Five Below, Inc. FIVE is likely to register an increase in the top line when it reports third-quarter fiscal 2023 results on Nov 29 after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $726 million, suggesting an improvement of 12.6% from the prior-year reported figure.
Over the past 30 days, the Zacks Consensus Estimate for third-quarter earnings per share has increased by a penny to 23 cents. The figure implies a decline of 20.7% from the prior-year quarter.
This extreme-value retailer for tweens, teens and beyond has a trailing four-quarter earnings surprise of 29.2%, on average. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by a margin of 1.2%.
Five Below, Inc. Price, Consensus and EPS Surprise
Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote
Factors to Consider
Five Below's emphasis on offering current and in-demand products, enhancing supply-chain efficiency, bolstering digital infrastructure and expanding physical store presence positions it for success. Known for its diverse product portfolio, Five Below comfortably adapts to evolving consumer preferences. These attributes, coupled with the pricing strategy, enable the company to cater to demographic shoppers and resonate with value-seeking customers.
We believe the higher penetration of Five Beyond and the e-commerce business, new customer acquisitions, the sales lift from remodels and conversions and selective merchandise price increases to counter inflation are likely to have favorably impacted the company’s sales. We expect third-quarter comparable sales to be up 1%.
Five Below had earlier guided third-quarter fiscal 2023 net sales in the band of $715 million-$730 million, with comparable sales anticipated to be flat to up 2%. Management had earlier guided third-quarter earnings between 17 cents and 25 cents per share, down from 29 cents reported in the year-ago period.
The company anticipates a significant impact on third-quarter earnings due to higher-than-expected shrink levels. This is attributed to negative trends seen across the industry, prompting Five Below to increase its shrink reserve for the balance of the year. The impact is expected to be pronounced in the third quarter, with efforts underway to mitigate the increased expense.
Five Below guided an operating margin between 1.4% and 2.1% for the third quarter. The approximate 150 basis points of deleverage at the midpoint are primarily attributed to the anticipated shrink headwind. We expect a contraction of 140 basis points in the operating margin.
What the Zacks Model Unveils
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 +3.68% 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 More Stocks With the Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Ollie's Bargain Outlet Holdings OLLI currently has an Earnings ESP of +3.75% and a Zacks Rank #2. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 43 cents suggests an increase from 37 cents reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ollie's Bargain’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $468.8 million, which indicates a rise of 12.1% from the figure reported in the prior-year quarter. Ollie's Bargain has a trailing four-quarter earnings surprise of 1.3%, on average.
Costco COST currently has an Earnings ESP of +3.00% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.43 suggests a rise of 10.7% from the year-ago reported number.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $57.69 billion, which calls for an increase of 6% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
lululemon athletica LULU currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.27 suggests an increase from $2.00 reported in the year-ago quarter.
lululemon’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.19 billion, which indicates a rise of 17.8% from the figure reported in the prior-year quarter. lululemon has a trailing four-quarter earnings surprise of 6.8%, on average.
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