Five Below Reports Q2 2024 Earnings Provides Revised FullYear Guidance
Intellectia.AI Updated: 2024-08-28
Five Below Reports Q2 2024 Earnings, Provides Revised Full-Year Guidance
Philadelphia, PA, August 28, 2024 (GLOBE NEWSWIRE) - Five Below, Inc. (NASDAQ: FIVE) today announced its financial results for the second quarter and year-to-date period ended August 3, 2024.
Key Financial Metrics (Q2 2024):
| Financial Metric | Q2 2024 | Q2 2023 | YoY Change |
|---|---|---|---|
| Net Sales | $830.1M | $759.0M | +9.4% |
| GAAP Diluted EPS | $0.60 | $0.84 | -28.6% |
| Adjusted Diluted EPS | $0.54 | N/A | N/A |
| Operating Income | $41.5M | $58.6M | -29.2% |
| Adjusted Operating Income | $37.0M | N/A | N/A |
| Effective Tax Rate | 25.9% | 25.6% | +0.3% |
Professional Interpretation: Five Below saw a significant increase in net sales, up 9.4% year-over-year (YoY) to $830.1 million. However, the company's operating income and net income experienced declines. GAAP diluted earnings per share (EPS) dropped to $0.60 from $0.84 in the prior-year quarter. Adjustments resulting in non-GAAP (adjusted) metrics also presented reduced figures, with adjusted diluted EPS at $0.54. The company points to macroeconomic pressures and evolving consumer behaviors as reasons for the performance shortfall.
Revenue Performance by Segment:
| Segment | Q2 2024 Revenue | Previous Guidance | YoY Change |
|---|---|---|---|
| Net Sales ($M) | $830.1 | Not provided | +9.4% |
| Comparable Sales | -5.7% | Not provided | N/A |
Professional Interpretation: Five Below’s segments noted incremental revenue growth but faced declining comparable sales by 5.7%. The firm continues its emphasis on expanding store counts to drive top-line growth, opening 62 new stores in Q2 2024 alone.
Key Developments or Operational Highlights: - Opened 62 new stores, ending the quarter with 1,667 stores in 43 states. - Store count up by 18.5% from the second quarter of fiscal 2023. - Repurchased approximately 85,000 shares in Q2 2024 at a cost of $10.0 million. - Increased YoY net sales by 10.6%, reaching $1.64 billion year to date. - Additional 123 new stores year to date compared to 67 in the same period of the previous fiscal year. - Projected new store openings of 150 to 180 stores for 2025.
Senior Management Comments: Ken Bull, Interim CEO, President, and COO, commented on the Q2 results stating, “Our second quarter results fell short of what we know this business is capable of delivering. Despite macro pressures, we believe the issues are fixable by focusing on core customer engagement and value assortments. We are confident in our long-term store growth and brand potential, but plan to moderate our store expansion to focus on operational initiatives.”
Dividends and Share Repurchase Program: - No dividends have been announced. - The company repurchased around 85,000 shares in Q2 2024, costing approximately $10.0 million.
Forward Guidance: For Q3 2024: - Net sales forecasted between $780 million and $800 million. - Expected net loss between $2 million and $13 million, with adjusted net income between $5 million and $12 million. - Adjusted diluted income per common share expected to range from $0.10 to $0.22.
For Full-Year 2024: - Net sales expected to be between $3.73 billion and $3.80 billion. - Net income forecasted in the range of $220 million to $244 million, with adjusted net income between $241 million and $261 million. - Adjusted diluted income per common share anticipated to be between $4.35 and $4.71.
Stock Price Movement: Following the earnings release, Five Below’s stock price experienced a decline of 3.05%.
This Q2 2024 earnings report indicates that while Five Below continues to grow in terms of store count and total revenue, there are ongoing challenges affecting profitability and comparable store sales. Management is optimistic about addressing these issues with strategic initiatives, positioning the company for future growth.
