Five Below's stock has been hurt by macroeconomic factors. The stores sell items from $1 to $5. The bright and colorful stores are filled with cheap entertainment products and toys for toddlers to teens. The Five Beyond concept is a store within a store that sells products for more than $5 but is less expensive than other stores. More than 250 prototype store-within-a-stores will be delivered by the company this year. The Company could lose its identity if it punches for higher prices for a demographic that used to pay low. Margins have been squeezed by inflation and costs. In order to avoid supply chain disruptions this holiday season, the Company has taken a big risk by stocking up on inventory levels which have ballooned to 64%. Five Below is trying to expand its customer base with the Five Beyond concept. They are punching too high.
MarketBeat.com - MarketBeat The Five Beyond concept is to sell items over $5, which can turn off loyal customers. In inflationary times, a higher income value-seeking demographic will look for items other than children's products. Five Beyond has been showing how similar their prices are to similar ones in other places. It seems almost too good to be true that a $10 coffee maker with a tumbler is more expensive than other retail locations. Either it's a brilliant idea or a dud that will turn off the discount shopper who can't afford to spend more and the bigger spenders who question the quality of the products.
The rifle charts give a precise view of the landscape for Five stock. The weekly rifle chart has tried to bottom out. The weekly 5-period moving average is testing at $122.07. The weekly lower bands are $94.29 It fell under the 20-band. As the daily 5-period MA crosses over through the 15-period MA, the daily rifle chart is trying to break out. There is a daily 50-period MA. The daily stochastic is moving. The upper and lowerBBs are $134.30 and $108.08, respectively. The $114.60 fib, $110.81 fib, $106.50 fib, $103.67 fib, and the $95.03 fib are some of the levels that Prudent investors can look out for. The $164.55fib level is the highest upside trajectory. Dollar General is a leading sympathy play.
Earnings were disappointing. Five Below released its results for the second quarter of its fiscal year on August 21st. Excluding non-recurring items, the Company reported an earnings-per-share profit of $0.74 which was $0.06 better than the analysts' estimate. Revenues rose to $668.93 million, missing estimates of $681.3 million. The Company's same store sales decline was worse than the analysts' estimates. A total of 1,252 stores are located in 40 states. "We delivered earnings per share within our guidance range despite lower than expected sales which we believe were largely driven by the impact of accelerated inflation on our customers' purchasing behavior." The updated second half outlook and year-to-date performance have prompted us to revise our guidance.
The Five Below issued a downside guidance for fiscal Q2 2022. The revenue is expected to come in between $675 million and $695 million. The same store sales were expected to fall. The company expects its full-year earnings to be in the $5 range. Revenues are expected to come in between $3.06 billion and $3.12 billion, which is in line with analyst estimates.
We remain focused on our long-term opportunities and Triple-Double goals, including opening 1000 new stores over the next several years and converting the majority of our chain to the Five Beyond concept. We are excited to open about 160 new stores this year and we are planning to open a record 200 stores next year. During the holidays, we believe it is more important than ever to provide our customers with fresh, new WOW products at extreme value. The future of the brand lies in growing top and bottom lines and expanding its customer base with Five Beyond store-within-a-stores.
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