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Five Below (Five) Rides on Solid Product Range, Digital Push
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Five Below, Inc.’s (FIVE - Free Report) focus on providing trend-right products, strengthening digital capabilities and delivering better WOW products bodes well. The company is known for its impressive range of merchandise, per the evolving consumer trends. These factors combined with its pricing strategy enable it to cater to demographic shoppers and resonate with value-seeking customers.
The company’s decent third-quarter fiscal 2021 performance is a testament to the same. Both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Impressive comparable sales run continued in the quarter. Solid product trends helped drive traffic and new customers to outlets.
Let’s Introspect
Five Below’s commitment toward enhancing merchandise assortment, strengthening digital footprint and achieving efficient cost structure is commendable. The company has been digitizing vendor transactions, implementing core merchandising platform and applying cloud-based data and analytics to analyze demand, and accordingly manage inventory.
The company has rolled out curbside pickup, launched the app and looks to accelerate buy online, pick up in-store business model. Markedly, the company extended its partnership with Instacart to bring expedited same-day delivery to all its outlets. To make shopping convenient, it is expanding assisted self-checkout capabilities. The addition of Venmo and PayPal as payment options also enriches customer experience.
Image Source: Zacks Investment Research
Five Below continued with its decent comparable sales run in the third quarter as well. The metric climbed 14.8%, following an increase of 39.2% in the preceding quarter. The figure also compared favorably with an increase of 12.8% registered in the year-ago period. The growth was driven by an increase in comp transactions of 14.3%. The company guided 2-4% increase in fourth-quarter comparable sales and a 30% jump in fiscal 2021.
Management envisions fourth-quarter net sales in the range of $985 million to $1,005 million compared with $858.5 million in the year-ago period. The company anticipates fiscal 2021 net sales in the band of $2,837-$2,857 million compared with $1,962.1 million reported in the year-ago period.
Bottom Line
Quite obviously, Five Below’s wide assortment of trend-right merchandise, solid in-store and online experience and favorable pricing strategy are likely to remain major growth drivers. The company’s business model, financial strength, store growth opportunities and upside potential offered by Five Beyond instill further optimism. However, the impact of any deleverage in SG&A expenses and supply chain constraints cannot be ruled out.
Five Below has exhibited a decent run on the bourses so far this year. Thanks to its operational initiatives — strengthening of omni-channel solutions, expanding customer reach and focus on brand innovation — this Zacks Rank #3 (Hold) stock has outperformed the Zacks Retail – Miscellaneous industry. In the said period, shares of this Philadelphia, PA-based company have increased about 15.2% compared with the industry’s growth of 5.3%.
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). BOOT delivered a trailing four-quarter earnings surprise of 35.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period.
The Children's Place, pure-play children’s specialty apparel retailer, carries a Zacks Rank #1. The company’s bottom line has outperformed the Zacks Consensus Estimate in the last reported quarter by a margin of 19.6%.
The Zacks Consensus Estimate for The Children's Place’s current financial year sales and EPS suggests growth of 27.4% and 464.9%, respectively, from the year-ago period. PLCE has an expected EPS growth rate of 8% for three-five years.
Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 29%, on average.
The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.
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Five Below (Five) Rides on Solid Product Range, Digital Push
Five Below, Inc.’s (FIVE - Free Report) focus on providing trend-right products, strengthening digital capabilities and delivering better WOW products bodes well. The company is known for its impressive range of merchandise, per the evolving consumer trends. These factors combined with its pricing strategy enable it to cater to demographic shoppers and resonate with value-seeking customers.
The company’s decent third-quarter fiscal 2021 performance is a testament to the same. Both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Impressive comparable sales run continued in the quarter. Solid product trends helped drive traffic and new customers to outlets.
Let’s Introspect
Five Below’s commitment toward enhancing merchandise assortment, strengthening digital footprint and achieving efficient cost structure is commendable. The company has been digitizing vendor transactions, implementing core merchandising platform and applying cloud-based data and analytics to analyze demand, and accordingly manage inventory.
The company has rolled out curbside pickup, launched the app and looks to accelerate buy online, pick up in-store business model. Markedly, the company extended its partnership with Instacart to bring expedited same-day delivery to all its outlets. To make shopping convenient, it is expanding assisted self-checkout capabilities. The addition of Venmo and PayPal as payment options also enriches customer experience.
Five Below continued with its decent comparable sales run in the third quarter as well. The metric climbed 14.8%, following an increase of 39.2% in the preceding quarter. The figure also compared favorably with an increase of 12.8% registered in the year-ago period. The growth was driven by an increase in comp transactions of 14.3%. The company guided 2-4% increase in fourth-quarter comparable sales and a 30% jump in fiscal 2021.
Management envisions fourth-quarter net sales in the range of $985 million to $1,005 million compared with $858.5 million in the year-ago period. The company anticipates fiscal 2021 net sales in the band of $2,837-$2,857 million compared with $1,962.1 million reported in the year-ago period.
Bottom Line
Quite obviously, Five Below’s wide assortment of trend-right merchandise, solid in-store and online experience and favorable pricing strategy are likely to remain major growth drivers. The company’s business model, financial strength, store growth opportunities and upside potential offered by Five Beyond instill further optimism. However, the impact of any deleverage in SG&A expenses and supply chain constraints cannot be ruled out.
Five Below has exhibited a decent run on the bourses so far this year. Thanks to its operational initiatives — strengthening of omni-channel solutions, expanding customer reach and focus on brand innovation — this Zacks Rank #3 (Hold) stock has outperformed the Zacks Retail – Miscellaneous industry. In the said period, shares of this Philadelphia, PA-based company have increased about 15.2% compared with the industry’s growth of 5.3%.
3 Picks You Can’t Miss Out On
Some better-ranked stocks are Boot Barn Holdings (BOOT - Free Report) , The Children's Place (PLCE - Free Report) , and Tapestry (TPR - Free Report) .
Boot Barn Holdings, the lifestyle retailer of western and work-related footwear, apparel and accessories, sports a Zacks Rank #1 (Strong Buy). BOOT delivered a trailing four-quarter earnings surprise of 35.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial year sales and earnings per share (EPS) suggests growth of 54.6% and 188%, respectively, from the year-ago period.
The Children's Place, pure-play children’s specialty apparel retailer, carries a Zacks Rank #1. The company’s bottom line has outperformed the Zacks Consensus Estimate in the last reported quarter by a margin of 19.6%.
The Zacks Consensus Estimate for The Children's Place’s current financial year sales and EPS suggests growth of 27.4% and 464.9%, respectively, from the year-ago period. PLCE has an expected EPS growth rate of 8% for three-five years.
Tapestry, which provides luxury accessories and branded lifestyle products, carries a Zacks Rank #2 (Buy). The company pulled off a trailing four-quarter earnings surprise of 29%, on average.
The Zacks Consensus Estimate for Tapestry’s current financial year sales and EPS suggests growth of 14.8% and 17.9%, respectively, from the year-ago period. TPR has an expected EPS growth rate of 12.3% for three-five years.