FIVE Earnings: Five Below Sinks 12% on Weak Earnings, Guidance

Shares of Five Below (NASDAQ:FIVE) sank in after-hours trading after reporting fourth-quarter earnings that didn’t meet expectations. The discount retailer posted a 2.8% increase in comparable sales, falling short of analyst predictions. In addition, earnings per share of $3.65 missed analysts’ consensus estimate of $3.78.

The CEO highlighted that while strong sales positively impacted profitability, unexpected shrink (loss of inventory) pushed earnings to the lower end of their guidance. As a result, the company is taking measures to reduce shrinkage.

For the upcoming fiscal year, the retailer anticipates comparable sales growth ranging from 0% to 3%, below the 2.2% consensus, and forecasts an EPS between $5.71 and $6.22. For reference, analysts were expecting an EPS of $6.48.

Is FIVE Stock a Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on FIVE stock based on 12 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 4.7% increase in its share price over the past year, the average FIVE price target of $219.47 per share implies 5% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.