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Here's Why Five Below (FIVE) is Marching Ahead of Industry
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Five Below, Inc. (FIVE - Free Report) remains committed to enhancing its customer experience in several ways. The company has been enhancing merchandise assortment, improving the supply chain, strengthening digital capabilities and delivering better WOW products, including the Five Beyond offering. Impressively, the specialty value retailer’s shares have appreciated 24% in the past three months, outperforming the industry’s 8.7% gain.
Let’s Delve Deeper
ive Below has added assisted checkout capabilities and provides same-day delivery service to make shopping convenient. We note that the company extended its partnership with Instacart to bring expedited same-day delivery to all its outlets. The addition of Venmo and PayPal as payment options also enriches the customer experience.
FIVE has been digitizing vendor transactions, implementing a core merchandising platform and applying cloud-based data along with analytics to analyze demand, and accordingly manage inventory. Five Below rolled out curbside pickup, launched the app and accelerated the buy online, pick up in-store business model.
Additionally, Five Below’s primary focus on teens and pre-teens helps the company enhance its customer base. The company is known for its impressive range of merchandise, as it remains committed to making innovations and refreshing its product range per the evolving consumer trends.
On the marketing front, the company is focusing on digital advertising. These factors combined with the company’s pricing strategy of selling products for $5 or below enable it to cater to demographic shoppers, alongside resonating with value-seeking customers.
Image Source: Zacks Investment Research
Markedly, the retailer continues to build a new prototype Five Beyond. Management concluded the 2022 Five Beyond growth initiative with approximately 250 stores converted to the new store format and expects to convert 80% of the chain into the new format by fiscal 2025. We believe that Five Below’s wide assortment of trend-right merchandise, solid in-store and online experience along with favorable pricing strategy are likely to remain the key growth drivers.
Five Below remains committed to expanding its store base, as well as enhancing the in-store experience to draw traffic and boost overall sales. During fiscal 2021, Five Below opened 171 stores and remodeled 45 outlets.
There is a tremendous opportunity to expand the store fleet throughout the United States to more than 3,500 locations by fiscal 2030. Further, the company remains focused on achieving an efficient cost structure, solid average net sales per store, supply-chain initiatives and economies of scale.
What Else?
Apart from the aforesaid tailwinds, analysts are quite optimistic about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for earnings per share currently stands at $4.61 for fiscal 2022 and $5.65 for fiscal 2023, showing an increase of 3.8% and 2.5%, respectively, over the past 30 days.
The Zacks Consensus Estimate for sales is pegged at $3.05 billion for fiscal 2022 and $3.59 billion for fiscal 2023, mirroring year-over-year growth of 7% and 18%, respectively. A Momentum Score of B coupled with an impressive long-term expected earnings growth rate of 19% further speaks volumes for the stock.
Five Below had earlier updated the "Triple-Double" growth vision and other long-term goals. With regard to this, management aims to double sales to $5.6 billion and more than double earnings per share to $10.00 by fiscal 2025. FIVE expects to increase the operating margin to nearly 14%. The company’s vision is to grow total sales from fiscal 2023 to 2025 by 20% per year with more than 75% of that growth coming from new stores. It expects a 20% increase in net income.
Management also expects to deliver 3-5% growth in comparable sales on an annual basis beginning fiscal 2023. The company foresees growth coming from increased penetration of Five Beyond and e-commerce business, new customer acquisition, sales lift from remodels and conversions, and selective merchandise price increases in response to inflation.
Wrapping up, Five Below appears to be well-poised for growth, based on the aforementioned strengths.
Tecnoglass manufactures and sells architectural glass and windows, and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Wingstop, which franchises and operates restaurants, currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests growth of 25.5% and 23%, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.
Capri Holdings, a global fashion luxury group of iconic brands like Versace, Jimmy Choo and Michael Kors, carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and earnings per share suggests growth of 0.9% and 10.5%, respectively, from the corresponding year-ago tallies. CPRI has a trailing four-quarter earnings surprise of 21%, on average.
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Here's Why Five Below (FIVE) is Marching Ahead of Industry
Five Below, Inc. (FIVE - Free Report) remains committed to enhancing its customer experience in several ways. The company has been enhancing merchandise assortment, improving the supply chain, strengthening digital capabilities and delivering better WOW products, including the Five Beyond offering. Impressively, the specialty value retailer’s shares have appreciated 24% in the past three months, outperforming the industry’s 8.7% gain.
Let’s Delve Deeper
ive Below has added assisted checkout capabilities and provides same-day delivery service to make shopping convenient. We note that the company extended its partnership with Instacart to bring expedited same-day delivery to all its outlets. The addition of Venmo and PayPal as payment options also enriches the customer experience.
FIVE has been digitizing vendor transactions, implementing a core merchandising platform and applying cloud-based data along with analytics to analyze demand, and accordingly manage inventory. Five Below rolled out curbside pickup, launched the app and accelerated the buy online, pick up in-store business model.
Additionally, Five Below’s primary focus on teens and pre-teens helps the company enhance its customer base. The company is known for its impressive range of merchandise, as it remains committed to making innovations and refreshing its product range per the evolving consumer trends.
On the marketing front, the company is focusing on digital advertising. These factors combined with the company’s pricing strategy of selling products for $5 or below enable it to cater to demographic shoppers, alongside resonating with value-seeking customers.
Image Source: Zacks Investment Research
Markedly, the retailer continues to build a new prototype Five Beyond. Management concluded the 2022 Five Beyond growth initiative with approximately 250 stores converted to the new store format and expects to convert 80% of the chain into the new format by fiscal 2025. We believe that Five Below’s wide assortment of trend-right merchandise, solid in-store and online experience along with favorable pricing strategy are likely to remain the key growth drivers.
Five Below remains committed to expanding its store base, as well as enhancing the in-store experience to draw traffic and boost overall sales. During fiscal 2021, Five Below opened 171 stores and remodeled 45 outlets.
There is a tremendous opportunity to expand the store fleet throughout the United States to more than 3,500 locations by fiscal 2030. Further, the company remains focused on achieving an efficient cost structure, solid average net sales per store, supply-chain initiatives and economies of scale.
What Else?
Apart from the aforesaid tailwinds, analysts are quite optimistic about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for earnings per share currently stands at $4.61 for fiscal 2022 and $5.65 for fiscal 2023, showing an increase of 3.8% and 2.5%, respectively, over the past 30 days.
The Zacks Consensus Estimate for sales is pegged at $3.05 billion for fiscal 2022 and $3.59 billion for fiscal 2023, mirroring year-over-year growth of 7% and 18%, respectively. A Momentum Score of B coupled with an impressive long-term expected earnings growth rate of 19% further speaks volumes for the stock.
Five Below had earlier updated the "Triple-Double" growth vision and other long-term goals. With regard to this, management aims to double sales to $5.6 billion and more than double earnings per share to $10.00 by fiscal 2025. FIVE expects to increase the operating margin to nearly 14%. The company’s vision is to grow total sales from fiscal 2023 to 2025 by 20% per year with more than 75% of that growth coming from new stores. It expects a 20% increase in net income.
Management also expects to deliver 3-5% growth in comparable sales on an annual basis beginning fiscal 2023. The company foresees growth coming from increased penetration of Five Beyond and e-commerce business, new customer acquisition, sales lift from remodels and conversions, and selective merchandise price increases in response to inflation.
Wrapping up, Five Below appears to be well-poised for growth, based on the aforementioned strengths.
Solid Picks in Retail
We highlighted three top-ranked stocks, namely Tecnoglass (TGLS - Free Report) , Wingstop (WING - Free Report) and Capri Holdings (CPRI - Free Report) .
Tecnoglass manufactures and sells architectural glass and windows, and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 43.4% and 82.2%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Wingstop, which franchises and operates restaurants, currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 5.8%, on average.
The Zacks Consensus Estimate for Wingstop’s current financial-year sales and earnings per share suggests growth of 25.5% and 23%, respectively, from the year-ago reported numbers. WING has an expected EPS growth rate of 5.8% for three-five years.
Capri Holdings, a global fashion luxury group of iconic brands like Versace, Jimmy Choo and Michael Kors, carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Capri Holdings’ current financial-year sales and earnings per share suggests growth of 0.9% and 10.5%, respectively, from the corresponding year-ago tallies. CPRI has a trailing four-quarter earnings surprise of 21%, on average.