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Five Below, Inc. Announces First Quarter Fiscal 2022 Financial Results

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Five Below, Inc.
Five Below, Inc.

PHILADELPHIA, PA, June 08, 2022 (GLOBE NEWSWIRE) -- Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the first quarter ended April 30, 2022.

For the first quarter ended April 30, 2022:

  • Net sales increased by 7.0% to $639.6 million from $597.8 million in the first quarter of fiscal 2021; comparable sales decreased by 3.6% versus the first quarter of fiscal 2021.

  • The Company opened 35 new stores and ended the quarter with 1,225 stores in 40 states. This represents an increase in stores of 12.7% from the end of the first quarter of fiscal 2021.

  • Operating income was $42.3 million compared to $63.7 million in the first quarter of fiscal 2021.

  • The effective tax rate was 22.3% compared to 20.9% in the first quarter of fiscal 2021.

  • Net income was $32.7 million compared to $49.6 million in the first quarter of fiscal 2021.

  • Diluted income per common share was $0.59 compared to $0.88 in the first quarter of fiscal 2021. The benefit from share-based accounting was approximately $0.03 in the first quarter of fiscal 2022 compared to $0.04 in the first quarter of fiscal 2021.

  • The Company repurchased 247,132 shares in the first quarter of fiscal 2022 at a cost of approximately $40.0 million.

Joel Anderson, President and CEO of Five Below, stated, “While first quarter sales were softer than expected, disciplined cost management enabled us to deliver against our earnings outlook. We are well positioned from an inventory standpoint with improved in-stocks and accelerated receipts for Summer and Back to School. We are pleased with the progress our teams are making across our strategic priorities, which are key to delivering on our vision for future growth, the Triple-Double. With the planned openings and conversions in fiscal 2022, we are on track to end the year with nearly half of our stores in the new Five Beyond format.”

Mr. Anderson continued, “In addition, we are capitalizing on real-time opportunities in the marketplace, including merchandise and real estate, while piloting new products and services that embody the rituals of life and milestones of growing up. With that said, as we look to the balance of the year, we expect the macro environment to remain challenging. We know that during these times, our customer seeks out value even more. We are well positioned to deliver on our commitment to bring fresh, new WOW products that our customers want, at extreme value, and with an amazing shopping experience.”

Second Quarter and Fiscal 2022 Outlook:
The Company expects the following results for the second quarter and full year fiscal 2022:

For the second quarter of Fiscal 2022:

  • Net sales are expected to be in the range of $675 million to $695 million based on opening approximately 30 new stores and assuming an approximate 2% to 5% decrease in comparable sales.

  • Net income is expected to be in the range of $41 million to $48 million.

  • Diluted income per common share is expected to be in the range of $0.74 to $0.86 on approximately 55.8 million diluted weighted average shares outstanding.

For the full year of Fiscal 2022:

  • Net sales are expected to be in the range of $3.04 billion to $3.12 billion based on opening approximately 160 new stores and assuming an approximate flat to 2% decrease in comparable sales.

  • Net income is expected to be in the range of $271 million to $293 million.

  • Diluted income per common share is expected to be in the range of $4.85 to $5.24 on approximately 55.8 million diluted weighted average shares outstanding.

  • Gross capital expenditures are expected to be approximately $225 million in fiscal 2022.

Conference Call Information:
A conference call to discuss the financial results for the first quarter of fiscal 2022 is scheduled for today, June 8, 2022, 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 in the investor relations section of the website.

A taped replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online and by dialing 412-317-0088. The pin number to access the telephone replay is 1634094. The replay will be available for approximately two weeks after 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 and uncertainties associated with the COVID-19 pandemic (including closures of our stores, adverse impacts on our sales and operations, future impairment charges and the risk of global recession, and the impact of government regulation), 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 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 extreme weather, pandemic outbreaks (in addition to COVID-19), 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 offering, 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 over 1,200 stores in 40 states. For more information, please visit www.fivebelow.com or find Five Below on Instagram, TikTok, Twitter and Facebook @FiveBelow.

Investor Contact:
Five Below, Inc.
Christiane Pelz
Vice President, Investor Relations & Treasury
215-207-2658
Christiane.Pelz@fivebelow.com

FIVE BELOW, INC.
Consolidated Balance Sheets
(Unaudited)
(in thousands)

 

 

April 30, 2022

 

January 29, 2022

 

May 1, 2021

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

120,501

 

$

64,973

 

$

84,170

Short-term investment securities

 

 

189,140

 

 

277,141

 

 

299,289

Inventories

 

 

504,182

 

 

455,104

 

 

326,710

Prepaid income taxes and tax receivable

 

 

4,511

 

 

11,325

 

 

2,248

Prepaid expenses and other current assets

 

 

87,280

 

 

96,196

 

 

55,175

Total current assets

 

 

905,614

 

 

904,739

 

 

767,592

Property and equipment, net

 

 

799,765

 

 

777,497

 

 

624,775

Operating lease assets

 

 

1,232,246

 

 

1,151,395

 

 

1,023,883

Long-term investment securities

 

 

10,182

 

 

37,717

 

 

8,684

Other assets

 

 

12,973

 

 

9,112

 

 

18,794

 

 

$

2,960,780

 

$

2,880,460

 

$

2,443,728

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Line of credit

 

$

 

$

 

$

Accounts payable

 

 

230,282

 

 

196,461

 

 

169,392

Income taxes payable

 

 

35,767

 

 

28,096

 

 

7,831

Accrued salaries and wages

 

 

13,089

 

 

53,539

 

 

26,942

Other accrued expenses

 

 

140,849

 

 

145,268

 

 

114,252

Operating lease liabilities

 

 

174,400

 

 

163,537

 

 

147,176

Total current liabilities

 

 

594,387

 

 

586,901

 

 

465,593

Other long-term liabilities

 

 

3,807

 

 

1,663

 

 

1,048

Long-term operating lease liabilities

 

 

1,209,785

 

 

1,135,456

 

 

1,014,768

Deferred income taxes

 

 

37,859

 

 

36,156

 

 

31,677

Total liabilities

 

 

1,845,838

 

 

1,760,176

 

 

1,513,086

Shareholders’ equity:

 

 

 

 

 

 

Common stock

 

 

555

 

 

556

 

 

560

Additional paid-in capital

 

 

242,607

 

 

280,666

 

 

320,234

Retained earnings

 

 

871,780

 

 

839,062

 

 

609,848

Total shareholders’ equity

 

 

1,114,942

 

 

1,120,284

 

 

930,642

 

 

$

2,960,780

 

$

2,880,460

 

$

2,443,728

 

 

 

 

 

 

 

 

 

 

FIVE BELOW, INC.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)

 

Thirteen Weeks Ended

 

April 30, 2022

 

May 1, 2021

Net sales

$

639,596

 

 

$

597,823

 

Cost of goods sold

 

432,819

 

 

 

396,954

 

Gross profit

 

206,777

 

 

 

200,869

 

Selling, general and administrative expenses

 

164,448

 

 

 

137,182

 

Operating income

 

42,329

 

 

 

63,687

 

Interest (expense) income and other (expense) income, net

 

(237

)

 

 

(977

)

Income before income taxes

 

42,092

 

 

 

62,710

 

Income tax expense

 

9,374

 

 

 

13,114

 

Net income

$

32,718

 

 

$

49,596

 

Basic income per common share

$

0.59

 

 

$

0.89

 

Diluted income per common share

$

0.59

 

 

$

0.88

 

Weighted average shares outstanding:

 

 

 

Basic shares

 

55,647,200

 

 

 

55,970,620

 

Diluted shares

 

55,834,287

 

 

 

56,274,491

 

 

 

 

 

 

 

 

 

FIVE BELOW, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

 

 

Thirteen Weeks Ended

 

 

April 30, 2022

 

May 1, 2021

Operating activities:

 

 

 

 

Net income

 

$

32,718

 

 

$

49,596

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

23,977

 

 

 

19,237

 

Share-based compensation expense

 

 

5,998

 

 

 

5,797

 

Deferred income tax expense

 

 

1,703

 

 

 

2,766

 

Other non-cash (income) expenses

 

 

(455

)

 

 

176

 

Changes in operating assets and liabilities:

 

 

 

 

Inventories

 

 

(49,078

)

 

 

(45,443

)

Prepaid income taxes and tax receivable

 

 

6,814

 

 

 

4,102

 

Prepaid expenses and other assets

 

 

4,878

 

 

 

3,333

 

Accounts payable

 

 

33,883

 

 

 

30,863

 

Income taxes payable

 

 

7,671

 

 

 

5,806

 

Accrued salaries and wages

 

 

(40,450

)

 

 

(16,503

)

Operating leases

 

 

4,341

 

 

 

3,594

 

Other accrued expenses

 

 

10,117

 

 

 

3,418

 

Net cash provided by operating activities

 

 

42,117

 

 

 

66,742

 

Investing activities:

 

 

 

 

Purchases of investment securities and other investments

 

 

(5,005

)

 

 

(232,437

)

Sales, maturities, and redemptions of investment securities

 

 

120,541

 

 

 

64,142

 

Capital expenditures

 

 

(58,091

)

 

 

(76,444

)

Net cash provided by (used in) investing activities

 

 

57,445

 

 

 

(244,739

)

Financing activities:

 

 

 

 

Repurchase and retirement of common stock

 

 

(40,007

)

 

 

 

Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units

 

 

80

 

 

 

7

 

Common shares withheld for taxes

 

 

(4,107

)

 

 

(6,623

)

Net cash used in financing activities

 

 

(44,034

)

 

 

(6,616

)

Net increase (decrease) in cash and cash equivalents

 

 

55,528

 

 

 

(184,613

)

Cash and cash equivalents at beginning of period

 

 

64,973

 

 

 

268,783

 

Cash and cash equivalents at end of period

 

$

120,501

 

 

$

84,170