A discount retailer announced its fourth-quarter and full-year earnings results Wednesday before the market open. Also included in the earnings report: new plans to rapidly accelerate the company’s store count.
What Happened: Retailer Five Below Inc (NASDAQ: FIVE) announced fourth-quarter sales of $996.3 million, up 16% year-over-year. For the full fiscal year, net sales for Five Below were $2.8 billion, up 45% year-over-year.
Along with earnings, Five Below announced plans to rapidly expand its store count.
Five Below’s new “triple-double” growth plan calls for the company to triple its store count to over 3,500 stores by the end of fiscal 2030 and double company sales and earnings per share by fiscal 2025.
To get to its goal of hitting 3,500 stores, the company plans to add over 1,000 stores in the next three fiscal years, including 375 to 400 in fiscal 2022 and fiscal 2023 combined and 550 to 600 stores in fiscal 2024 and fiscal 2025 combined.
“We are increasing our store potential in the U.S. from 2,500+ to 3,500+, or triple our current store count,” Five Below CEO Joel Anderson said.
Five Below opened 17 new stores in the fourth quarter and a total of 170 stores in fiscal 2021. This marked growth from the 120 stores that were opened in fiscal 2020. The company ended the fiscal year with 1,190 stores in 40 states.
Guidance calls for the company to open 35 stores in the first quarter. Guidance for fiscal 2022 calls for Five Below to open 160 new stores in fiscal 2022.
Related Link: What's In A Name? Dollar Store Model Shifting For These 2 Retailers
Why It’s Important: Five Below announced guidance for the fiscal 2022 year. The company expects first-quarter sales to come in a range of $644 million to $658 million.
“Looking ahead to 2022, we will continue to play offense and focus on innovation and experience as we navigate a dynamic macro environment related to the lingering impacts of the pandemic,” Anderson said.
The company also said it plans to double its sales and “more than double” earnings per share through 2025.
Five Below’s new aggressive store opening plans come as the company is also pushing forward with a plan to carry items that are sold for more than $5 in stores. While this breaks from the company’s name and previous model, it can bring new categories and products along with higher margins to Five Below.
“We are confident that our Wow assortment, the flexibility of our unique model with eight worlds and our new Five Beyond offering continue to serve us well as we drive sustainable long-term growth and realize our 2,500-plus store potential in the U.S.,” Anderson previously said.
Anderson said Wednesday that the company remains excited to grow the Beyond store prototype and expand categories.
FIVE Price Action: Five Below shares are down 5% to $162.50 on Wednesday, according to Benzinga Pro.
Courtesy photo.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga