Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 30, 2023

FIVE BELOW, INC.

(Exact Name of Registrant as Specified in Charter)

Pennsylvania

001-35600

75-3000378

(State or Other Jurisdiction of

Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

701 Market Street

Suite 300

Philadelphia, PA 19106

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (215) 546-7909

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	FIVE	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.


☐			Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02			Results of Operations and Financial Condition.

On August 30, 2023, Five Below, Inc. (the “Company”) issued a press release regarding its sales and earnings results for the second quarter and the year-to-date period ended July 29, 2023 (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1, and is being furnished, not filed, under item 2.02 of this Current Report on Form 8-K. As previously announced, the Company has scheduled a conference call for 4:30 p.m. Eastern Time on August 30, 2023 to discuss the financial results.


Item 9.01			Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.						Description
99.1						Press Release dated August 30, 2023 announcing the Company's financial results for the second quarter and the year-to-date period ended July 29, 2023.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Five Below, Inc.

Date: August 30, 2023

By:

/s/ Kristy Chipman

Name:

Kristy Chipman

Title:

Chief Financial Officer and Treasurer

EXHIBIT INDEX


Exhibit No.						Description
99.1						Press Release dated August 30 , 2023 announcing the Company's financial results for the second quarter and the year-to-date period ended July 29, 2023.

NEWS RELEASE

Five Below, Inc. Announces Second Quarter Fiscal 2023 Financial Results

Q2 Net Sales Increase of 13.5%

Q2 Comparable Sales Increase of 2.7% with a 4.5% Increase in Comparable Transactions

Q2 EPS Increase of 13.5% to $0.84

PHILADELPHIA, PA – (August 30, 2023) – Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the second quarter and year to date period ended July 29, 2023.

For the second quarter ended July 29, 2023:

•Net sales increased by 13.5% to $759.0 million from $668.9 million in the second quarter of fiscal 2022; comparable sales increased by 2.7% versus the second quarter of fiscal 2022.

•The Company opened 40 new stores and ended the quarter with 1,407 stores in 43 states. This represents an increase in stores of 12.4% from the end of the second quarter of fiscal 2022.

•Operating income was $58.6 million compared to $56.0 million in the second quarter of fiscal 2022.

•The effective tax rate was 25.6% compared to 26.3% in the second quarter of fiscal 2022.

•Net income was $46.8 million compared to $41.3 million in the second quarter of fiscal 2022.

•Diluted income per common share was $0.84 compared to $0.74 in the second quarter of fiscal 2022.

Joel Anderson, President and CEO of Five Below, said, “We are pleased to deliver second quarter results in line with our guidance on the top and bottom line. Notably, the 2.7% comparable sales increase was driven by a 4.5% increase in comp transactions, illustrating the success of our Five Beyond conversion strategy and the appeal of our extreme value, WOW offering."

Mr. Anderson continued, “As we look to the second half of the year, our merchants have sourced a terrific line-up of fresh, trend-right product at outstanding value for the holiday season. While we are adjusting our earnings guidance to reflect an anticipated increase in shrink reserves, our sales outlook remains unchanged. We will continue to play offense on sourcing amazing product, capitalizing on an improved supply chain, opening a record number of new stores, and executing on the continued success of our Five Beyond store format."

For the year to date period ended July 29, 2023:

•Net sales increased by 13.5% to $1,485.2 million from $1,308.5 million in the year to date period of fiscal 2022; comparable sales increased by 2.7% versus the year to date period of fiscal 2022.

•The Company opened 67 new stores compared to 62 new stores in the year to date period of fiscal 2022.

•Operating income was $101.0 million compared to $98.3 million in the year to date period of fiscal 2022.

•The effective tax rate was 22.6% compared to 24.6% in the year to date period of fiscal 2022.

•Net income was $84.3 million compared to $74.1 million in the year to date period of fiscal 2022.

•Diluted income per common share was $1.51 compared to $1.33 in the year to date period of fiscal 2022. The benefit from share-based accounting was approximately $0.06 in the year to date period of fiscal 2023 compared to $0.02 in the year to date period of fiscal 2022.

Third Quarter and Fiscal 2023 Outlook:

The Company expects the following results for the third quarter and full year fiscal 2023:

For the third quarter of Fiscal 2023:

•Net sales are expected to be in the range of $715 million to $730 million based on opening approximately 70 new stores and assuming an approximate flat to 2% increase in comparable sales.

•Net income is expected to be in the range of $10 million to $14 million.

•Diluted income per common share is expected to be in the range of $0.17 to $0.25 on approximately 55.9 million diluted weighted average shares outstanding.

For the full year of Fiscal 2023:

•Net sales are expected to be in the range of $3.50 billion to $3.57 billion based on opening over 200 new stores and assuming an approximate 1% to 3% increase in comparable sales.

•Net income is expected to be in the range of $295 million to $311 million.

•Diluted income per common share is expected to be in the range of $5.27 to $5.55 on approximately 55.9 million diluted weighted average shares outstanding.

•The 53rd week is expected to contribute approximately $40 million in sales and approximately $0.08 in diluted income per common share.

•Gross capital expenditures are expected to be approximately $335 million in fiscal 2023.

Conference Call Information:

A conference call to discuss the financial results for the second quarter of fiscal 2023 is scheduled for today, August 30, 2023, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 412-902-6753 approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.fivebelow.com, where a replay will be available shortly after the conclusion of the call.

Forward-Looking Statements:

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect management's current views and estimates regarding the Company's industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, store count potential and other financial and operating information. Investors can identify these statements by the fact that they use words such as "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future" and similar terms and phrases. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks related to disruption to the global supply chain, risks related to the Company's strategy and expansion plans, risks related to disruptions in our information technology systems and our ability to maintain and upgrade those systems, risks related to the inability to successfully implement our online retail operations, risks related to cyberattacks or other cyber incidents, risks related to our ability to select, obtain, distribute and market merchandise profitably, risks related to our reliance on merchandise manufactured outside of the United States, the availability of suitable new store locations and the dependence on the volume of traffic to our stores, risks related to changes in consumer preferences and economic conditions, risks related to increased operating costs, including wage rates, risks related to inflation and increasing commodity prices, risks related to potential systematic failure of the banking system in the United States or globally, risks related to extreme weather, pandemic outbreaks, global political events, war, terrorism or civil unrest (including any resulting store closures, damage, or loss of inventory), risks related to leasing, owning or building distribution centers, risks related to our ability to successfully manage inventory balance and inventory shrinkage, quality or safety concerns about the Company's merchandise, increased competition from other retailers including online retailers, risks related to the seasonality of our business, risks related to our ability to protect our brand name and other intellectual property, risks related to customers' payment methods, risks related to domestic and foreign trade restrictions including duties and tariffs affecting our domestic and foreign suppliers and increasing our costs, including, among others, the direct and indirect impact of current and potential tariffs imposed and proposed by the United States on foreign imports, risks associated with the restrictions imposed by our indebtedness on our current and future operations, the impact of changes in tax legislation and accounting standards and risks associated with leasing substantial amounts of space. For further details and a discussion of these risks and uncertainties, see the Company's periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission and available at www.sec.gov. If one or more of these risks or uncertainties materialize, or if any of the Company's assumptions prove incorrect, the Company's actual results may vary in

material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About Five Below:

Five Below is a leading high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond. We believe life is better when customers are free to "let go & have fun" in an amazing experience filled with unlimited possibilities. With most items priced between $1 and $5, and some extreme value items priced beyond $5 in our incredible Five Beyond offering, Five Below makes it easy to say YES! to the newest, coolest stuff across eight awesome Five Below worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now. Founded in 2002 and headquartered in Philadelphia, Pennsylvania, Five Below today has over 1,400 stores in 43 states. For more information, please visit www.fivebelow.com or find Five Below on Instagram, TikTok, X and Facebook @FiveBelow.

Investor Contact:

Five Below, Inc.

Christiane Pelz

Vice President, Investor Relations & Treasury

215-207-2658

InvestorRelations@fivebelow.com

FIVE BELOW, INC.

Consolidated Balance Sheets

(Unaudited)

(in thousands)


	July 29, 2023		January 28, 2023		July 30, 2022
Assets
Current assets:
Cash and cash equivalents	$	334,544	$	332,324	$	155,101
Short-term investment securities	101,813		66,845		117,315
Inventories	543,621		527,720		569,201
Prepaid income taxes and tax receivable	10,524		8,898		14,371

Prepaid expenses and other current assets	121,424		130,592		107,771
Total current assets	1,111,926		1,066,379		963,759
Property and equipment, net	1,013,686		925,530		842,002
Operating lease assets	1,407,474		1,319,132		1,267,316


Other assets	16,322		13,870		13,149
	$	3,549,408	$	3,324,911	$	3,086,226

Liabilities and Shareholders’ Equity
Current liabilities:
Line of credit	$	—	$	—	$	—

Accounts payable	249,093		221,120		266,114
Income taxes payable	—		19,928		—
Accrued salaries and wages	26,279		25,420		19,983
Other accrued expenses	162,919		136,316		159,976

Operating lease liabilities	211,177		199,776		184,450
Total current liabilities	649,468		602,560		630,523

Other long-term liabilities	4,925		4,296		4,077
Long-term operating lease liabilities	1,394,698		1,296,975		1,247,631
Deferred income taxes	60,171		59,151		41,414
Total liabilities	2,109,262		1,962,982		1,923,645

Shareholders’ equity:
Common stock	556		555		555
Additional paid-in capital	254,687		260,784		248,902
Retained earnings	1,184,903		1,100,590		913,124
Total shareholders’ equity	1,440,146		1,361,929		1,162,581
	$	3,549,408	$	3,324,911	$	3,086,226

FIVE BELOW, INC.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	Thirteen Weeks Ended				Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net sales	$	758,981	$	668,927	$	1,485,228	$	1,308,523
Cost of goods sold	494,402		440,418		985,845		873,237
Gross profit	264,579		228,509		499,383		435,286
Selling, general and administrative expenses	205,985		172,498		398,377		336,946
Operating income	58,594		56,011		101,006		98,340
Interest income (expense) and other income (expense), net	4,342		95		7,989		(142)


Income before income taxes	62,936		56,106		108,995		98,198
Income tax expense	16,101		14,762		24,682		24,136
Net income	$	46,835	$	41,344	$	84,313	$	74,062




Basic income per common share	$	0.84	$	0.74	$	1.51	$	1.33
Diluted income per common share	$	0.84	$	0.74	$	1.51	$	1.33

Weighted average shares outstanding:
Basic shares	55,675,357		55,498,471		55,662,930		55,572,425
Diluted shares	55,801,507		55,646,039		55,789,323		55,739,752

FIVE BELOW, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Twenty-Six Weeks Ended
	July 29, 2023		July 30, 2022
Operating activities:
Net income	$	84,313	$	74,062
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	60,068		49,120





Share-based compensation expense	9,605		12,139
Deferred income tax expense	1,021		5,258
Other non-cash expenses	72		281

Changes in operating assets and liabilities:
Inventories	(15,901)		(114,097)

Prepaid income taxes and tax receivable	(1,626)		(3,046)

Prepaid expenses and other assets	6,644		(15,967)
Accounts payable	17,674		64,908
Income taxes payable	(19,928)		(28,096)
Accrued salaries and wages	859		(33,556)

Operating leases	20,782		17,167
Other accrued expenses	5,685		17,984
Net cash provided by operating activities	169,268		46,157
Investing activities:
Purchases of investment securities and other investments	(128,950)		(21,848)
Sales, maturities, and redemptions of investment securities	93,982		219,391
Capital expenditures	(116,423)		(109,710)
Net cash (used in) provided by investing activities	(151,391)		87,833
Financing activities:




Net proceeds from issuance of common stock	440		464
Repurchase and retirement of common stock	—		(40,007)
Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units	54		102
Common shares withheld for taxes	(16,151)		(4,421)



Net cash used in financing activities	(15,657)		(43,862)
Net increase in cash and cash equivalents	2,220		90,128
Cash and cash equivalents at beginning of period	332,324		64,973
Cash and cash equivalents at end of period	$	334,544	$	155,101

Cover Page	Aug. 30, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 30, 2023
Entity Registrant Name	FIVE BELOW, INC.
Entity Incorporation, State or Country Code	PA
Entity File Number	001-35600
Entity Tax Identification Number	75-3000378
Entity Address, Address Line One	701 Market Street
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Philadelphia
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19106
City Area Code	215
Local Phone Number	546-7909
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001177609
Amendment Flag	false