'Our solid Black Friday weekend results were an encouraging start to the holiday season, though the highest volume selling days lie ahead,' interim CEO says
Shares of Five Below Inc. jumped after hours Wednesday after the teen-centric discount chain raised its full-year outlook, citing an "encouraging" Black Friday weekend as it heads into the final weeks of the holiday shopping season.
The retailer also said that Winnie Park would become its new chief executive on Dec. 16. Ken Bull, who has been the company's interim CEO following the departure of Joel Anderson earlier this year, will resume his role as chief operating officer.
Shares climbed 10.6% after hours.
The company, which sells toys and other gear generally priced below $5, said it expects full-year sales of $3.84 billion to $3.87 billion, with a roughly 3% dip in same-store sales. That forecast was better than one given in August for $3.73 billion to $3.8 billion, with same-store sales down 4% to 5.5%.
Five Below (FIVE) also said it expected adjusted earnings per share of $4.78 to $4.96, compared to August's forecast for $4.35 to $4.71.
Five Below reported third-quarter net income of $1.7 million, or 3 cents a share, compared with $14.6 million, or 26 cents a share, in the same quarter last year. Adjusted for a write-off of inventory and other items, Five Below earned 42 cents a share.
Revenue rose 14.6% to $843.7 million. Same-store sales crept 0.6% higher.
Analysts polled by FactSet expected Five Below to report adjusted earnings per share of 17 cents, on revenue of $801.5 million, with same-store sales down 4%.
"We delivered stronger performance across a broader group of our merchandise worlds compared to the second quarter and improved our operational execution," Bull said in a statement. "We were encouraged to see the positive results from the initiatives we undertook to add newness and deliver value in key categories."
He added: "Our solid Black Friday weekend results were an encouraging start to the holiday season, though the highest-volume selling days lie ahead."
As of the close of Wednesday's trading, the stock is down more than 50% so far this year.
Five Below's lower-income shoppers have suffered more due to higher costs of living, leaving them with less room to spend on things like toys. It has said the popularity of Squishmallow toys last year made it tougher to grow this year.
The chain has faced tougher competition from larger retailers like Walmart Inc. (WMT) and Target Corp. (TGT). In August, Five Below said it would ratchet back its expansion plans.
-Bill Peters
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