A marked uptick in comparable store sales and new store openings pushed up earnings of discount store operator Five Below (FIVE) in the third quarter. The results also came in above analysts’ forecast.
Net profit increased to $13.5 million or $0.24 per share in the October quarter from $9.9 million or $0.18 per share a year earlier. During the three-month period, sales surged 22% to $313 million. Same-store sales were higher by 4.8% compared to last year.
The results, which benefitted from an additional week in the latest quarter, came in above analysts’ forecast. They also matched the guidance provided by the management.
The Philadelphia-based discount retailer opened 53 new stores and ended the third quarter with 745 stores, representing a 19% increase year-over-year.
“Continued robust performance from new stores, with a record 53 openings during the quarter, and above-plan comp results were driven by a positive customer response to our compelling assortment of trend-right products across our worlds,” said CEO Joel Anderson.
Looking ahead, the company expects sales to be in the range of $593 million to $600 million in the fourth quarter when it plans to open around five new stores. Comparable store sales are forecast to grow in the 3-4% range, while earnings per share are predicted to be between $1.53 and $1.57.
Buoyed by the strong third-quarter results, the management raised its full-year earnings outlook to the range of $2.60 per share to $2.64 per share on revenues of $1.550 billion-$1.557 billion. Comparable sales are estimated to grow between 3.3% and 3.7% during the fiscal year, when the company intends to open 125 new stores.
Shares of Five Below traded sharply lower throughout Wednesday’s regular session, after gaining 45% since the beginning of the year.
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