Five Below is Monday's IBD Stock Of The Day, as the retail discount chain broke out past a buy point amid higher-than-average volume Monday. FIVE shot up Monday.
On March, 15, Philadelphia-based Five Below, which operates 1,292 teen- and tween-focused discount stores in 42 states, closed out 2022 with an earnings and revenue beat. For the fourth quarter, Five Below earnings popped 23% to $3.07 per share, ending a three-quarter string of year-over-year declines. Revenue rose 12.7% to $1.12 billion, with top-line growth picking up for a second straight quarter. The results edged out analyst expectations of $3.06 earnings per share on $1.1 billion in sales.
Comparable sales rose 1.9%, topping forecasts of 0.9% growth.
Five Below projects first-quarter earnings of 59- to 65-cents per share on $723 million to $735 million in net sales. The outlook is about in line with analyst forecasts.
The company plans to open a record 200 stores in 2023, up from 150 new stores in 2022. Five Below expects fiscal 2023 earnings to range from $5.25 to $5.76 per share on $3.49 billion to $3.59 billion in sales. It recorded $4.69 earnings per share and $3.07 billion in sales in 2022.
Five Below also sees comparable sales increasing 1%-4%. Wall Street sees full year earnings at $5.62 per share and $3.57 billion in revenue, with 3% comparable sales growth.
Analysts see Five Below earnings growing on average 22% over the next three years, to $8.57 per share in 2026, according to FactSet.
Five Below Stock
FIVE jumped 4.7% to 216.72 in heavy volumeduring Monday's market trade, breaking above a 212.66 buy point and hitting a 52-week high. FIVE formed a short flat base and is up 21% since the beginning of 2023.
Five Below stock is up more than 4% so far in April after rising for nine straight months.
FIVE stock's relative strength line hit a new high.
On March 24, Loop Capital raised its price target on Five Below stock to 200, up from 190. Analyst Anthony Chukumba maintained a "Hold" rating on FIVE shares. Chukumba said Five Below remains one of the firm's "favorite fundamental organic square footage growth stories" and it "eagerly awaits" a more favorable entry point to become more constructive.
Five Below stock has a 94 Composite Rating out of 99. FIVE stock also has an 95 Relative Strength Rating. The EPS Rating is 84 out of 99.
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