Five Below’s Outlook Misses Estimates and the Stock Is Dropping

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Vehicles sit parked outside a Five Below store in Bloomington, Illinois.

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Daniel Acker/Bloomberg

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Shares of Five Below were falling Wednesday after the discount retailer’s 2022 guidance broadly missed consensus and the company posted fourth-quarter earnings that failed to excite investors.

Five Below (ticker: FIVE ) was down 4.6% to $163.51 in premarket trading.

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For the fiscal first quarter of 2022, Five Below is expecting revenue to range between $644 million and $658 million, assuming a flat to 2% decrease in comparable sales. Earnings are expected at between 54 cents and 62 cents a share, well below Wall Street consensus of 89 cents. Analysts surveyed by FactSet expect first-quarter revenue of $687 million.

Investors were concerned that Five Below’s headwinds could last throughout the entire fiscal year, based on the company’s full-year guidance. Annual net sales will clock in between $3.16 billion and $3.26 billion, below estimates calling for $3.3 billion. Earnings per share could range between $5.19 and $5.70, the company said. Analysts’ estimates had placed that figure at $5.85 a share.

The guidance reflected pandemic-driven delays in construction that have resulted in a shift of stores into the second half of the 2022 fiscal year and the first half of 2023, as well as ongoing inflationary impacts, the company said.

“Looking ahead to 2022, we will continue to play offense and focus on innovation and experience as we navigate a dynamic macro environment related to the lingering impacts of the pandemic,” said CEO Joel Anderson in a statement. “We are excited to grow our new Beyond store prototype, expand categories and pilot new services to further enhance the customer experience.”

Five Below’s fourth-quarter 2021 results weren’t strong enough to reassure investors. The retailer posted diluted earnings of $2.49 a share, narrowly beating consensus of $2.48 a share, on $996.3 million in revenue. Revenue fell shy of analysts’ forecasts for $1 billion.

The company’s full-year revenue was $2.85 billion, a 45.2% increase from the previous year. Earnings per share were $4.95. Both figures were mostly in line with estimates.

Comparable-store sales increased by 3.5% throughout the quarter, and 30.3% annually.

Write to Sabrina Escobar at [email protected]

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Credit: www.marketwatch.com /

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