In their most recent earnings report, Five Below showcased a net sales increase of 13.5% to $726.2 million from $639.6 million a year ago. Net income increased to $37.5 million versus $32.7 million. Comp sales also rose 2.7% year over year, according to the Q1 report.
Five Below is on track to complete their brick-and-mortar growth initiatives this year, with plans to open over 200 stores. In Q1, they opened 27 stores in 19 states.
The retailer is also leveraging another opportunity by acquiring 16 new leasing opportunities from Tuesday Morning. Tuesday Morning spaces are slightly larger than typical Five Below stores, however, this serves as a chance for the retailer to grow its Five Beyond concept (for items over $5) into a larger brick-and-mortar space.
According to CEO Joel Anderson, Five Below converted about 250 stores to the new Five Beyond prototype in the first quarter and it’s on track to convert 400 stores to the format before the end of the year.
“We are focused on growing our average unit volume through the addition of Five Beyond in the back of the store, as well as new products and services such as ear piercing and fun snarky helium balloons,” said Anderson.
Anderson confirmed consumers are still engaging with Five Below’s full product lineup. Seven out of its eight product segments performed strongly in Q1.
The company’s full-year financial forecast shows net sales from $3.5 billion to $3.57 billion, due to store openings and a 1% to 3% rise in comp sales. Net income for the year is predicted to range from $297 million to $319 million.
“We believe the company has a long runway of growth ahead as it progresses on its Triple-Double strategy, which aims to triple the store base to 3,500+ by 2030 (high-teens in 2023-2025), as well as double its sales and [earnings per share] relative to 2021 by the end of 2025,” said analysts at Telsey Advisory Group.
Source: Five Below – Retail Dive
Photo Credit: Five Below – Retail Dive
