✍ 30 May, 2023 - 14:02
- Telsey Advisory Group analyst Joseph Feldman reiterated an Outperform rating on the shares of Five Below Inc (NASDAQ:FIVE) and lowered the price target from $230 to $225.
- Five Below will report earnings after the markets close on Thursday, June 1.
- The analyst maintained 1Q23 EPS estimate of $0.65 versus the FactSet consensus (FS) of $0.63 and a total sales growth of 14.5% to $732 million, with a comparable sale of 3.5%.
- Based on comments from multiple retailers, including Target Corp (NYSE:TGT) and Walmart Inc (NYSE:WMT), the analyst believes that May trends were slower across retail, and the consumer spending environment is likely to remain tight in 2H23.
- In 2023, Five Below should continue to benefit from the opening of about 200 new stores, converting 400 stores to the new Five Beyond prototype, said the analyst.
- It will also gain from increasing the number of Five Beyond SKUs, expanding closeout items across all categories, and enhancing digital and supply chain capabilities, added the analyst.
- The analyst continues to believe that the company has a long runway of growth ahead as it progresses on its Triple-Double strategy and the promotion of CFO Ken Bull to the newly created role of COO should help with the execution of the strategy.
- Overall, the analyst thinks Five Below should benefit from the strength in consumables, select value-focused discretionary products, and trend categories.
- Price Action: FIVE shares are trading lower by 2.53% at $172.78 on the last check Tuesday.
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