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Five Below, Inc. Announces Third Quarter Fiscal 2023 Financial Results

Q3 Net Sales Increase of 14.2%

Q3 Comparable Sales Increase of 2.5% with a 3.1% Increase in Comparable Transactions

Raises Midpoint of Fiscal 2023 Guidance

PHILADELPHIA, PA , Nov. 29, 2023 (GLOBE NEWSWIRE) -- Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the third quarter and year to date period ended October 28, 2023.

For the third quarter ended October 28, 2023:

  • Net sales increased by 14.2% to $736.4 million from $645.0 million in the third quarter of fiscal 2022; comparable sales increased by 2.5% versus the third quarter of fiscal 2022.
  • The Company opened 74 new stores and ended the quarter with 1,481 stores in 43 states. This represents an increase in stores of 14.6% from the end of the third quarter of fiscal 2022.
  • Operating income was $16.1 million compared to $20.9 million in the third quarter of fiscal 2022.
  • The effective tax rate was 25.4% compared to 24.6% in the third quarter of fiscal 2022.
  • Net income was $14.6 million compared to $16.1 million in the third quarter of fiscal 2022.
  • Diluted income per common share was $0.26 compared to $0.29 in the third quarter of fiscal 2022.
  • The Company repurchased approximately 500,000 shares in the third quarter of fiscal 2023 at a cost of approximately $80.0 million.

Joel Anderson, President and CEO of Five Below, said, "We are very pleased with our results and operational execution in the third quarter. We exceeded our guidance for sales, comparable sales and EPS, as our value offering resonated with customers and we effectively capitalized on multiple trends. We opened a record 74 new stores in the third quarter and are on track to open over 200 new stores for the year. We have also successfully converted over 400 stores to our new Five Beyond format, ending the third quarter with approximately 50% of our comparable store base in this format."

Mr. Anderson continued, "We entered the all-important holiday quarter ready to Wow our customers with an outstanding assortment of gifts and stocking stuffers at incredible value. We are well-positioned to execute this holiday season and deliver on our goals for the year."

For the year to date period ended October 28, 2023:

  • Net sales increased by 13.7% to $2.22 billion from $1.95 billion in the year to date period of fiscal 2022; comparable sales increased by 2.6% versus the year to date period of fiscal 2022.
  • The Company opened 141 new stores compared to 102 new stores in the year to date period of fiscal 2022.
  • Operating income was $117.1 million compared to $119.3 million in the year to date period of fiscal 2022.
  • The effective tax rate was 23.1% compared to 24.6% in the year to date period of fiscal 2022.
  • Net income was $98.9 million compared to $90.2 million in the year to date period of fiscal 2022.
  • Diluted income per common share was $1.78 compared to $1.62 in the year to date period of fiscal 2022. The benefit from share-based accounting was approximately $0.07 in the year to date period of fiscal 2023 compared to approximately $0.03 in the year to date period of fiscal 2022.

Fourth Quarter and Fiscal 2023 Outlook:
The Company expects the following results for the fourth quarter and full year fiscal 2023:

For the fourth quarter of Fiscal 2023:

  • Net sales are expected to be in the range of $1.32 billion to $1.35 billion based on opening over 60 new stores and assuming an approximate 2% to 3% increase in comparable sales.
  • Net income is expected to be in the range of $201 million to $211 million.
  • Diluted income per common share is expected to be in the range of $3.64 to $3.80 on approximately 55.4 million diluted weighted average shares outstanding.

For the full year of Fiscal 2023:

  • Net sales are expected to be in the range of $3.54 billion to $3.57 billion based on opening over 200 new stores and assuming an approximate 2.5% increase in comparable sales.
  • Net income is expected to be in the range of $300 million to $310 million.
  • Diluted income per common share is expected to be in the range of $5.40 to $5.56 on approximately 55.6 million diluted weighted average shares outstanding.
  • The 53rd week is expected to contribute approximately $40 million in sales and approximately $0.08 in diluted income per common share.
  • Gross capital expenditures are expected to be approximately $335 million in fiscal 2023.

Share Repurchase Program:
On November 27, 2023, the Company announced that the Board of Directors retired the Company’s current share repurchase program and approved a new share repurchase program authorizing the repurchase of up to $100 million of the Company’s common shares through November 27, 2026. The number of common shares actually repurchased, and the timing and price of repurchases, will depend upon market conditions, Securities and Exchange Commission requirements, and other factors. Shares may be repurchased from time to time on the open market, in privately negotiated transactions, or otherwise. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.

Conference Call Information:

A conference call to discuss the financial results for the third quarter and year to date period of fiscal 2023 is scheduled for today, November 29, 2023, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 412-902-6753 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, where a replay will be available shortly after the conclusion of 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, store count potential 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 related to disruption to the global supply chain, risks related to the Company's strategy and expansion plans, risks related to disruptions in our information technology systems and our ability to maintain and upgrade those systems, risks related to the inability to successfully implement our online retail operations, risks related to cyberattacks or other cyber incidents, 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, the availability of suitable new store locations and the dependence on the volume of traffic to our stores, risks related to changes in consumer preferences and economic conditions, risks related to increased operating costs, including wage rates, risks related to inflation and increasing commodity prices, risks related to potential systematic failure of the banking system in the United States or globally, risks related to extreme weather, pandemic outbreaks, global political events, war, terrorism or civil unrest (including any resulting store closures, damage, or loss of inventory), 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 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 current 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 believe life is better when customers are free to "let go & have fun" in an amazing experience filled with unlimited possibilities. With most items priced between $1 and $5, and some extreme value items priced beyond $5 in our incredible Five Beyond offering, Five Below makes it easy to say YES! to the newest, coolest stuff across eight awesome Five Below worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now. Founded in 2002 and headquartered in Philadelphia, Pennsylvania, Five Below today has over 1,500 stores in 43 states. For more information, please visit www.fivebelow.com or find Five Below on Instagram, TikTok, X and Facebook @FiveBelow.

Investor Contact:
Five Below, Inc.
Christiane Pelz
Vice President, Investor Relations & Treasury
215-207-2658
InvestorRelations@fivebelow.com


FIVE BELOW, INC.
Consolidated Balance Sheets
(Unaudited)
(in thousands)
 
  October 28, 2023   January 28, 2023   October 29, 2022
Assets          
Current assets:          
Cash and cash equivalents $ 162,928     $ 332,324     $ 44,229  
Short-term investment securities         66,845       72,722  
Inventories   763,349       527,720       701,561  
Prepaid income taxes and tax receivable   23,906       8,898       25,389  
Prepaid expenses and other current assets   140,816       130,592       113,147  
Total current assets   1,090,999       1,066,379       957,048  
Property and equipment, net   1,075,275       925,530       880,469  
Operating lease assets   1,475,095       1,319,132       1,312,437  
Other assets   16,069       13,870       13,761  
  $ 3,657,438     $ 3,324,911     $ 3,163,715  
           
Liabilities and Shareholders’ Equity          
Current liabilities:          
Line of credit $     $     $  
Accounts payable   349,340       221,120       279,836  
Income taxes payable         19,928        
Accrued salaries and wages   19,357       25,420       14,140  
Other accrued expenses   158,272       136,316       152,260  
Operating lease liabilities   231,197       199,776       193,614  
Total current liabilities   758,166       602,560       639,850  
Other long-term liabilities   4,625       4,296       4,307  
Long-term operating lease liabilities   1,455,358       1,296,975       1,293,692  
Deferred income taxes   61,364       59,151       41,378  
Total liabilities   2,279,513       1,962,982       1,979,227  
Shareholders’ equity:          
Common stock   551       555       555  
Additional paid-in capital   177,877       260,784       254,663  
Retained earnings   1,199,497       1,100,590       929,270  
Total shareholders’ equity   1,377,925       1,361,929       1,184,488  
  $ 3,657,438     $ 3,324,911     $ 3,163,715  




FIVE BELOW, INC.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
 
  Thirteen Weeks Ended   Thirty-Nine Weeks Ended
  October 28, 2023   October 29, 2022   October 28, 2023   October 29, 2022
Net sales $ 736,405     $ 645,034     $ 2,221,633     $ 1,953,557  
Cost of goods sold   513,577       437,226       1,499,422       1,310,463  
Gross profit   222,828       207,808       722,211       643,094  
Selling, general and administrative expenses   206,705       186,874       605,082       523,820  
Operating income   16,123       20,934       117,129       119,274  
Interest income and other income   3,434       483       11,423       341  
Income before income taxes   19,557       21,417       128,552       119,615  
Income tax expense   4,963       5,271       29,645       29,407  
Net income $ 14,594     $ 16,146     $ 98,907     $ 90,208  
Basic income per common share $ 0.26     $ 0.29     $ 1.78     $ 1.62  
Diluted income per common share $ 0.26     $ 0.29     $ 1.78     $ 1.62  
Weighted average shares outstanding:              
Basic shares   55,452,533       55,509,525       55,592,536       55,551,382  
Diluted shares   55,576,140       55,683,609       55,717,987       55,720,792  



FIVE BELOW, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
 
  Thirty-Nine Weeks Ended
  October 28, 2023   October 29, 2022
Operating activities:      
Net income $ 98,907     $ 90,208  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
Depreciation and amortization   93,652       76,698  
Share-based compensation expense   13,366       18,117  
Deferred income tax expense   2,213       5,222  
Other non-cash expenses   172       364  
Changes in operating assets and liabilities:      
Inventories   (235,629 )     (246,457 )
Prepaid income taxes and tax receivable   (15,008 )     (14,064 )
Prepaid expenses and other assets   (12,530 )     (21,787 )
Accounts payable   123,374       79,046  
Income taxes payable   (19,928 )     (28,096 )
Accrued salaries and wages   (6,063 )     (39,399 )
Operating leases   33,841       27,271  
Other accrued expenses   15,521       7,895  
Net cash provided by (used in) operating activities   91,888       (44,982 )
Investing activities:      
Purchases of investment securities and other investments   (128,950 )     (31,815 )
Sales, maturities, and redemptions of investment securities   195,795       273,951  
Capital expenditures   (231,921 )     (173,589 )
Net cash (used in) provided by investing activities   (165,076 )     68,547  
Financing activities:      
Cash paid for Revolving Credit Facility financing costs         (248 )
Net proceeds from issuance of common stock   440       464  
Repurchase and retirement of common stock   (80,541 )     (40,007 )
Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units   288       111  
Common shares withheld for taxes   (16,395 )     (4,629 )
Net cash used in financing activities   (96,208 )     (44,309 )
Net decrease in cash and cash equivalents   (169,396 )     (20,744 )
Cash and cash equivalents at beginning of period   332,324       64,973  
Cash and cash equivalents at end of period $ 162,928     $ 44,229  

 


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