Discount retailer Five Below (NASDAQ: FIVE) will be reporting results tomorrow after market hours. Here’s what to look for.
Five Below beat analysts’ revenue expectations by 1% last quarter, reporting revenues of $1.39 billion, up 4% year on year. It was a mixed quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations but full-year EPS guidance missing analysts’ expectations significantly.
Is Five Below a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Five Below’s revenue to grow 18.1% year on year to $958.5 million, improving from the 11.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.83 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Five Below has missed Wall Street’s revenue estimates four times over the last two years.
Looking at Five Below’s peers in the discount retailer segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Ross Stores delivered year-on-year revenue growth of 2.6%, beating analysts’ expectations by 0.5%, and TJX reported revenues up 5.1%, topping estimates by 0.7%. Ross Stores traded down 9.8% following the results while TJX was also down 4%.
Read our full analysis of Ross Stores’s results here and TJX’s results here.
There has been positive sentiment among investors in the discount retailer segment, with share prices up 10.1% on average over the last month. Five Below is up 43.3% during the same time and is heading into earnings with an average analyst price target of $108.47 (compared to the current share price of $118.65).
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