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Five Below Inc - Stock Quote FIVE

Rating as of

Morningstar's Five Below Inc Stock Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Is it the right time to buy or sell?

1-Star Price

INVESTOR

5-Star Price

INVESTOR

Economic Moat

INVESTOR

Capital Allocation

INVESTOR

Difficult Comparison, Consumer Reticence Weigh on Five Below, but Its Shares Seem Attractive

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Considering its disappointing start to fiscal 2022 (including a 3.6% first-quarter comparable sales decline versus our 0.5% growth target), we plan to reduce our $149 valuation of no-moat Five Below’s shares by a mid- to high-single-digit percentage, in line with their dip in after-hours trading. Despite our reduced near-term expectations, our long-term forecast still assumes low-double-digit annual top-line growth rates and low-teens average operating margins. We believe market sentiment is overly fixated on a difficult near-term environment and does not adequately credit the long-term benefits of scale and a now-fully formed distribution network that should enable continued profitable store growth. Consequently, we see some opportunity for long-term investors willing to endure near-term volatility.

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Key Statistics - FIVE

Five Below Inc's Company Profile

Business Description

Five Below is a value-oriented retailer that operated 1,190 stores in the United States as of the end of fiscal 2021. Catering to teen and preteen consumers, stores feature a wide variety of merchandise, the vast majority of which is priced below $6. The assortment focuses on discretionary items in several categories, particularly leisure (such as sporting goods, toys, and electronics; 48% of fiscal 2021 sales), fashion and home (for example, beauty products and accessories, home goods, and storage solutions; 30% of fiscal 2021 sales), and party and snack (including seasonal goods, candy, and beverages; 22% of fiscal 2021 sales). The chain had stores in 40 states as of the end of fiscal 2021.

Contact
701 Market Street, Suite 300
Philadelphia, PA, 19106
T +1 215 546-7909
Industry Specialty Retail
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 28, 2023
Stock Type Cyclical
Employees 20,200