Five Below, Inc. Announces Fourth Quarter and Fiscal 2022 Financial Results
Q4 Net Sales Increase of 13% ; Q4 Comparable Sales Increase of 1.9% ; Q4 EPS Increase of 23% to $3.07
Philadelphia, PA — Five Below announced financial results for the fourth quarter and full year of fiscal 2022 ended January 28, 2023 and outlook for fiscal 2023.
For the fourth quarter ended January 28, 2023 :
- Net sales increased by 12.7% to $1,122.8 million from $996.3 million in the fourth quarter of fiscal 2021; comparable sales increased by 1.9% versus the fourth quarter of fiscal 2021.
- The Company opened 48 new stores and ended the quarter with 1,340 stores in 42 states. This represents an increase in stores of 12.6% from the end of the fourth quarter of fiscal 2021.
- Operating income was $225.8 million compared to $187.6 million in the fourth quarter of fiscal 2021.
- The effective tax rate was 24.8% compared to 25.1% in the fourth quarter of fiscal 2021.
- Net income was $171.3 million compared to $140.2 million in the fourth quarter of fiscal 2021.
- Diluted income per common share was $3.07 compared to $2.49 in the fourth quarter of fiscal 2021. The fourth quarter of fiscal 2022 included a $0.01 benefit from shared-based accounting.
Joel Anderson, President and CEO of Five Below, stated, “We are pleased to close out fiscal 2022 with fourth quarter results that demonstrate the relevancy, resiliency and flexibility of our model. Our Wow offering and Save the Holidays marketing campaign were particularly effective as customers contended with inflation and sought value. We are very proud of how our organization navigated the challenges of 2022 while simultaneously making progress on key initiatives that underpin our Triple-Double goals.”
Mr. Anderson continued, “In 2023, we will build on this progress. We begin the year with a healthy inventory position and a strong, debt-free balance sheet that enable us to continue to play offense, further elevate the customer experience and execute on our multi-year growth opportunity. We plan to open a record 200 new stores, convert 400 stores to the new Five Beyond format, roll out new categories and services and enhance marketing, all while leveraging data analytics and our five-node DC network to continue to deliver the Wow that is our customer promise.”
For the fiscal year ended January 28, 2023 :
- Net sales increased by 8.0% to $3,076.3 million from $2,848.4 million in fiscal 2021; comparable sales decreased by 2.0% versus fiscal 2021.
- The Company opened 150 new stores compared to 170 net new stores in fiscal 2021.
- Operating income was $345.0 million compared to $379.9 million in fiscal 2021.
- The effective tax rate was 24.7% compared to 24.0% in fiscal 2021.
- Net income was $261.5 million compared to $278.8 million in fiscal 2021.
- Diluted income per common share was $4.69 compared to $4.95 in fiscal 2021. The benefit from share-based accounting was approximately $0.04 in fiscal 2022 and approximately $0.06 in fiscal 2021.
- The Company repurchased 247,132 shares in fiscal 2022 at a cost of approximately $40.0 million.
First Quarter and Fiscal 2023 Outlook:
- The Company expects the following results for the first quarter and full year of fiscal 2023, which contains an additional, non-comparable week, or the “53rd week” in the fourth quarter. This guidance does not include the impact of share repurchases, if any.
For the first quarter of fiscal 2023:
- Net sales are expected to be in the range of $723 million to $735 million based on opening approximately 25 new stores and assuming an approximate 2.5% to 4% increase in comparable sales.
- Net income is expected to be in the range of $33 million to $37 million.
- Diluted income per common share is expected to be in the range of $0.59 to $0.65 on approximately 56.1 million diluted weighted average shares outstanding.
For the full year of fiscal 2023:
- Net sales are expected to be in the range of $3.49 billion to $3.59 billion based on opening 200 new stores and assuming an approximate 1% to 4% increase in comparable sales.
- Net income is expected to be in the range of $295 million to $323 million.
- Diluted income per common share is expected to be in the range of $5.25 to $5.76 on approximately 56.1 million diluted weighted average shares outstanding.
- The 53rd week is expected to contribute approximately $40 million in sales and approximately $0.08 in diluted income per common share.
- Gross capital expenditures are expected to be approximately $325 million in fiscal 2023.
About Five Below:
Five Below is a leading high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond. We believe life is better when customers are free to “let go & have fun” in an amazing experience filled with unlimited possibilities. With most items priced between $1 and $5, and some extreme value items priced beyond $5 in our incredible Five Beyond offering, Five Below makes it easy to say YES! to the newest, coolest stuff across eight awesome Five Below worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now. Founded in 2002 and headquartered in Philadelphia, Pennsylvania, Five Below today has over 1,340 stores in 43 states. For more information, please visit www.fivebelow.com or find Five Below on Instagram, TikTok, Twitter and Facebook @FiveBelow.FIVE BELOW, INC.
Consolidated Balance Sheets
(Unaudited)
(in thousands)
| January 28, 2023 | January 29, 2022 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 332,324 | $ | 64,973 | ||
| Short-term investment securities | 66,845 | 277,141 | ||||
| Inventories | 527,720 | 455,104 | ||||
| Prepaid income taxes and tax receivable | 8,898 | 11,325 | ||||
| Prepaid expenses and other current assets | 130,592 | 96,196 | ||||
| Total current assets | 1,066,379 | 904,739 | ||||
| Property and equipment, net | 925,530 | 777,497 | ||||
| Operating lease assets | 1,319,132 | 1,151,395 | ||||
| Long-term investment securities | — | 37,717 | ||||
| Other assets | 13,870 | 9,112 | ||||
| $ | 3,324,911 | $ | 2,880,460 | |||
| Liabilities and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Line of credit | $ | — | $ | — | ||
| Accounts payable | 221,120 | 196,461 | ||||
| Income taxes payable | 19,928 | 28,096 | ||||
| Accrued salaries and wages | 25,420 | 53,539 | ||||
| Other accrued expenses | 136,316 | 145,268 | ||||
| Operating lease liabilities | 199,776 | 163,537 | ||||
| Total current liabilities | 602,560 | 586,901 | ||||
| Other long-term liabilities | 4,296 | 1,663 | ||||
| Deferred income taxes | 59,151 | 36,156 | ||||
| Long-term operating lease liabilities | 1,296,975 | 1,135,456 | ||||
| Total liabilities | 1,962,982 | 1,760,176 | ||||
| Shareholders’ equity: | ||||||
| Common stock | 555 | 556 | ||||
| Additional paid-in capital | 260,784 | 280,666 | ||||
| Retained earnings | 1,100,590 | 839,062 | ||||
| Total shareholders’ equity | 1,361,929 | 1,120,284 | ||||
| $ | 3,324,911 | $ | 2,880,460 | |||
FIVE BELOW, INC.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
| Thirteen weeks ended | Fifty-two weeks ended | |||||||||||||
| January 28, 2023 | January 29, 2022 | January 28, 2023 | January 29, 2022 | |||||||||||
| Net sales | $ | 1,122,751 | $ | 996,332 | $ | 3,076,308 | $ | 2,848,354 | ||||||
| Cost of goods sold | 670,354 | 599,438 | 1,980,817 | 1,817,910 | ||||||||||
| Gross profit | 452,397 | 396,894 | 1,095,491 | 1,030,444 | ||||||||||
| Selling, general and administrative expenses | 226,628 | 209,318 | 750,448 | 650,564 | ||||||||||
| Operating income | 225,769 | 187,576 | 345,043 | 379,880 | ||||||||||
| Interest income (expense) and other income (expense), net | 2,150 | (505 | ) | 2,491 | (13,177 | ) | ||||||||
| Income before income taxes | 227,919 | 187,071 | 347,534 | 366,703 | ||||||||||
| Income tax expense | 56,599 | 46,875 | 86,006 | 87,893 | ||||||||||
| Net income | $ | 171,320 | $ | 140,196 | $ | 261,528 | $ | 278,810 | ||||||
| Basic income per common share | $ | 3.09 | $ | 2.50 | $ | 4.71 | $ | 4.98 | ||||||
| Diluted income per common share | $ | 3.07 | $ | 2.49 | $ | 4.69 | $ | 4.95 | ||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic shares | 55,524,883 | 55,995,978 | 55,547,267 | 55,999,713 | ||||||||||
| Diluted shares | 55,808,193 | 56,315,019 | 55,745,279 | 56,303,854 | ||||||||||
FIVE BELOW, INC.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
| Fifty-two weeks ended | ||||||||
| January 28, 2023 | January 29, 2022 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 261,528 | $ | 278,810 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 105,617 | 84,831 | ||||||
| Share-based compensation expense | 23,583 | 25,787 | ||||||
| Deferred income tax expense | 22,995 | 7,245 | ||||||
| Other non-cash expenses | 409 | 708 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventories | (72,616 | ) | (173,837 | ) | ||||
| Prepaid income taxes and tax receivable | 2,427 | (4,975 | ) | |||||
| Prepaid expenses and other assets | (39,379 | ) | (26,287 | ) | ||||
| Accounts payable | 24,891 | 61,559 | ||||||
| Income taxes payable | (8,168 | ) | 26,071 | |||||
| Accrued salaries and wages | (28,119 | ) | 10,094 | |||||
| Operating leases | 30,022 | 13,131 | ||||||
| Other accrued expenses | (8,264 | ) | 24,775 | |||||
| Net cash provided by operating activities | 314,926 | 327,912 | ||||||
| Investing activities: | ||||||||
| Purchases of investment securities and other investments | (56,459 | ) | (477,082 | ) | ||||
| Sales, maturities, and redemptions of investment securities | 304,473 | 299,652 | ||||||
| Capital expenditures | (251,954 | ) | (288,167 | ) | ||||
| Net cash used in investing activities | (3,940 | ) | (465,597 | ) | ||||
| Financing activities: | ||||||||
| Cash paid for Revolving Credit Facility financing costs | (248 | ) | — | |||||
| Net proceeds from issuance of common stock | 824 | 828 | ||||||
| Repurchase and retirement of common stock | (40,007 | ) | (60,011 | ) | ||||
| Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units | 777 | 390 | ||||||
| Common shares withheld for taxes | (4,981 | ) | (7,332 | ) | ||||
| Net cash used in financing activities | (43,635 | ) | (66,125 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 267,351 | (203,810 | ) | |||||
| Cash and cash equivalents at beginning of year | 64,973 | 268,783 | ||||||
| Cash and cash equivalents at end of year | $ | 332,324 | $ | 64,973 | ||||
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