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Yahoo
2 days ago
- Business
- Yahoo
3 Must-Know Facts About Five Below You'll Want to Check Out Before Buying the Stock
Five Below's growth strategy rests on opening new stores rapidly across the country. Despite macro uncertainty, management expects same-store sales to rise 3% to 5% in fiscal 2025. Shares have more than doubled in the last two months, resulting in a more expensive valuation. 10 stocks we like better than Five Below › Shares of Five Below (NASDAQ: FIVE) are trading 48% below their peak (as of June 10), which was established in August 2021. Clearly, the company has a long way to go to get back to its former glory. However, shares are surging recently, up 102% just in the past two months. The market is building up the momentum for Five Below, taking a more bullish stance. And this might be a compelling reason to consider adding the shares to your portfolio. If you're looking to buy this retail stock, take the time to learn these three things first. The rise of online shopping in the past couple of decades has been widely publicized. This is clear when looking at successful tech-driven enterprises like Amazon and Shopify that have helped support adoption of online shopping. However, consumers still like to shop in person; 84% of retail spending in the U.S. still takes place in a brick-and-mortar setting. And this has benefited a company like Five Below, which has rapidly expanded over the years. As of May 3, it had 1,826 stores scattered across the U.S. That figure is up nearly fivefold from 385 exactly a decade ago. Management has huge ambitions. "We still believe that there's an opportunity here for 3,500 stores," Chief Operating Officer Kenneth Bull said on the fiscal Q4 2024 earnings call in March. You'd probably struggle to find other retailers that are trying to grow their physical presence like this. But it makes sense why. Five Below's unit economics appear to be in good shape. A new location costs about $500,000 to open, but it can generate on average $2.2 million in revenue and $500,000 in earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first year. There remains sizable opportunity to expand in very populated states like California, Texas, Florida, New York, and Pennsylvania. Should Five Below reach this target, its revenue base should be much higher than it is today. There might be no industry more competitive than the retail sector. Consumers have unlimited choices on where to spend their money. There is no lock-in that retailers can benefit from. Margins are typically already thin. Consumers have ever-changing preferences and expectations. And there are low barriers to entry. That's why it's impressive to see the momentum Five Below has right now. During the first quarter of fiscal 2025 (ended May 3), the company reported 19.5% year-over-year revenue growth. This gain was driven by a 7.1% jump in same-store sales (SSS), which benefited from strong foot traffic. Management expects SSS to increase by 3% to 5% for the full fiscal year. While this indicates there will be a slowdown in the near term, it's encouraging to see this key performance metric growing. That's especially true in the current economic environment that could force consumers to be more critical about their spending habits. Five Below might be trading well off its peak. However, the fact that the stock has rocketed higher since early April creates a more difficult setup for prospective investors. The best opportunities come when shares are priced attractively. I don't believe this is the case here. Investors can buy the stock at a price-to-earnings ratio of 25.9. This represents a notable discount to the trailing three-year average. But it's a slight premium to the overall S&P 500 index. This provides no margin of safety, in my view. That's because Wall Street consensus analyst estimates call for earnings per share to rise at just a 6% compound annual rate between fiscal 2024 and fiscal 2027. That weak forecast won't necessarily bode well for the stock price. If the valuation comes down, interested investors have a better understanding of Five Below's growth outlook, as well as its recent fundamental momentum, to make an informed decision. Before you buy stock in Five Below, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Five Below wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy. 3 Must-Know Facts About Five Below You'll Want to Check Out Before Buying the Stock was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
2 days ago
- Business
- Globe and Mail
3 Must-Know Facts About Five Below You'll Want to Check Out Before Buying the Stock
Shares of Five Below (NASDAQ: FIVE) are trading 48% below their peak (as of June 10), which was established in August 2021. Clearly, the company has a long way to go to get back to its former glory. However, shares are surging recently, up 102% just in the past two months. The market is building up the momentum for Five Below, taking a more bullish stance. And this might be a compelling reason to consider adding the shares to your portfolio. If you're looking to buy this retail stock, take the time to learn these three things first. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Expanding at a brisk pace The rise of online shopping in the past couple of decades has been widely publicized. This is clear when looking at successful tech-driven enterprises like Amazon and Shopify that have helped support adoption of online shopping. However, consumers still like to shop in person; 84% of retail spending in the U.S. still takes place in a brick-and-mortar setting. And this has benefited a company like Five Below, which has rapidly expanded over the years. As of May 3, it had 1,826 stores scattered across the U.S. That figure is up nearly fivefold from 385 exactly a decade ago. Management has huge ambitions. "We still believe that there's an opportunity here for 3,500 stores," Chief Operating Officer Kenneth Bull said on the fiscal Q4 2024 earnings call in March. You'd probably struggle to find other retailers that are trying to grow their physical presence like this. But it makes sense why. Five Below's unit economics appear to be in good shape. A new location costs about $500,000 to open, but it can generate on average $2.2 million in revenue and $500,000 in earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first year. There remains sizable opportunity to expand in very populated states like California, Texas, Florida, New York, and Pennsylvania. Should Five Below reach this target, its revenue base should be much higher than it is today. Success in a tough industry There might be no industry more competitive than the retail sector. Consumers have unlimited choices on where to spend their money. There is no lock-in that retailers can benefit from. Margins are typically already thin. Consumers have ever-changing preferences and expectations. And there are low barriers to entry. That's why it's impressive to see the momentum Five Below has right now. During the first quarter of fiscal 2025 (ended May 3), the company reported 19.5% year-over-year revenue growth. This gain was driven by a 7.1% jump in same-store sales (SSS), which benefited from strong foot traffic. Management expects SSS to increase by 3% to 5% for the full fiscal year. While this indicates there will be a slowdown in the near term, it's encouraging to see this key performance metric growing. That's especially true in the current economic environment that could force consumers to be more critical about their spending habits. Valuation matters to investors Five Below might be trading well off its peak. However, the fact that the stock has rocketed higher since early April creates a more difficult setup for prospective investors. The best opportunities come when shares are priced attractively. I don't believe this is the case here. Investors can buy the stock at a price-to-earnings ratio of 25.9. This represents a notable discount to the trailing three-year average. But it's a slight premium to the overall S&P 500 index. This provides no margin of safety, in my view. That's because Wall Street consensus analyst estimates call for earnings per share to rise at just a 6% compound annual rate between fiscal 2024 and fiscal 2027. That weak forecast won't necessarily bode well for the stock price. If the valuation comes down, interested investors have a better understanding of Five Below's growth outlook, as well as its recent fundamental momentum, to make an informed decision. Should you invest $1,000 in Five Below right now? Before you buy stock in Five Below, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Five Below wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor 's total average return is999% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Yahoo
07-06-2025
- Business
- Yahoo
Five Below CFO exits as Q1 sales jump 20%
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Despite new trade policy challenges, Five Below's first quarter net sales increased 19.5% year over year to $970.5 million, according to a company press release Wednesday. The discount retailer's comparable sales rose 7.1% and net income jumped 30.8% to $41.1 million. Five Below raised its full-year guidance, now expecting net sales to range from $4.33 billion to $4.42 billion (compared to its previously expected $4.21 billion to $4.33 billion range), comps to increase between 3% and 5% (from flat to up 3%) and net income to land between $223 million and $249 million (compared to $216 million to $250 million). The retailer's Chief Financial Officer and Treasurer Kristy Chipman will step down from the position effective Friday, per an SEC filing. Chief Operating Officer Kenneth Bull will serve as interim chief financial officer and treasurer (a role he previously held for over a decade) as the company searches for a replacement. Five Below kicks off a new fiscal year with a solid performance as the retail industry grapples with sudden shifts in trade policy. "Our first quarter results demonstrate the effectiveness of our strategy, grounded in trend-right product, extreme value and a fun store experience,' CEO Winnie Park said in a statement. 'We were pleased to see broad-based strength across the majority of our merchandising worlds, resulting in a transaction-driven 7.1% increase in comparable sales, as well as strong performance from our new stores.' Park also thanked Chipman for her contributions to the company, which she had worked at since 2023, per LinkedIn. Chipman's departure comes as Five Below co-founder Tom Vellios is set to depart the company as executive chairman of the board on Thursday. The previously announced move for Vellios means he will serve in an advisory role through the end of the year. On a call with analysts Wednesday, Park said the company had a heightened focus on newness this past quarter that included sourcing timely and trendy products. The retailer opened 55 new stores across 20 states and plans to open about 150 net new stores for the full fiscal year. The CEO said the company has been working to mitigate the impact of ever-changing U.S. tariff policies. Five Below's plans have included vendor negotiations and sourcing diversification, as well as assortment and price adjustments. Park said the company's efforts have already reduced its goods sourced from China by about 10 percentage points for the back half of the year. Five Below's latest results follow news in March that it hired former Forever 21 chief marketing, digital and omni officer, Jacob Hawkins, as its new chief marketing officer. The appointment came just a few months after Park left her role as CEO at Forever 21 in December to lead Five Below. The chief executive told analysts on the call Wednesday that marketing is an important focus for Five Below as it seeks to inform customers of its value during key moments in life, such as holidays or back-to-school. Recommended Reading Walgreens slashes dividend as US retail drags in Q1 Sign in to access your portfolio
