Why Five Below Inc Shares Flew Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of discount retailer Five Below Inc soared 15% today after its quarterly results and outlook impressed Wall Street.

So what: The stock had pulled back sharply in recent months on concerns about slowing growth, but today's Q4 results -- adjusted EPS of $0.47 on a sales jump of 22% -- coupled with upbeat full-year guidance, are quickly easing those worries. In fact, same-store sales during the quarter edged up 0.3%, while net margins expanded 60 basis points, to 11.7%, giving analysts plenty of good vibes about its competitive position going forward.


Now what: Management now sees full-year adjusted EPS of $0.86-$0.89 on revenue of $672 million-$678 million, versus Wall Street's view of $0.87 and $673.4 million, respectively. According to Co-Founder and CEO Thomas Vellios:

We are focused on building a solid infrastructure with our investments in people, technology and distribution. This will position our company to execute at the highest levels while solidifying our foundation for the substantial growth that lies ahead. As importantly, it will ensure that we continue to fulfill our promise to our customers as we scale the business.

More important, with Five Below shares still off more than 20% from their 52-week highs, and sporting a reasonable PEG under 1.5, there seems to be plenty of room left to buy into that bullishness. 

Six stock picks poised for incredible growth
They said it couldn't be done. But David Gardner has proved them wrong, time, and time, and time again, with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently, one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

The article Why Five Below Inc Shares Flew Today originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing in Startups

The lucrative and risky world of startups.

View Course »

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Add a Comment

*0 / 3000 Character Maximum