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Five Below swings to profit in 1st quarter

PHILADELPHIA (AP) -- Discount retailer Five Below Inc., which sells games, candy and other goods for $5 or less, said it swung to a profit in the fiscal first quarter as sales increased more than 30 percent.

The company's net sales increased 33 percent to $95.6 million compared with $71.8 million in 2012 first quarter. Revenue at stores open at least a year rose 4.2 percent. The figure is an important gauge of a retailer's health, because it strips out stores that have opened or closed in the past year and measures growth at existing locations.

Five Below any reported net income of $1.6 million, or 3 cents per share, in the three months ended May 4. That compared with a net loss of $1.2 million, or 32 cents per share, in the year-ago period.

On an adjusted basis, Five Below said its adjusted earnings came to 5 cents per share.

The company went public last July.

Analysts, on average, expected earnings of 4 cents per share, on revenue of $93.9 million, according to FactSet.

President and CEO Thomas Vellios said the results were in-line with the company's expectations.

"As we said a few weeks ago, once the headwinds facing consumers abated mid-quarter, we saw a strengthening in our traffic and sales patterns as our trend-right merchandise at extremely compelling prices resonated with our customers."

Vellios said the company opened 14 new stores in the quarter and plans to open 60 new stores by the end of the year.

For the second quarter the company expects earnings per share of 5 to 6 cents per share, and adjusted earnings of 8 to 9 cents per share. The company forecast second-quarter sales between $112 million and $114 million. Wall Street, on average, was expecting adjusted earnings of 8 cents per share, on revenue of $109.6 million.

For the year, Five Below expects adjusted earnings of 65 to 68 cents per share on revenue of $524 million to $529 million. Analysts' average prediction was for earnings of 66 cents, on revenue of $530 million.

Company shares rose $1.84, or 5 percent, to $37.24 in afterhours trading following the results. During the regular session, shares fell 90 cents, or 2.5 percent, to close at $35.40.