Five Below Keeps Growing Through Q2

In a second quarter when it added 34 new stores, Five Below beat Wall Street estimates while driving sales growth.

Net income increased to $25.1 million, or 45 cents per diluted share, versus $16.8 million, or 30 cents per diluted share, in the year-prior period. Diluted income per common share in the quarter included a one-time three cent benefit. With that benefit excluded, diluted earnings per share of 42 cents topped a MarketBeat analyst consensus estimate of 38 cents.

Comparable sales gained 2.7% in the quarter year over year. Net sales increased by 22.7% to $347.7 million, while operating income increased by 15.7% to $30.4 million from the year-earlier quarter.

The company opened 34 new stores in the second quarter, ending the period with 692 stores in 33 states.

Joel Anderson, Five Below president and CEO, said, “We are very pleased with our second quarter results, which exceeded our expectations. Sales grew 23% driven by strong performance from both new and existing stores. We saw broad-based strength across our worlds as our high-quality, trend-right products at incredible values continued to resonate with customers. With our increasing scale, digital marketing expansion and store densification strategy, our brand awareness is growing, and we are seeing great opportunities for product, real estate and talent. We believe we are well positioned to continue to execute in the second half and look forward to continuing to provide our customers with the amazing, one-of-a kind shopping experience that is unique to Five Below.”

In terms of its third quarter outlook, Five Below said net sales are expected to be in the range of $301 million to $304 million based on opening approximately 50 new stores and assuming a 3% to 4% increase in comparable sales.