Five Below shares sink 7% after weak earnings guidance
Five Below Inc. FIVE, -3.67% shares sank 7.6% in Thursday trading after the discount retailer gave weak earnings guidance. Net income totaled $13.5 million, or 24 cents per share, up from $9.9 million, or 18 cents per share, last year. There was a 2-cent EPS benefit from employee share-based payments, the company said. Sales totaled $312.8 million, up from $257.2 million last year. The FactSet consensus was for EPS of 19 cents and sales of $304 million. Same-store sales rose 4.8%, ahead of the 3.7% FactSet consensus. UBS analysts think Five Below benefited from the spending environment, changes to its stores, and its merchandising, factors which drove second-quarter results. Moreover, analysts think the company capitalized on the Toys ‘R’ Us bankruptcy to snap up share. Analysts rate Five Below shares neutral with a $126 price target. For the fourth quarter, Five Below expects sales in the range of $593 to $600 million, same-store sales growth of 3% to 4%, and EPS of $1.53 to $1.57. The FactSet consensus is for sales of $592.7 million, same-store sales growth of 3% and EPS of $1.56. Five Below stock has accelerated 45.5% in 2018 while the S&P 500 index SPX, -1.64% has fallen 1.2% for the period.
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