AP News

Five Below posts wider 2nd-quarter loss


PHILADELPHIA (AP) — Retailer Five Below Inc., which sells games, candy and other goods to preteens for $5 or less, reported a loss for its second quarter due to one-time costs. The company, which went public in July, also forecast results for the third quarter and full year in line with or beating estimates.

Five Below posted a loss of $64.2 million, or $3.41 per share, for the period that ended July 28. That's compared with a loss of $1.7 million, or 10 cents per share, in its second quarter last year. After adjusting for dividends paid to preferred shareholders and other special items, the company earned 4 cents per share in both quarters. Analysts polled by FactSet were expecting the company to earn 1 cent per share.

Five Below's revenue increased 43 percent to $86.8 million, beating forecasts of $82.1 million. And its sales at stores open at least a year increased 8.6 percent. This is considered a key indicator of a retailer's financial performance as it strips away the impact of recently opened or closed stores.

The company opened 27 new stores and ended the period with 226 stores in 18 states.

Five Below co-founder, President and CEO Thomas Vellios said the quarter reflects the strength of its business model.

Looking ahead, the company forecast a loss of 1 cent per share for the third quarter on revenue of $79 to $81 million. On an adjusted basis, it expects to break even or earn 1 cent per share for the period. Analysts were expecting break-even earnings per share and revenue of $79.6 million.

Five Below forecast a loss of $1.31 to $1.33 per share for the full 2012 fiscal year with revenue of $402 million to $407 million. On an adjusted basis, it anticipates earnings of 45 to 47 cents per share. Analysts were expecting 44 cents per share on revenue of $399.3 million, according to FactSet.

The company's shares picked up 10 percent last week in anticipation of its earnings but fell nearly 7 percent to $32.43 in after-hours trading Monday. Its shares still remain well above their $17 IPO price from July.


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