Five Below Inc. (FIVE) announced strong financial results for the first quarter and offered better-than-expected outlook for the second quarter, sending its shares up more than 17 percent in the pre-market trading session on Thursday. The company’s shares have already been up about 23 percent so far this year.
The Philadelphia, Pennsylvania-based chain of discount stores posted net income of $21.8 million, or 39 cents per share for the three-month period ended May 5, well above $8.4 million, or 15 cents per share in the same period last year. Analysts surveyed by FactSet had forecasted earnings of 34 cents per share.
Revenue for the quarter came in at $296.3 million, up from $232.9 million in the comparable quarter last year, and above consensus forecast of $290.9 million.
Chief Executive Officer Joel Anderson said the company is very pleased with the solid start to the fiscal year 2018, as it delivered both profit and revenue above its own estimates for the first quarter. Consistent out-performance from new stores, strong comparable sales and healthy gross margins resulted in an increase of more than two-fold in profit, he added.
Anderson further said that Five Below is making disciplined investments to back the future growth and is happy to announce its plans to build a distribution center that will be located south of Atlanta and will offer the capacity and flexibility as the company continue to expand in the Southeast.
Looking forward, Five Below expects profit in the range of 36 cents per share to 38 cents per share and revenue in between $332 million and $335 million for the second quarter. Analysts on average were looking for earnings of 34 cents on $327 million in revenue.