Ahead of the Bell: Five Below

Five Below rises in premarket as 4th-quarter results top Wall Street's expectations

Associated Press

NEW YORK (AP) -- Five Below's stock is climbing sharply Wednesday in premarket trading after the discount retailer's profit and revenue surpassed Wall Street expectations for the fourth quarter.

Retail sales have tanked amid a series of winter storms that made shoppers, already cutting back on clothing budgets, even more hesitant to head out to stores. That was certainly the concern of analysts before Five Below posted big numbers late Tuesday, said David Strasser of Janney Capital Markets.

"When a company has the growth prospects Five has, the uniqueness of experience that the store offers, and pre-weather, strong business momentum, there is always the risk of near term hiccups, but this is a must own growth stock," Strasser wrote in a report published Wednesday.

Five Below Inc. reported adjusted earnings of 47 cents per share on revenue of $212 million. Analysts predicted earnings of 45 cents per share on revenue of $207.8 million.

Sales at stores open at least a year, a key gauge of a retailer's health, edged up 0.3 percent.

For the first quarter, Five Below foresees adjusted earnings of 5 to 6 cents per share on revenue in a range of $120 million to $122 million. It anticipates fiscal 2014 adjusted earnings of 86 to 89 cents per share, with revenue between $672 million and $678 million.

Wall Street is calling for first-quarter earnings of 6 cents per share on revenue of $120 million and full-year earnings of 87 cents per share on revenue of $673.4 million.

Shares of Five Below gained $5.81, or 15.2 percent, to $44 before the market open.

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