AP News

Ahead of the Bell: Five Below


NEW YORK (AP) — An analyst said that shares of Five Below may decline a bit on Tuesday as investors had fairly high expectations for the company's second quarter, but he does not anticipate the stock being down for long, as the retailer's store growth plans are on pace and its third-quarter outlook was better than expected.

On Monday, Five Below Inc. reported second-quarter adjusted earnings of 4 cents per share on revenue of $86.8 million. Analysts surveyed by FactSet expected earnings of 1 cent per share on revenue of $82.1 million.

Daniel Binder of Jefferies & Co. says the company, which sells games, candy and other goods to preteens for $5 or less, had a strong quarter.

The analyst said that Five Below raised its guidance for store openings to 52 new stores for the year, up from 50 stores. It opened 27 new stores in the quarter.

Binder was also pleased that the retailer forecast third-quarter revenue at stores open at least a year will be up 4 percent to 6 percent. The analyst predicted a 4 percent increase in the figure, which is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

"With nearly half the quarter behind us, this is an encouraging sign," Binder wrote in a note to clients.

The analyst maintained a "Buy" rating and $40 price target for Five Below, which went public in July.

Five Below finished at $34.80 per share on Monday after rising to a high for the year of $36.34 earlier in the session.


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