On November 29, 2023, Five Below Inc (FIVE, Financial) released its 8-K filing, announcing its financial results for the third quarter and year to date period ended October 28, 2023. The company reported a robust increase in net sales and a steady rise in comparable sales, despite a slight dip in net income compared to the same quarter last year.
Financial Highlights
Five Below Inc (FIVE, Financial) demonstrated solid growth in the third quarter with net sales reaching $736.4 million, up 14.2% from $645.0 million in the third quarter of fiscal 2022. The company's comparable sales also saw an uptick of 2.5% against the previous year's quarter. This growth was partially attributed to a 3.1% increase in comparable transactions. The company's aggressive expansion strategy was evident as it opened 74 new stores during the quarter, expanding its footprint to 1,481 stores across 43 states, marking a 14.6% increase in store count from the end of the third quarter of fiscal 2022.
However, operating income for Q3 was reported at $16.1 million, a decrease from $20.9 million in the third quarter of fiscal 2022. The effective tax rate saw a slight increase to 25.4%, up from 24.6% in the same quarter of the previous year. Net income for the quarter was $14.6 million, down from $16.1 million in Q3 of fiscal 2022, and diluted income per common share was $0.26, compared to $0.29 in the prior year's quarter. Additionally, Five Below Inc (FIVE, Financial) repurchased approximately 500,000 shares at a cost of around $80.0 million during the quarter.
Year to Date Performance
For the year to date period ended October 28, 2023, Five Below Inc (FIVE, Financial) reported a net sales increase of 13.7% to $2.22 billion, up from $1.95 billion in the same period of fiscal 2022. Comparable sales for the year to date increased by 2.6%. The company opened 141 new stores, compared to 102 new stores in the year to date period of fiscal 2022. Operating income for the year to date was $117.1 million, slightly lower than $119.3 million in the prior year. The effective tax rate improved to 23.1%, down from 24.6%. Net income for the year to date period was $98.9 million, an increase from $90.2 million, and diluted income per common share was $1.78, up from $1.62, benefiting from share-based accounting adjustments.
Outlook for Fiscal 2023
Looking ahead, Five Below Inc (FIVE, Financial) has raised its guidance for the fiscal year 2023. The company expects net sales for the fourth quarter to be between $1.32 billion and $1.35 billion, with net income projected to range from $201 million to $211 million. Diluted income per common share is anticipated to be between $3.64 and $3.80. For the full fiscal year, net sales are forecasted to be between $3.54 billion and $3.57 billion, with net income expected to be in the range of $300 million to $310 million. Diluted income per common share is estimated to be between $5.40 and $5.56. The company also announced a new share repurchase program authorizing the repurchase of up to $100 million of its common shares through November 27, 2026.
Joel Anderson, President and CEO of Five Below, expressed satisfaction with the company's performance and operational execution, highlighting the successful opening of new stores and the conversion of over 400 stores to the new Five Beyond format. Anderson remains confident in the company's positioning for the holiday season and its ability to achieve its goals for the year.
Five Below Inc (FIVE, Financial) continues to navigate a dynamic retail environment, balancing expansion with strategic investments and share repurchases. Investors and analysts interested in the detailed financials can access the full earnings report and listen to the conference call on the company's investor relations website.
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Explore the complete 8-K earnings release (here) from Five Below Inc for further details.
