Breaking News
0

Factors Likely To Shape Five Below's (FIVE) Earnings In Q2

By Zacks Investment ResearchStock MarketsAug 21, 2019 10:23PM ET
www.investing.com/analysis/factors-likely-to-shape-five-belows-five-earnings-in-q2-200457599
Factors Likely To Shape Five Below's (FIVE) Earnings In Q2
By Zacks Investment Research   |  Aug 21, 2019 10:23PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Five Below, Inc. (NASDAQ:FIVE) is scheduled to release second-quarter fiscal 2019 results on Aug 28, after the closing bell. In the trailing four quarters, the bottom line of this specialty value retailer has outperformed the Zacks Consensus Estimate by average of 6.7%. Let’s see how the company is positioned ahead of the upcoming quarterly results.

Estimates Look Bright

The Zacks Consensus Estimate for second-quarter earnings is pegged at 50 cents, indicating an increase of 19.1% from 42 cents reported in the year-ago quarter. Notably, the consensus mark has remained stable over the past 30 days.

For revenues, the consensus estimate stands at $422.5 million, suggesting a rise of about 21.5% from the year-ago quarter.

Five Below, Inc. Price, Consensus and EPS Surprise

Factors at Play

Five Below’s impressive merchandise assortment, focus on pre-teen customers, enhancement of digital and e-commerce channels, and pricing strategy aids it to stand tall amid a competitive retail landscape. These, along with healthy performance of new outlets and sturdy comparable store sales (comps) run is likely to help propel the top line in the impending quarter. Moreover, management anticipates net sales between $417 million and $422 million and comparable sales growth of 2-3% for the second quarter.

Further, Five Below is known for its impressive range of merchandise, as it remains committed toward making innovations and refreshing its product range per the evolving consumer trends. It also remains focused on achieving efficient cost structure, solid average net sales per store, supply-chain initiatives and economies of scale.

Apart from these, the company is also expanding its store base. It believes expanding scale helps it gain access to renowned shopping centers, capitalize on the emerging market trends and increase brand value. The company had earlier outlined its plan to open approximately 40 new stores in the second quarter. Together, these upsides might drive its performance in the quarter to be reported.

However, we note that SG&A expenses have been increasing for quite some time now. In the first quarter of fiscal 2019, the same increased 31.7% on account of store and corporate related expenses. Analysts believe that SG&A expenses are likely to rise in the near future due to store growth. Certainly, this will to an extent hurt the company's operating income, unless fully mitigated by substantial increase in net sales.

Moreover, Five Below expects operating margin to remain under pressure. The company had earlier guided second-quarter operating margin to shrink about 20 basis points.

What Our Model Says

Our proven model does not conclusively show that Five Below is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Five Below Earnings ESP of 0.00% combined with its Zacks Rank #4 (Sell) makes us apprehensive about an earnings beat. Markedly, we caution against sell-rated stocks (Zacks Rank #4 or 5) going into earnings announcement.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post earnings beat.

Casey's General Stores, Inc. (NASDAQ:CASY) has an Earnings ESP of +8.43% and a Zacks Rank #1.

Burlington Stores, Inc. (NYSE:BURL) has an Earnings ESP of +1.13% and a Zacks Rank #2.

Costco Wholesale Corporation (NASDAQ:COST) has an Earnings ESP of +0.30% and a Zacks Rank #3.

It’s Illegal in 42 States, But Investors Will Make Billions Legally

In addition to the companies you read about above, today you get details on the newly-legalized industry that’s tapping into a “habit” that Americans spend an estimated $150 billion on every year.

That’s twice as much as they spend on marijuana, legally or otherwise.

Zacks special report revealing how investors can profit from this new opportunity. As more states legalize this activity, the industry could expand by as much as 15X. Zacks’ has just released a Special Report revealing 5 top stocks to watch in this space.

See these 5 “sin stocks” now>>



Caseys General Stores, Inc. (CASY): Free Stock Analysis Report

Burlington Stores, Inc. (BURL): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

Five Below, Inc. (FIVE): Free Stock Analysis Report

Original post

Zacks Investment Research
Factors Likely To Shape Five Below's (FIVE) Earnings In Q2
 
Factors Likely To Shape Five Below's (FIVE) Earnings In Q2

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email