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Five Below stocks drop on downbeat Q4 revenue

Shares of Five Below Inc. declined on Wednesday after its fiscal fourth-quarter revenue missed market estimates.

Accordingly, the American discount store closed 6.53% or 11.19 points lower to $160.20 per share.
Then, it followed this plunge with a drop of 0.06% or 0.10 points to $160.00 per share in the after-hours trading.

The company currently stands with a market capitalization of $8.98 billion with shares outstanding of 56.03 million.

Five Below reported that Q4 sales came at $996.30 million, below the analysts’ consensus of $1.01 billion.

Still, the figure represents a 16.00% increase from the previous $858.50 million in the same period last year.

However, the business’ long-term vision and strategic outlook failed to reverse the losses.

Five Below CEO Joel Anderson mentioned they presently navigate a dynamic macro environment related to the impact of the pandemic.

Meanwhile, comparable sales rose 3.40% compared to a time when stimulus check-loaded customers came flocking to stores.

Subsequently, the company opened 17 new stores in the quarter and had 1,190 stores in 40 states as of January 29. This flags a jump of 16.70% from the end of the fiscal Q4.

Five Below’s operating income climbed by 10.60% to $187.60 million, compared to the previous $169.60 million.

Consequently, net profit strengthened 13.10% and topped $140.20 million from the $123.90 million a year earlier.

Anderson emphasized that the company delivered sales growth in line with the expectations. This is against the difficult comparison to last year’s stimulus-fueled comparable sales.

Eventually, earnings edged up 13.20% to $2.49 per share, slightly higher than the expected $2.48. At the same time, it also surpassed the prior result of $2.20 per share.

Five Below to open 1000 new stores

Moreover, Five Below announced its plans to open 1,000 new stores in the next five years. In addition, the company targets to double its sales in the same period, a part of its long-term vision.

The firm has roughly 1,200 locations, and it sees an opportunity to add another 2,500 new stores by 2030.

The retail chain business has a heavy presence in New England, with 24 stores in Massachusetts. The latest growth push of the company reflects the enormous boom of discount stores.

The sector did not hold the impact of the rise of online shopping and other challenges of brick-and-mortar retailers.

Remarkably, three-dollar store chains accounted for almost half of all the new stores opened in the United States last year.

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