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Five Below (FIVE) to Post Q1 Earnings: What's in Store?

·3 min read

Five Below, Inc. FIVE is likely to register an increase in the top line when it reports first-quarter fiscal 2021 results on Jun 3, after market close. The Zacks Consensus Estimate for revenues is pegged at $556.9 million, suggesting an improvement of 177.2% from the prior-year reported figure.

Meanwhile, the Zacks Consensus Estimate for earnings for the quarter under review has been stable at 66 cents over the past 30 days. The figure indicates a sharp increase from a loss of 91 cents reported in the prior-year quarter.

Notably, this extreme-value retailer for tweens, teens and beyond, has a trailing four-quarter earnings surprise of 47.7%, on average. In the last reported quarter, this Philadelphia, PA-based company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 4.3%.

Factors to Note

Five Below’s first-quarter performance is likely to have benefited from the company’s focus on providing trend-right products, improving supply chain, strengthening digital capabilities and delivering better WOW products. Also, the company has been enhancing in-store experience to draw traffic and enhance customer base. Additionally, the company’s favorable pricing strategy and focus on cost structure bode well.

Meanwhile, easing pandemic-induced restrictions, mass inoculation drive and fresh round of stimulus payments have triggered spending across the board. Clearly, demand was not restricted to a few categories as was noticed when the coronavirus crisis gripped the economy.

On its last earnings call, management guided net sales in the range of $540 million to $560 million for first-quarter fiscal 2021, which suggests an increase from $200.9 million reported in the year-ago period. It also projected earnings between 56 cents and 68 cents a share for the quarter under discussion.

Clearly, aforementioned factors raise optimism about the outcome of the results. However, margins still remain an area to watch. Impact of costs associated with digital fulfilment and supply chain cannot be ruled out. Again, any meaningful increase in corporate related expenses may weigh on margins.

Five Below, Inc. Price, Consensus and EPS Surprise

Five Below, Inc. Price, Consensus and EPS Surprise
Five Below, Inc. Price, Consensus and EPS Surprise

Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Five Below this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Five Below has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Signet Jewelers SIG has an Earnings ESP of +2.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dave & Buster's Entertainment PLAY has an Earnings ESP of +107.90% and a Zacks Rank #3.

Domino's Pizza DPZ has an Earnings ESP of +0.38% and a Zacks Rank #3.

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