LONDON, UK / ACCESSWIRE / September 20, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Five Below, Inc. (NASDAQ: FIVE), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=FIVE, following the Company's release of its second quarter fiscal 2017 financial results on August 31, 2017. The discount retailer exceeded top- and bottom-line expectations and also provided guidance for the upcoming quarter. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the thirteen weeks ended July 29, 2017, Five Below's net sales surged 28.7% to $283.3 million from $220.1 million in Q2 2016. The Company's sales growth was driven by continued strong results from its new stores and a high transaction-driven comp of 9.3%, which was its highest quarterly comp since the IPO and above Five Below's 8% high-end guidance. The Company's net sales topped analysts' estimates of $277.2 million.

For Q2 2017, Five Below's gross profit advanced 34.3% to $98.5 million from $73.4 million reported in Q2 2016. The Company's gross margin had increased by approximately 145 basis points to 34.8% primarily driven by improved merchandise margins from higher margin spinner sales and leveraging of store occupancy and distribution costs.

As a percentage of sales, Five Below's selling, general, and administrative expense (SG&A) for Q2 2017 decreased approximately 70 basis points to 25.5% from 26.2% in Q2 2016 as the Company leveraged expenses on the higher sales results. Five Below's operating income soared 67.4% to $26.3 million in Q2 2017 from $15.7 million in Q2 2016.

Five Below's net income was $16.8 million in Q2 2017 compared to $9.8 million in Q2 2016. The Company's diluted income per common share was $0.30 in the reported quarter compared to $0.18 per share in the year-ago corresponding period. Five Below's earnings beat Wall Street's estimates of $0.26 per share.

Store Update

During Q2 2017, Five Below opened 31 new stores and ended the reported quarter with 584 stores in 32 states. This represented an increase in stores of 18.9% on a y-o-y basis.

Cash Matters

Five Below ended Q2 2017 with $167.5 million in cash, cash equivalents, and investments and no debt. The Company's inventory at the end of the reported quarter was $184.5 million compared to $154.8 million at the end of the year-ago same period. Five Below's average per store inventory at the end of Q2 2017 was flat on a y-o-y basis.

Outlook

For Q3 2017, Five Below is forecasting net sales to be in the range of $241 million to $246 million based on opening approximately 35 new stores and assuming a 3% to 5% increase in comparable sales. The Company's net income for the upcoming quarter is expected to be in the range of $6.2 million to $7.4 million, with a diluted income per common share range of $0.11 to $0.13.

For FY17, Five Below is projecting net sales to be in the range of $1.236 billion to $1.248 billion based on opening approximately 100 new stores and assuming a 3.5% to 4.5% increase in comparable sales. The Company's net income is expected to be in the range of $90.3 million to $92.6 million, with a diluted income per common share of $1.62 to $1.66.

Stock Performance

On Tuesday, September 19, 2017, the stock closed the trading session at $49.47, slightly rising 0.08% from its previous closing price of $49.43. A total volume of 594.80 thousand shares have exchanged hands. Five Below's stock price surged 2.83% in the last three months, 27.34% in the past six months, and 22.51% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 23.80%. The stock is trading at a PE ratio of 34.00. At Tuesday's closing price, the stock's net capitalization stands at $2.73 billion.

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SOURCE: Pro-Trader Daily