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Five Below (FIVE) Announces CEO Departure, Trims Q2 Outlook
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Shares of Five Below, Inc. (FIVE - Free Report) witnessed a sharp fall of 10.1% during the after-market trading session on Jul 16. The news of the chief executive officer stepping down and the trimming of the second-quarter fiscal 2024 view due to the cautious consumer spending environment was not well perceived by investors.
This trend-right, high-quality, extreme-value retailer for tweens, teens and beyond announced the departure of Joel Anderson from his roles as the president and chief executive officer, as well as from the board of directors, to pursue other interests. Kenneth Bull, the chief operating officer, has been appointed as the interim president and chief executive officer with immediate effect.
Thomas Vellios, the co-founder and former chief executive officer, has assumed the role of the interim executive chairman to oversee a seamless transition in leadership, while the board actively searches for a permanent chief executive officer.
These leadership changes come at a challenging time for Five Below. The company faces evolving consumer behavior and economic headwinds, compounded by operational complexities. Inflationary pressures have shifted consumer spending toward essential items, impacting discretionary purchases such as those offered by Five Below, which primarily serves price-sensitive demographics, including lower-income consumers.
Image Source: Zacks Investment Research
The recent financial performance reflects these challenges. Five Below’s comparable sales for the 10 weeks ended Jul 13, 2024 decreased 5% versus the restated and comparable period ended Jul 15, 2023. Total sales in the said period rose 9.5% year over year.
In response to these results, Five Below has revised its second-quarter guidance and now expects comparable sales to decrease between 6% and 7%. The company now forecasts sales in the range of $820 million-$826 million, which is below the current Zacks Consensus Estimate of $835.4 million. The company had earlier guided a mid-single-digit decline in comparable sales and net sales between $830 million and $850 million.
Earnings expectations have also been adjusted downward, with anticipated earnings per share now in the range of 53 cents-56 cents, down from the previous range of 57 cents-69 cents. Analysts are likely to revise their estimates in light of these developments, with the current Zacks Consensus Estimate standing at 62 cents per share.
The combination of economic pressures and a revised financial outlook underscores the complexity of the current landscape for Five Below. Shares of this Zacks Rank #5 (Strong Sell) company have fallen 32.8% in the past three months against the industry’s rise of 3.5%.
3 Picks You Can’t Miss Out On
Here, we have highlighted three better-ranked stocks, namely Burlington Stores (BURL - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Ross Stores (ROST - Free Report) .
Burlington Stores is a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories and merchandise for the home at everyday low prices. BURL has a trailing four-quarter earnings surprise of 21.7%, on average. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and earnings suggests growth of 9.5% and 25.4%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently sports a Zacks Rank #1. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings implies growth of around 8% and 12%, respectively, from the year-ago reported numbers.
Ross Stores, one of the largest off-price apparel and home fashion chains, currently carries a Zacks Rank #2 (Buy). ROST has a trailing four-quarter earnings surprise of 10.6%, on average.
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings calls for growth of around 4.1% and 7.4%, respectively, from the year-ago reported numbers.
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Five Below (FIVE) Announces CEO Departure, Trims Q2 Outlook
Shares of Five Below, Inc. (FIVE - Free Report) witnessed a sharp fall of 10.1% during the after-market trading session on Jul 16. The news of the chief executive officer stepping down and the trimming of the second-quarter fiscal 2024 view due to the cautious consumer spending environment was not well perceived by investors.
This trend-right, high-quality, extreme-value retailer for tweens, teens and beyond announced the departure of Joel Anderson from his roles as the president and chief executive officer, as well as from the board of directors, to pursue other interests. Kenneth Bull, the chief operating officer, has been appointed as the interim president and chief executive officer with immediate effect.
Thomas Vellios, the co-founder and former chief executive officer, has assumed the role of the interim executive chairman to oversee a seamless transition in leadership, while the board actively searches for a permanent chief executive officer.
These leadership changes come at a challenging time for Five Below. The company faces evolving consumer behavior and economic headwinds, compounded by operational complexities. Inflationary pressures have shifted consumer spending toward essential items, impacting discretionary purchases such as those offered by Five Below, which primarily serves price-sensitive demographics, including lower-income consumers.
Image Source: Zacks Investment Research
The recent financial performance reflects these challenges. Five Below’s comparable sales for the 10 weeks ended Jul 13, 2024 decreased 5% versus the restated and comparable period ended Jul 15, 2023. Total sales in the said period rose 9.5% year over year.
In response to these results, Five Below has revised its second-quarter guidance and now expects comparable sales to decrease between 6% and 7%. The company now forecasts sales in the range of $820 million-$826 million, which is below the current Zacks Consensus Estimate of $835.4 million. The company had earlier guided a mid-single-digit decline in comparable sales and net sales between $830 million and $850 million.
Earnings expectations have also been adjusted downward, with anticipated earnings per share now in the range of 53 cents-56 cents, down from the previous range of 57 cents-69 cents. Analysts are likely to revise their estimates in light of these developments, with the current Zacks Consensus Estimate standing at 62 cents per share.
The combination of economic pressures and a revised financial outlook underscores the complexity of the current landscape for Five Below. Shares of this Zacks Rank #5 (Strong Sell) company have fallen 32.8% in the past three months against the industry’s rise of 3.5%.
3 Picks You Can’t Miss Out On
Here, we have highlighted three better-ranked stocks, namely Burlington Stores (BURL - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Ross Stores (ROST - Free Report) .
Burlington Stores is a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories and merchandise for the home at everyday low prices. BURL has a trailing four-quarter earnings surprise of 21.7%, on average. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and earnings suggests growth of 9.5% and 25.4%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently sports a Zacks Rank #1. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings implies growth of around 8% and 12%, respectively, from the year-ago reported numbers.
Ross Stores, one of the largest off-price apparel and home fashion chains, currently carries a Zacks Rank #2 (Buy). ROST has a trailing four-quarter earnings surprise of 10.6%, on average.
The Zacks Consensus Estimate for Ross Stores’ current financial-year sales and earnings calls for growth of around 4.1% and 7.4%, respectively, from the year-ago reported numbers.