On August 28, 2024, Five Below Inc (FIVE, Financial) released its 8-K filing detailing its financial results for the second quarter of fiscal 2024. Five Below Inc is a specialty value retailer offering merchandise targeted at the tween and teen demographic. The Company's edited assortment of products includes select brands and licensed merchandise.
Performance Overview
For the second quarter ended August 3, 2024, Five Below Inc reported net sales of $830.1 million, a 9.4% increase from $759.0 million in the same period last year. However, comparable sales decreased by 5.7%. The company opened 62 new stores, bringing the total to 1,667 stores across 43 states, an 18.5% increase from the previous year.
Financial Achievements and Challenges
Despite the increase in net sales, Five Below Inc faced several challenges. Operating income decreased to $41.5 million from $58.6 million in the second quarter of fiscal 2023. Adjusted operating income was $37.0 million. The effective tax rate was 25.9%, slightly higher than the 25.6% in the same period last year. Net income also declined to $33.0 million from $46.8 million, with adjusted net income at $29.7 million.
Ken Bull, Interim CEO, President, and COO of Five Below, commented, “Our second quarter results fell short of what we know this business is capable of delivering. Our response to the macro pressures of the last few years and the evolving consumer environment has required even greater execution, compelling and differentiated assortments and focus on the customer."
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $830.1 million | $759.0 million |
| Operating Income | $41.5 million | $58.6 million |
| Net Income | $33.0 million | $46.8 million |
| Diluted EPS | $0.60 | $0.84 |
Balance Sheet and Cash Flow
As of August 3, 2024, Five Below Inc reported cash and cash equivalents of $209.0 million, up from $179.7 million at the beginning of the period. The company’s total assets stood at $4.01 billion, with total liabilities at $2.41 billion. Shareholders' equity was $1.61 billion.
Outlook and Future Guidance
For the third quarter of fiscal 2024, Five Below Inc expects net sales to be in the range of $780 million to $800 million, with a mid-single digit decrease in comparable sales. The company anticipates a net loss between $2 million and $13 million, with adjusted net income ranging from $5 million to $12 million. Diluted loss per common share is expected to be between $0.04 and $0.24, with adjusted diluted income per common share between $0.10 and $0.22.
For the full year of fiscal 2024, the company projects net sales between $3.73 billion and $3.80 billion, with a 4% to 5.5% decrease in comparable sales. Net income is expected to range from $220 million to $244 million, with adjusted net income between $241 million and $261 million. Diluted income per common share is forecasted to be between $3.98 and $4.41, with adjusted diluted income per common share between $4.35 and $4.71.
Ken Bull added, "The good news is we believe the issues are fixable. We are refocused on delivering an edited assortment that leads with value and newness to wow our core pre-teen and teen customer, maximizing each of our worlds and offering a fun store experience that reflects our brand."
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Five Below Inc for further details.
