Five Below, Inc. Announces Fourth Quarter and Fiscal 2023 Financial Results
PHILADELPHIA, PA — Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the fourth quarter and full year of fiscal 2023 ended February 3, 2024, both of which contained one additional week (“53rd week”) versus the comparable periods, and outlook for fiscal 2024.
For the fourth quarter ended February 3, 2024:
- Net sales increased by 19.1% to $1.34 billion from $1.12 billion in the fourth quarter of fiscal 2022. Excluding the impact of the 53rd week in fiscal 2023, net sales increased 14.9%; comparable sales increased by 3.1% on a thirteen week basis.
- Net sales in the 53rd week were $48.1 million and represented approximately $0.15 cents in diluted earnings per share.
- The Company opened 63 net new stores and ended the quarter with 1,544 stores in 43 states. This represents an increase in stores of 15.2% from the end of the fourth quarter of fiscal 2022.
- Operating income was $268.4 million compared to $225.8 million in the fourth quarter of fiscal 2022.
- The effective tax rate was 25.8% compared to 24.8% in the fourth quarter of fiscal 2022.
- Net income was $202.2 million compared to $171.3 million in the fourth quarter of fiscal 2022.
- Diluted income per common share was $3.65 compared to $3.07 in the fourth quarter of fiscal 2022. The fourth quarter of fiscal 2022 included a $0.01 benefit from shared-based accounting.
Joel Anderson, President and CEO of Five Below, stated, “Holiday 2023 marked a strong end to the year for sales performance as our amazing assortment of Wow product drove yet another quarter of comp transaction growth, led by the Five Beyond format stores. In fiscal 2023, we opened a record 205 new stores and ended the year with over half of our comparable stores in the Five Beyond format. The benefit of strong sales performance to our profitability was offset by higher than anticipated shrink headwinds, resulting in earnings at the low end of our guidance range.”
Mr. Anderson continued, “We have implemented additional shrink mitigation initiatives based on our 2023 learnings. However, we expect the resulting benefits to take some time to realize, and therefore, we have not included any associated improvement in our outlook this year. We will continue to focus on driving our growth this year, supported by our five strategic pillars, delivering between 225 and 235 planned new stores, approximately 200 store conversions to the Five Beyond format and completing the expansion of two distribution centers. We will leverage our growing scale and sourcing capabilities to deliver even more Wow to our customers while we utilize technology and data analytics throughout the organization to refine our marketing strategies, generate inventory efficiencies, and simplify processes for our Crew.”
For the fiscal year ended February 3, 2024:
- Net sales increased by 15.7% to $3.56 billion from $3.08 billion in fiscal 2022. Excluding the impact of the 53rd week in fiscal 2023, net sales increased 14.1%; comparable sales increased by 2.8% on a fifty-two week basis.
- Net sales in the 53rd week were $48.1 million and represented approximately $0.15 cents in diluted earnings per share.
- The Company opened 204 net new stores compared to 150 new stores in fiscal 2022.
- Operating income was $385.6 million compared to $345.0 million in fiscal 2022.
- The effective tax rate was 24.9% compared to 24.7% in fiscal 2022.
- Net income was $301.1 million compared to $261.5 million in fiscal 2022.
- Diluted income per common share was $5.41 compared to $4.69 in fiscal 2022. The benefit from share-based accounting was approximately $0.07 in fiscal 2023 compared to approximately $0.04 in fiscal 2022.
- The Company repurchased approximately 500,000 shares in fiscal 2023 at a cost of approximately $80.0 million.
First Quarter and Fiscal 2024 Outlook:
The Company expects the following results for the first quarter and full year of fiscal 2024. This guidance does not include the impact of share repurchases, if any.
For the first quarter of Fiscal 2024:
- Net sales are expected to be in the range of $826 million to $846 million based on opening approximately 55 to 60 new stores and assuming an approximate flat to 2% increase in comparable sales.
- Net income is expected to be in the range of $32 million to $38 million.
- Diluted income per common share is expected to be in the range of $0.58 to $0.69 on approximately 55.6 million diluted weighted average shares outstanding.
For the full year of Fiscal 2024:
- Net sales are expected to be in the range of $3.97 billion to $4.07 billion based on opening between 225 and 235 new stores and assuming an approximate flat to 3% increase in comparable sales.
- Net income is expected to be in the range of $318 million to $346 million.
- Diluted income per common share is expected to be in the range of $5.71 to $6.22 on approximately 55.6 million diluted weighted average shares outstanding.
- Gross capital expenditures are expected to be approximately $365 million in fiscal 2024.
| FIVE BELOW, INC. Consolidated Balance Sheets (Unaudited) (in thousands) |
|||||||
| February 3, 2024 | January 28, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 179,749 | $ | 332,324 | |||
| Short-term investment securities | 280,339 | 66,845 | |||||
| Inventories | 584,627 | 527,720 | |||||
| Prepaid income taxes and tax receivable | 4,834 | 8,898 | |||||
| Prepaid expenses and other current assets | 153,993 | 130,592 | |||||
| Total current assets | 1,203,542 | 1,066,379 | |||||
| Property and equipment, net | 1,134,312 | 925,530 | |||||
| Operating lease assets | 1,509,416 | 1,319,132 | |||||
| Long-term investment securities | 7,791 | — | |||||
| Other assets | 16,976 | 13,870 | |||||
| $ | 3,872,037 | $ | 3,324,911 | ||||
| Liabilities and Shareholders’ Equity | |||||||
| Current liabilities: | |||||||
| Line of credit | $ | — | $ | — | |||
| Accounts payable | 256,275 | 221,120 | |||||
| Income taxes payable | 41,772 | 19,928 | |||||
| Accrued salaries and wages | 30,028 | 25,420 | |||||
| Other accrued expenses | 146,887 | 136,316 | |||||
| Operating lease liabilities | 240,964 | 199,776 | |||||
| Total current liabilities | 715,926 | 602,560 | |||||
| Other long-term liabilities | 6,826 | 4,296 | |||||
| Deferred income taxes | 66,743 | 59,151 | |||||
| Long-term operating lease liabilities | 1,497,586 | 1,296,975 | |||||
| Total liabilities | 2,287,081 | 1,962,982 | |||||
| Shareholders’ equity: | |||||||
| Common stock | 551 | 555 | |||||
| Additional paid-in capital | 182,709 | 260,784 | |||||
| Retained earnings | 1,401,696 | 1,100,590 | |||||
| Total shareholders’ equity | 1,584,956 | 1,361,929 | |||||
| $ | 3,872,037 | $ | 3,324,911 | ||||
| FIVE BELOW, INC. Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) |
|||||||||||||||
| Fourteen weeks ended | Thirteen weeks ended | Fifty-three weeks ended | Fifty-two weeks ended | ||||||||||||
| February 3, 2024 | January 28, 2023 | February 3, 2024 | January 28, 2023 | ||||||||||||
| Net sales | $ | 1,337,736 | $ | 1,122,751 | $ | 3,559,369 | $ | 3,076,308 | |||||||
| Cost of goods sold (exclusive of items shown separately below) | 786,122 | 670,354 | 2,285,544 | 1,980,817 | |||||||||||
| Selling, general and administrative expenses | 246,078 | 197,709 | 757,507 | 644,831 | |||||||||||
| Depreciation and amortization | 37,094 | 28,919 | 130,747 | 105,617 | |||||||||||
| Operating income | 268,442 | 225,769 | 385,571 | 345,043 | |||||||||||
| Interest income and other income, net | 4,107 | 2,150 | 15,530 | 2,491 | |||||||||||
| Income before income taxes | 272,549 | 227,919 | 401,101 | 347,534 | |||||||||||
| Income tax expense | 70,350 | 56,599 | 99,995 | 86,006 | |||||||||||
| Net income | $ | 202,199 | $ | 171,320 | $ | 301,106 | $ | 261,528 | |||||||
| Basic income per common share | $ | 3.66 | $ | 3.09 | $ | 5.43 | $ | 4.71 | |||||||
| Diluted income per common share | $ | 3.65 | $ | 3.07 | $ | 5.41 | $ | 4.69 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic shares | 55,194,999 | 55,524,883 | 55,487,252 | 55,547,267 | |||||||||||
| Diluted shares | 55,356,074 | 55,808,193 | 55,621,619 | 55,745,279 | |||||||||||
| FIVE BELOW, INC. Consolidated Statements of Cash Flows (Unaudited) (in thousands) |
|||||||
| Fifty-three weeks ended | Fifty-two weeks ended | ||||||
| February 3, 2024 | January 28, 2023 | ||||||
| Operating activities: | |||||||
| Net income | $ | 301,106 | $ | 261,528 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 130,747 | 105,617 | |||||
| Share-based compensation expense | 17,859 | 23,583 | |||||
| Deferred income tax expense | 7,592 | 22,995 | |||||
| Other non-cash expenses | 351 | 409 | |||||
| Changes in operating assets and liabilities: | |||||||
| Inventories | (56,907 | ) | (72,616 | ) | |||
| Prepaid income taxes and tax receivable | 4,064 | 2,427 | |||||
| Prepaid expenses and other assets | (26,651 | ) | (39,379 | ) | |||
| Accounts payable | 35,133 | 24,891 | |||||
| Income taxes payable | 21,844 | (8,168 | ) | ||||
| Accrued salaries and wages | 4,608 | (28,119 | ) | ||||
| Operating leases | 51,515 | 30,022 | |||||
| Other accrued expenses | 8,358 | (8,264 | ) | ||||
| Net cash provided by operating activities | 499,619 | 314,926 | |||||
| Investing activities: | |||||||
| Purchases of investment securities and other investments | (416,649 | ) | (56,459 | ) | |||
| Sales, maturities, and redemptions of investment securities | 195,364 | 304,473 | |||||
| Capital expenditures | (335,050 | ) | (251,954 | ) | |||
| Net cash used in investing activities | (556,335 | ) | (3,940 | ) | |||
| Financing activities: | |||||||
| Cash paid for Revolving Credit Facility financing costs | — | (248 | ) | ||||
| Net proceeds from issuance of common stock | 980 | 824 | |||||
| Repurchase and retirement of common stock | (80,541 | ) | (40,007 | ) | |||
| Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units | 288 | 777 | |||||
| Common shares withheld for taxes | (16,586 | ) | (4,981 | ) | |||
| Net cash used in financing activities | (95,859 | ) | (43,635 | ) | |||
| Net (decrease) increase in cash and cash equivalents | (152,575 | ) | 267,351 | ||||
| Cash and cash equivalents at beginning of year | 332,324 | 64,973 | |||||
| Cash and cash equivalents at end of year | $ | 179,749 | $ | 332,324 | |||
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