborhoods, offering trend-right, WOW items at amazing value.”

Outlook: 

Five Below sees full-year earnings between $5.00 and $5.40 per share, versus the $6.00 per share estimate, and full-year revenue of between $3.79 billion and $3.87 billion, versus the $4.03 billion estimate.

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FIVE Price Action: According to Benzinga Pro, Five Below shares are down 15.7% after-hours at $111.99 at the time of publication Wednesday.

Image: Mike Mozart from Wikimedia Commons