Five Below Stock Surges as Strong holiday sales power results, outlook

Key Takeaways

• Five Below says its strategy has boosted sales during this key holiday shopping period.
• The discount retailer beat earnings and sales expectations for the fourth quarter and provided a more optimistic outlook.
• Five Below plans on opening 150 new stores in 2015.

Five Below’s (FIVE) stock soared Thursday after the discount retailer reported better-than expected results. It also announced a rosy future, as its holiday sale strategy had paid off.

The company reported a fourth-quarter adjusted earning per share (EPS), which was $3.48. Net sales were up 4% over the previous year, to $1.39billion. Both exceeded Visible Alpha’s forecasts. Same-store sales decreased by 3%. This was less than expected. 

COO Ken Bull said that the company was successful in its plan to go into the holiday season "with the goal of showcasing more newness with key trend-right, value product, while also improving our operational execution and in-store experience."

Sales projections for FY 2018 are above estimates

The company’s sales are expected to range from $4.21billion to $4.33billion, with a midpoint that is higher than the forecast. Five Below is also looking to add 150 new stores this year.

Five Below shares have fallen more than 60% in the past year, despite today’s gain of about 6%.