The coronavirus pandemic has infected more than 750,000 people worldwide and the death toll has crossed 35,000. Retailers have been facing the brunt of the alarming spread of the novel coronavirus. The retail sector is under major pressure with companies shutting stores, limiting store hours and withdrawing their guidance. In fact, companies are bound to keep stores shut for extended durations as the situation keeps getting worse with each day.
Five Below, Inc. FIVE is the latest to join the slew of companies that prolonged store closures. The company stated that that all stores will remain temporarily shut until it is not safe to reopen them. Incidentally, Five Below had shut down all its stores effective Mar 19 till Mar 31.
Well, other retailers like Nordstrom, Inc. JWN, Tailored Brands, Inc. TLRD and L Brands, Inc. LB have undertaken similar steps to contain the further spread of the deadly coronavirus. Nordstrom stated that it will prolong its temporary store closure plan across the United States and Canada for at least a week until Apr 5. While Tailored Brands will extend the temporary closure of its retail stores until at least May, L Brands stated that its stores in the United States and Canada will remain closed beyond the end of March.
Coming back to Five Below, management highlighted that most store and distribution center associates will be furloughed during the closure. Also, the company will support furloughed employees with health benefits costs during April.
Meanwhile, Five Below informed shoppers that they can continue purchasing the company’s products online at www.fivebelow.com. Notably, the company has been undertaking digital endeavors to strengthen its online business. In this regard, it acquired e-commerce platform, fulfillment operation and certain other assets of Hollar.com. Also, Five Below is working on digitizing vendor transactions, implementing core merchandizing platform and rolling out cloud-based data as well as analytics platform to analyze demand and accordingly optimize inventory.
In the last earnings call, management highlighted that it has decided not to provide first quarter or fiscal 2020 view due to uncertainty related to the corornavirus outbreak.
We note that shares of this Zacks Rank #5 (Strong Sell) company have slumped 44.9% in the past three months compared with the industry’s decline of 34.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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