Bear of the Day: Five Below (FIVE)

Five Below, Inc. FIVE is getting hit by the tariff uncertainties. This Zacks Rank #5 (Strong Sell) guided below consensus for fiscal 2025.Five Below is a value retailer offering trend-right, high-quality products geared towards teens and pre-teens. Most items are priced between $1 and $5 with some extreme value items priced above $5.It is headquartered in Philadelphia and has over 1,700 stores in 44 states.Five Below Beats on Earnings in the Fourth Quarter of Fiscal 2024On Mar 19, 2025, Five Below reported its fiscal 2024 fourth quarter and full year results. It beat on the Zacks Consensus for the fourth quarter reporting $3.48 versus the consensus of $3.38.It was the second earnings beat in a row.Net sales rose 4% to $1.39 billion from $1.34 billion in the prior year, or, when you exclude the impact of the 53rd week in fiscal 2023, it was an increase of 7.8%.Comparable sales, a key metric for retailers, fell 3%.Five Below continues to aggressively expand. In the quarter it opened a net new 22 stores and ended the quarter with 1,771 stores in 44 states. That’s an increase in stores of 14.7% from the same period a year before.For the full year the company had a rapid pace of growth. Five Below opened 227 net new stores in fiscal 2024 compared to 204 net new stores in fiscal 2023.Five Below Guides Light for Fiscal 2025Five Below took into consideration the tariffs when giving its guidance but this was on Mar 19, 2025, before Liberation Day.Even still, the analysts have not adjusted their estimates for the post-Liberation Day reality.Five Below guided comparable sales from flat to a 3% increase for the full year.Earnings are expected to be in the range of $4.10 to $4.72. This was below the Zacks Consensus.Not surprisingly, the analysts cut their estimates to get into agreement with the guidance. 9 estimates were cut in the last 60 days and 2 were slashed in the last 30 days.The Zacks Consensus fell to $4.44 from $5.03 just 60 days before. This is an earnings decline of 11.9% as Five Below made $5.04 in fiscal 2024.Here’s what it looks like on the price and consensus chart.Image Source: Zacks Investment ResearchFive Below Shares Sink in 2025The retailers have been hit hard by the tariff uncertainties. Shares of Five Below have sunk 32% year-to-date and were recently trading at new 5-year lows.Is Five Below cheap?It trades with a forward price-to-earnings (P/E) ratio of just 15.3 which is in value stock territory.Five Below also has a PEG ratio, which measures earnings over growth, of just 0.6. A PEG ratio under 1.0 usually indicates a company has both value and growth.However, even though Five Below guided with tariff impacts in March, there are still uncertainties surrounding earnings for this year.Five Below isn’t scheduled to report first quarter earnings until June.Investors might want to wait on the sidelines for an update on tariffs and the business before diving in.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks