Five Below, Inc. FIVE is likely to register an increase in the top line when it reports third-quarter fiscal 2024 results on Dec. 4, after market close. The Zacks Consensus Estimate for revenues is pegged at $799.2 million, which indicates an improvement of 8.5% from the prior-year reported figure.
In the past 30 days, the Zacks Consensus Estimate for third-quarter earnings per share has increased a penny to 16 cents. The figure indicates a decline of 38.5% from the prior-year quarter.
Five Below has a trailing four-quarter earnings surprise of 1.6%, on average. In the last reported quarter, the company’s bottom line met the Zacks Consensus Estimate.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Five Below, Inc. Price, Consensus and EPS Surprise
Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote
Things to Consider Ahead of FIVE’s Upcoming Results
Five Below has been realigning the company’s strategy to better serve its core demographic of pre-teens and teens. By streamlining FIVE’s product assortment and reinforcing its signature $5 and below pricing strategy, the company has aimed to rebuild customer loyalty and strengthen its value-driven brand identity. This approach is likely to have enhanced customer engagement and supported sales growth.
Five Below has been actively working to reduce SKU counts to improve overall store performance and streamline operations. Additionally, the company has been simplifying store operations by reducing operational complexity and optimizing store labor, aiming to drive margin improvements and bolster profitability.
The company's focus on expanding its footprint into untapped or underserved markets provides an opportunity to attract new customers. As Five Below grows its store count strategically in high-traffic areas, this helps to capture incremental sales. Further, strengthened partnerships with vendors and a more streamlined supply chain enable Five Below to bring new and trending products to market faster.
Despite these concerted efforts, Five Below has been struggling with a decline in comparable sales, a key indicator of a retailer’s health. The metric dropped 5.7% in the second quarter of fiscal 2024, following a 2.3% decline in the first quarter. The decrease in the second quarter was due to a 5.4% reduction in transactions, coupled with a slight 0.3% dip in the average dollar value of transactions, as customers remained cautious with their discretionary spending. We foresee a comparable sales decline of 6% for the third quarter.
Five Below has been battling rising SG&A costs. These increases have been primarily caused by fixed cost deleverage, resulting from negative comparable sales, modest store labor investments and a small timing shift in marketing expenses. This is likely to have impacted the profitability. We anticipate SG&A expenses, as a percentage of net sales, to increase 290 basis points in the third quarter.
What the Zacks Model Unveils for FIVE
Our proven model predicts an earnings beat for Five Below this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Five Below has an Earnings ESP of +19.73% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
3 Other Stocks With the Favorable Combination
Here are some companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
Boot Barn Holdings, Inc. BOOT currently has an Earnings ESP of +0.20% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s bottom line is expected to increase year over year when it reports third-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for the quarter is pegged at $2.04 per share.
Boot Barn Holdings’ top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $594.2 million, which indicates an increase of 14.2% from the figure reported in the prior-year quarter. BOOT has a trailing four-quarter earnings surprise of 6.8%, on average.
Casey's General Stores CASY has an Earnings ESP of +1.50% and currently carries a Zacks Rank of 3. CASY’s top line is anticipated to decline year over year when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4 billion, which indicates 1.4% decline from the figure reported in the year-ago quarter.
The consensus estimate for Casey's second-quarter earnings per share has increased 1 cent in the past 30 days and is pegged at $4.24, flat year over year. CASY has a trailing four-quarter earnings surprise of 15.8%, on average.
Floor & Decor Holdings, Inc. FND currently has an Earnings ESP of +0.33% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter fiscal 2024 earnings per share is pegged at 25 cents, which implies 26.5% decline year over year.
The Zacks Consensus Estimate for Floor & Decor Holdings’ quarterly revenues is pegged at $1.1 billion, which indicates growth of 3.3% from the figure reported in the prior-year quarter. FND has a trailing four-quarter earnings surprise of 12.2%, on average.
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