FIVE
$62.72
Five Below
($1.63)
(2.53%)
Earnings Details
Quarter January 2020
Wednesday, March 18, 2020 4:01:00 PM
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Summary

Five Below Beats

Five Below (FIVE) reported Quarter January 2020 earnings of $1.96 per share on revenue of $687.1 million. The consensus earnings estimate was $1.94 per share on revenue of $687.2 million. The Earnings Whisper number was $1.95 per share. Revenue grew 14.0% on a year-over-year basis.

Five Below Inc is a specialty retailer offering merchandise for teen and pre-teen customers. Its merchandise includes everything from sporting goods, games, fashion accessories and jewelry, to hobbies and collectibles, bath and body and among others.

Results
Reported Earnings
$1.96
Earnings Whisper
$1.95
Consensus Estimate
$1.94
Reported Revenue
$687.1 Mil
Revenue Estimate
$687.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Five Below, Inc. Announces Fourth Quarter and Fiscal 2019 Financial Results

Q4 net sales increased 14% to $687 million

Q4 EPS increased 24% to $1.97

PHILADELPHIA, PA, March 18, 2020 (GLOBE NEWSWIRE) -- Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the fourth quarter and full year of fiscal 2019 ended February 1, 2020.

For the fourth quarter ended February 1, 2020:

  • Net sales increased 14.0% to $687.1 million from $602.7 million in the fourth quarter of fiscal 2018; comparable sales decreased 2.2%
  • The Company opened 6 new stores and ended the quarter with 900 stores in 36 states. This represents an increase in stores of 20.0% from the end of the fourth quarter of fiscal 2018.
  • Operating income increased 23.7% to $144.1 million from $116.5 million in the fourth quarter of fiscal 2018.
  • The effective tax rate was 23.6% compared to 24.4% in the fourth quarter of fiscal 2018.
  • Net income increased 23.7% to $110.4 million from $89.3 million in the fourth quarter of fiscal 2018.
  • Diluted income per common share increased 23.9% to $1.97 from $1.59 in the fourth quarter of fiscal 2018. The benefit from share-based accounting was approximately $0.01 in the fourth quarter of both fiscal 2019 and fiscal 2018.

For the fiscal year ended February 1, 2020:

  • Net sales increased 18.4% to $1,846.7 million from $1,559.6 million in fiscal 2018; comparable sales increased 0.6%.
  • The Company opened 150 new stores compared to 125 net new stores opened in fiscal 2018.
  • Operating income increased 16.1% to $217.3 million from $187.2 million in fiscal 2018.
  • The effective tax rate was 21.0% compared to 22.0% in fiscal 2018.
  • Net income increased 17.0% to $175.1 million from $149.6 million in fiscal 2018.
  • Diluted income per common share increased 17.3% to $3.12 from $2.66 in fiscal 2018. The benefit from share-based accounting was approximately $0.14 in fiscal 2019 compared to $0.09 in fiscal 2018.

Joel Anderson, President and CEO of Five Below, stated, “Our fourth quarter results were in line with the revised expectations announced in conjunction with our holiday sales release. With six new store openings in the fourth quarter, we were very pleased to complete our planned 150 new stores, and achieve fourth quarter earnings growth of nearly 24%.”

Mr. Anderson continued, “Fiscal 2019 marked our fourteenth consecutive year of positive comps. I am very pleased with our teams’ execution and accomplishments in 2019. We had a very productive year as we mitigated tariffs, opened a record number of new stores and remodels, successfully tested Ten Below concepts, hired key senior executives, upgraded IT systems, and began a multi-year build out of our distribution network. In addition, we made our first financial investments outside of Five Below. We continue to build on our foundation and innovate across the organization, focusing on three key strategic priorities: experience, product and supply chain.”

“With the rapidly evolving COVID-19 situation, the health and safety of our associates and customers is our top priority, and we are taking the necessary steps to address the current environment across our stores, distribution centers and WowTown. As we announced earlier today, all of our stores will be temporarily closed beginning Thursday evening through March 31st. We will be paying our associates through this period. Given the uncertainty related to COVID-19, we are not providing guidance for the first quarter or fiscal 2020 at this time. If not for COVID-19, we would have expected fiscal 2020 to be in line with our 20/20 through 2020 goals,” concluded Mr. Anderson.

Fiscal 2020:
Given the uncertainty related to COVID-19, the Company will not be providing guidance for the first quarter or fiscal 2020.

Conference Call Information:
A conference call to discuss the fourth quarter and full year of fiscal 2019 financial results is scheduled for today, March 18, 2020, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 412-902-6516 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 10139577. 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 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 or coronavirus pandemic (including store closures and effects on customer demand or on our supply chain), risks related to the Company's strategy and expansion plans, risks related to the inability to successfully implement our expansion into online retail, 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, risks related to any legal proceedings that we may become subject to, the availability of suitable new store locations and the dependence on the volume of traffic to our stores, risks related to the Company's continued retention of its executive officers, senior management and other key personnel, risks related to changes in consumer preferences and economic conditions, risks related to increased operating costs, including wage rates, risks related to extreme weather, 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 cyber security, 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 recent 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 know life is way better when you're free to "let go & have fun" in an amazing experience filled with unlimited possibilities. With most items priced $1-$5, and some extreme value items priced up to just $10, we make it easy to say YES! to the newest, coolest stuff across 8 awesome Five Below worlds: Style, Room, Sports, Tech, Create, Party, Candy and Now. Founded in 2002 and headquartered in Philadelphia, Pennsylvania, Five Below today has over 900 stores in 36 states. For more information, please visit www.fivebelow.com and a store!


FIVE BELOW, INC.

Consolidated Balance Sheets
(Unaudited)
(in thousands)

  February 1, 2020 February 2, 2019
Assets    
Current assets:    
Cash and cash equivalents $202,490  $251,748 
Short-term investment securities 59,229  85,412 
Inventories 324,028  243,636 
Prepaid income taxes 4,063  1,337 
Prepaid expenses and other current assets 75,903  60,124 
Total current assets 665,713  642,257 
Property and equipment, net 439,086  301,297 
Operating lease assets 842,988   
Deferred income taxes   6,126 
Other assets 10,874  2,584 
  $1,958,661  $952,264 
     
Liabilities and Shareholders’ Equity    
Current liabilities:    
Line of credit $  $ 
Accounts payable 130,242  103,692 
Income taxes payable 9,505  20,626 
Accrued salaries and wages 19,873  24,586 
Other accrued expenses 81,255  104,201 
Operating lease liabilities 110,470   
Total current liabilities 351,345  253,105 
Deferred rent and other 1,199  84,065 
Deferred income taxes 8,716   
Long-term operating lease liabilities 837,623   
Total liabilities 1,198,883  337,170 
Shareholders’ equity:    
Common stock 557  557 
Additional paid-in capital 322,330  352,702 
Retained earnings 436,891  261,835 
Total shareholders’ equity 759,778  615,094 
  $1,958,661  $952,264 


FIVE BELOW, INC.

Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)

  Thirteen weeks ended Fifty-two weeks ended
  February 1, 2020 February 2, 2019 February 1, 2020 February 2, 2019
Net sales $687,130  $602,684  $1,846,730  $1,559,563 
Cost of goods sold 398,002  358,679  1,172,764  994,478 
Gross profit 289,128  244,005  673,966  565,085 
Selling, general and administrative expenses 145,027  127,497  456,682  377,901 
Operating income 144,101  116,508  217,284  187,184 
Interest income and other, net 333  1,503  4,285  4,623 
Income before income taxes 144,434  118,011  221,569  191,807 
Income tax expense 34,060  28,749  46,513  42,162 
Net income $110,374  $89,262  $175,056  $149,645 
Basic income per common share $1.98  $1.60  $3.14  $2.68 
Diluted income per common share $1.97  $1.59  $3.12  $2.66 
Weighted average shares outstanding:        
Basic shares 55,692,475  55,761,714  55,823,535  55,763,034 
Diluted shares 56,006,952  56,230,318  56,166,167  56,220,864 


FIVE BELOW, INC.

Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

  Fifty-two weeks ended
  February 1, 2020 February 2, 2019
Operating activities:    
Net income $175,056  $149,645 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 54,979  41,451 
Share-based compensation expense 12,383  12,018 
Deferred income tax expense 14,842  550 
Other non-cash expenses 117  44 
Changes in operating assets and liabilities:    
Inventories (80,392) (56,599)
Prepaid income taxes (2,726) 927 
Prepaid expenses and other assets (16,603) (15,655)
Accounts payable 20,742  32,866 
Income taxes payable (11,121) (4,649)
Accrued salaries and wages (4,713) 1,680 
Operating leases 13,922  12,143 
Other accrued expenses 10,543  9,712 
Net cash provided by operating activities 187,029  184,133 
Investing activities:    
Purchases of investment securities and other investments (136,148) (117,371)
Sales, maturities, and redemptions of investment securities 154,865  191,619 
Capital expenditures (212,297) (113,720)
Net cash used in investing activities (193,580) (39,472)
Financing activities:    
Net proceeds from issuance of common stock 435  365 
Repurchase and retirement of common stock (36,885) (1,987)
Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units 4,110  4,030 
Common shares withheld for taxes (10,367) (7,990)
Net cash used in financing activities (42,707) (5,582)
Net (decrease) increase in cash and cash equivalents (49,258) 139,079 
Cash and cash equivalents at beginning of year 251,748  112,669 
Cash and cash equivalents at end of year $202,490  $251,748 
Investor Contact:Five Below, Inc.Christiane PelzVice President, Investor Relations215-207-2658Christiane.Pelz@fivebelow.com

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Source: Five Below, Inc.