- Five Below (FIVE) has caught our attention because it has been in a nice and steady uptrend since late July. The most recent catalyst was a surprisingly strong Q3 (Oct) report in late November. The report included impressive guidance for the all-important Q4 (Jan) holiday season. Same store comps of -2.7% in OctQ were well ahead of prior guidance of -9% to -7% and a nice bounce back after missing on comps in JulQ.
- We also think investors are getting excited about how FIVE may perform during the holiday season. FIVE’s current guidance for JanQ comps is -1% to +1%, but after the big beat in OctQ maybe investors are looking for upside here. FIVE typically reports Q4 results in March.
- FIVE said recently that it had a strong Black Friday weekend. Also, FIVE is much better stocked with merchandise this year after dealing with out-of-stocks on some items last holiday season. FIVE also has improved the quality of its holiday offering this year. The goal is to have something for everyone at a value price, which is good with inflation remaining high.
- We just wanted to flag Five Below for subscribers given its recent trading action. In fairness, FIVE can be pretty hit-or-miss when it comes to earnings, but investors seem to be banking on a solid holiday period for FIVE.
