Five Below, Inc. (NASDAQ: FIVE) today announced financial results
for the fourth quarter and full year of fiscal 2023 ended February
3, 2024, both of which contained one additional week ("53rd week")
versus the comparable periods, and outlook for fiscal 2024.
For the fourth quarter ended
February 3, 2024:
- Net sales increased by 19.1% to
$1.34 billion from $1.12 billion in the fourth quarter of fiscal
2022. Excluding the impact of the 53rd week in fiscal 2023, net
sales increased 14.9%; comparable sales increased by 3.1% on a
thirteen week basis.
- Net sales in the 53rd week were
$48.1 million and represented approximately $0.15 cents in diluted
earnings per share.
- The Company opened
63 net new stores and ended the quarter with 1,544 stores in 43
states. This represents an increase in stores of 15.2% from the end
of the fourth quarter of fiscal 2022.
- Operating income was
$268.4 million compared to $225.8 million in the fourth quarter of
fiscal 2022.
- The effective tax
rate was 25.8% compared to 24.8% in the fourth quarter of fiscal
2022.
- Net income was
$202.2 million compared to $171.3 million in the fourth quarter of
fiscal 2022.
- Diluted income per
common share was $3.65 compared to $3.07 in the fourth quarter of
fiscal 2022. The fourth quarter of fiscal 2022 included a $0.01
benefit from shared-based accounting.
Joel Anderson, President and CEO of Five Below, stated, "Holiday
2023 marked a strong end to the year for sales performance as our
amazing assortment of Wow product drove yet another quarter of comp
transaction growth, led by the Five Beyond format stores. In fiscal
2023, we opened a record 205 new stores and ended the year with
over half of our comparable stores in the Five Beyond format. The
benefit of strong sales performance to our profitability was offset
by higher than anticipated shrink headwinds, resulting in earnings
at the low end of our guidance range."
Mr. Anderson continued, “We have implemented additional shrink
mitigation initiatives based on our 2023 learnings. However, we
expect the resulting benefits to take some time to realize, and
therefore, we have not included any associated improvement in our
outlook this year. We will continue to focus on driving our growth
this year, supported by our five strategic pillars, delivering
between 225 and 235 planned new stores, approximately 200 store
conversions to the Five Beyond format and completing the expansion
of two distribution centers. We will leverage our growing scale and
sourcing capabilities to deliver even more Wow to our customers
while we utilize technology and data analytics throughout the
organization to refine our marketing strategies, generate inventory
efficiencies, and simplify processes for our Crew.”
For the fiscal year ended
February 3, 2024:
- Net sales increased by 15.7% to
$3.56 billion from $3.08 billion in fiscal 2022. Excluding the
impact of the 53rd week in fiscal 2023, net sales increased 14.1%;
comparable sales increased by 2.8% on a fifty-two week basis.
- Net sales in the 53rd week were
$48.1 million and represented approximately $0.15 cents in diluted
earnings per share.
- The Company opened
204 net new stores compared to 150 new stores in fiscal 2022.
- Operating income was
$385.6 million compared to $345.0 million in fiscal 2022.
- The effective tax
rate was 24.9% compared to 24.7% in fiscal 2022.
- Net income was
$301.1 million compared to $261.5 million in fiscal 2022.
- Diluted income per common share was
$5.41 compared to $4.69 in fiscal 2022. The benefit from
share-based accounting was approximately $0.07 in fiscal 2023
compared to approximately $0.04 in fiscal 2022.
- The Company repurchased approximately
500,000 shares in fiscal 2023 at a cost of approximately $80.0
million.
First Quarter and Fiscal 2024 Outlook:The
Company expects the following results for the first quarter and
full year of fiscal 2024. This guidance does not include the impact
of share repurchases, if any.
For the first quarter of Fiscal 2024:
- Net sales are expected to be in the range of $826 million to
$846 million based on opening approximately 55 to 60 new stores and
assuming an approximate flat to 2% increase in comparable
sales.
- Net income is expected to be in the range of $32 million to $38
million.
- Diluted income per common share is expected to be in the range
of $0.58 to $0.69 on approximately 55.6 million diluted weighted
average shares outstanding.
For the full year of Fiscal 2024:
- Net sales are expected to be in the range of $3.97 billion to
$4.07 billion based on opening between 225 and 235 new stores and
assuming an approximate flat to 3% increase in comparable
sales.
- Net income is expected to be in the range of $318 million to
$346 million.
- Diluted income per common share is expected to be in the range
of $5.71 to $6.22 on approximately 55.6 million diluted weighted
average shares outstanding.
- Gross capital expenditures are expected to be approximately
$365 million in fiscal 2024.
Conference Call Information:A conference call
to discuss the financial results for the fourth quarter and full
year of fiscal 2023 is scheduled for today, March 20, 2024, 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 increased usage of machine
learning and other types of artificial intelligence in our
business, and challenges with properly managing its use; 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 Shop, 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 nearly 1,600
stores in 43 states. For more information, please visit
www.fivebelow.com or find Five Below on Instagram, TikTok, and
Facebook @FiveBelow.
Investor Contact:Five Below, Inc.Christiane
PelzVice President, Investor Relations &
Treasury215-207-2658investorrelations@fivebelow.com
FIVE BELOW, INC.Consolidated Balance
Sheets(Unaudited)(in thousands) |
|
|
February 3, 2024 |
|
January 28, 2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
179,749 |
|
|
$ |
332,324 |
|
Short-term investment securities |
|
280,339 |
|
|
|
66,845 |
|
Inventories |
|
584,627 |
|
|
|
527,720 |
|
Prepaid income taxes and tax receivable |
|
4,834 |
|
|
|
8,898 |
|
Prepaid expenses and other current assets |
|
153,993 |
|
|
|
130,592 |
|
Total current assets |
|
1,203,542 |
|
|
|
1,066,379 |
|
Property and equipment, net |
|
1,134,312 |
|
|
|
925,530 |
|
Operating lease assets |
|
1,509,416 |
|
|
|
1,319,132 |
|
Long-term investment
securities |
|
7,791 |
|
|
|
— |
|
Other assets |
|
16,976 |
|
|
|
13,870 |
|
|
$ |
3,872,037 |
|
|
$ |
3,324,911 |
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Line of credit |
$ |
— |
|
|
$ |
— |
|
Accounts payable |
|
256,275 |
|
|
|
221,120 |
|
Income taxes payable |
|
41,772 |
|
|
|
19,928 |
|
Accrued salaries and wages |
|
30,028 |
|
|
|
25,420 |
|
Other accrued expenses |
|
146,887 |
|
|
|
136,316 |
|
Operating lease liabilities |
|
240,964 |
|
|
|
199,776 |
|
Total current liabilities |
|
715,926 |
|
|
|
602,560 |
|
Other long-term liabilities |
|
6,826 |
|
|
|
4,296 |
|
Deferred income taxes |
|
66,743 |
|
|
|
59,151 |
|
Long-term operating lease
liabilities |
|
1,497,586 |
|
|
|
1,296,975 |
|
Total liabilities |
|
2,287,081 |
|
|
|
1,962,982 |
|
Shareholders’ equity: |
|
|
|
Common stock |
|
551 |
|
|
|
555 |
|
Additional paid-in capital |
|
182,709 |
|
|
|
260,784 |
|
Retained earnings |
|
1,401,696 |
|
|
|
1,100,590 |
|
Total shareholders’ equity |
|
1,584,956 |
|
|
|
1,361,929 |
|
|
$ |
3,872,037 |
|
|
$ |
3,324,911 |
|
FIVE BELOW, INC.Consolidated Statements of
Operations(Unaudited)(in thousands, except share and per share
data) |
|
|
Fourteen weeks ended |
|
Thirteen weeks ended |
|
Fifty-three weeks ended |
|
Fifty-two weeks ended |
|
February 3, 2024 |
|
January 28, 2023 |
|
February 3, 2024 |
|
January 28, 2023 |
Net sales |
$ |
1,337,736 |
|
|
$ |
1,122,751 |
|
|
$ |
3,559,369 |
|
|
$ |
3,076,308 |
|
Cost of goods sold (exclusive
of items shown separately below) |
|
786,122 |
|
|
|
670,354 |
|
|
|
2,285,544 |
|
|
|
1,980,817 |
|
Selling, general and
administrative expenses |
|
246,078 |
|
|
|
197,709 |
|
|
|
757,507 |
|
|
|
644,831 |
|
Depreciation and
amortization |
|
37,094 |
|
|
|
28,919 |
|
|
|
130,747 |
|
|
|
105,617 |
|
Operating income |
|
268,442 |
|
|
|
225,769 |
|
|
|
385,571 |
|
|
|
345,043 |
|
Interest income and other
income, net |
|
4,107 |
|
|
|
2,150 |
|
|
|
15,530 |
|
|
|
2,491 |
|
Income before income taxes |
|
272,549 |
|
|
|
227,919 |
|
|
|
401,101 |
|
|
|
347,534 |
|
Income tax expense |
|
70,350 |
|
|
|
56,599 |
|
|
|
99,995 |
|
|
|
86,006 |
|
Net income |
$ |
202,199 |
|
|
$ |
171,320 |
|
|
$ |
301,106 |
|
|
$ |
261,528 |
|
Basic income per common
share |
$ |
3.66 |
|
|
$ |
3.09 |
|
|
$ |
5.43 |
|
|
$ |
4.71 |
|
Diluted income per common
share |
$ |
3.65 |
|
|
$ |
3.07 |
|
|
$ |
5.41 |
|
|
$ |
4.69 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic shares |
|
55,194,999 |
|
|
|
55,524,883 |
|
|
|
55,487,252 |
|
|
|
55,547,267 |
|
Diluted shares |
|
55,356,074 |
|
|
|
55,808,193 |
|
|
|
55,621,619 |
|
|
|
55,745,279 |
|
FIVE BELOW, INC.Consolidated Statements of Cash
Flows(Unaudited)(in thousands) |
|
|
Fifty-three weeks ended |
|
Fifty-two weeks ended |
|
February 3, 2024 |
|
January 28, 2023 |
Operating activities: |
|
|
|
Net income |
$ |
301,106 |
|
|
$ |
261,528 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
130,747 |
|
|
|
105,617 |
|
Share-based compensation expense |
|
17,859 |
|
|
|
23,583 |
|
Deferred income tax expense |
|
7,592 |
|
|
|
22,995 |
|
Other non-cash expenses |
|
351 |
|
|
|
409 |
|
Changes in operating assets and liabilities: |
|
|
|
Inventories |
|
(56,907 |
) |
|
|
(72,616 |
) |
Prepaid income taxes and tax receivable |
|
4,064 |
|
|
|
2,427 |
|
Prepaid expenses and other assets |
|
(26,651 |
) |
|
|
(39,379 |
) |
Accounts payable |
|
35,133 |
|
|
|
24,891 |
|
Income taxes payable |
|
21,844 |
|
|
|
(8,168 |
) |
Accrued salaries and wages |
|
4,608 |
|
|
|
(28,119 |
) |
Operating leases |
|
51,515 |
|
|
|
30,022 |
|
Other accrued expenses |
|
8,358 |
|
|
|
(8,264 |
) |
Net cash provided by operating activities |
|
499,619 |
|
|
|
314,926 |
|
Investing activities: |
|
|
|
Purchases of investment securities and other investments |
|
(416,649 |
) |
|
|
(56,459 |
) |
Sales, maturities, and redemptions of investment securities |
|
195,364 |
|
|
|
304,473 |
|
Capital expenditures |
|
(335,050 |
) |
|
|
(251,954 |
) |
Net cash used in investing activities |
|
(556,335 |
) |
|
|
(3,940 |
) |
Financing activities: |
|
|
|
Cash paid for Revolving Credit Facility financing costs |
|
— |
|
|
|
(248 |
) |
Net proceeds from issuance of common stock |
|
980 |
|
|
|
824 |
|
Repurchase and retirement of common stock |
|
(80,541 |
) |
|
|
(40,007 |
) |
Proceeds from exercise of options to purchase common stock and
vesting of restricted and performance-based restricted stock
units |
|
288 |
|
|
|
777 |
|
Common shares withheld for taxes |
|
(16,586 |
) |
|
|
(4,981 |
) |
Net cash used in financing activities |
|
(95,859 |
) |
|
|
(43,635 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(152,575 |
) |
|
|
267,351 |
|
Cash and cash equivalents at
beginning of year |
|
332,324 |
|
|
|
64,973 |
|
Cash and cash equivalents at
end of year |
$ |
179,749 |
|
|
$ |
332,324 |
|
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