Five Below (FIVE) Moves 6.7% Higher: Will This Strength Last?
Five Below (FIVE) shares ended the last trading session 6.7% higher at $169.74. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 17.8% loss over the past four weeks.
Shares of Five Below have gained owing to the optimism surrounding its growth prospects. The company posted sturdy holiday sales results despite a challenging supply chain backdrop. It efficiently managed the product flow and remained proactive in meeting consumer demand. Net sales for the Holiday Period — from Oct 31, 2021 through Jan 1, 2022 — surged 20.6% year over year to $870.9 million. Markedly, comparable sales for the holiday shopping season rose 7.7%. An upbeat performance prompted management to guide sales, comps, and earnings per share near the high end of previously provided ranges.
Management expects fourth-quarter net sales between $985 million and $1,005 million. This suggests an improvement of 17.1% at the high end of the range. The company forecast comparable sales increase of 2-4%. For fiscal 2021, Five Below envisions net sales in the band of $2,837 million to $2,857 million. This indicates growth of 45.6% at the high end of the range. The company expects a 30% jump in comparable sales. The company anticipates earnings in the range of $2.36 to $2.48 per share for the final quarter and between $4.82 and $4.94 per share for the fiscal year.
This discount retailer is expected to post quarterly earnings of $2.48 per share in its upcoming report, which represents a year-over-year change of +12.7%. Revenues are expected to be $1.01 billion, up 17.1% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Five Below, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FIVE going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Five Below, Inc. (FIVE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
