Five Below shares are trading lower after-hours: here’s why

Five Below Inc (NASDAQ: FIVE) said on Wednesday its earnings jumped more than 100% in the fiscal second quarter. Shares of the company, however, fell more than 10% in extended trading as investors focused on sales that missed estimates.

Q2 financial performance

Five Below reported $64.8 million of earnings and $646.6 million in sales for the second quarter. On a per-share basis, it earned $1.15. In comparison, it had posted 53 cents of EPS on $426.1 million in sales last year.

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The discount store company noted a 39.2% annualised growth in comparable sales. According to FactSet, experts had forecast $1.11 of EPS on $658 million in sales with an over 36% increase in same-store sales.

Other notable figures and future outlook

Five Below opened 34 new stores in the recent quarter. It now has a network of 1,121 stores in total, spanned over 39 states, representing a 14.2% increase in stores from Q2 of 2020. The U.S. firm’s financial performance was significantly better than the 2019 equivalent.

For the current quarter, Five Below forecasts up to 30 cents of per-share earnings on $550 million to $565 million in sales, which is roughly in line with analysts’ 27 cents of EPS on $550 million in sales call, as per the earnings press release.

CEO Joel Anderson’s remarks

Commenting on the financial update, CEO Joel Anderson said:

“Q3 is off to a strong start from a sales perspective. We are innovating across our three key strategic priorities: product, experience and supply chain. We are confident that our Wow assortment, the flexibility of our unique model with eight worlds and our new Five Beyond offering, will continue to serve us well as we drive sustainable long-term growth and realise our 2,500-plus store potential in the U.S.”