Teen and tween value retailer Five Below isn’t backing down from its rapid store expansion anytime soon.
The company on Thursday said it will open 145 to 150 stores in fiscal 2019, up from 125 new locations last year.
Five Below, which currently has 750 stores in 33 states, sees the potential for 2,500-plus stores in the United States.
“Our 2018 store openings are on track to be another record class with first year average unit volumes expected to be over $2 million,” said CEO and president Joel Anderson. “We are excited to continue our high growth with a record number of new store openings and remain confident in our 20/20 through 2020 goals and our ability to reach our 2,500+ U.S. store potential.”
The retailer’s store opening plans were included in its fourth quarter results. Net income totaled $89.3 million, or $1.59 per share, for the quarter ended Feb. 2, up from $67.4 million, or $1.21 per share, last year. Analysts had expected earnings per share of $1.57.
Sales surged 19.4% to $602.7 million, up from $504.8 million last year. (Excluding the third week in fiscal 2017, sales rose 23.2%.) Analysts had been looking for sales of $601.1 million. Same-store sales rose 4.4%.
For the full year, Five Below’s net sales increased 22.0% to $1.559 billion, or 23.5% excluding the extra week last year. Same-store sales rose 3.9%.
“Our strong fourth quarter performance capped off a great year for Five Below,” said CEO Joel Anderson. “For the year, we delivered comparable sales growth of 3.9% on top of last year’s record results. We saw broad-based strength across our worlds as our incredible, trend-right value offering and fun in-store experience drove both new and existing customers to Five Below.”
Five Below expects first-quarter sales in the range of $361 million to $366 million and EPS in the range of 32 cents to 35 cents. The FactSet consensus is for sales of $364 million and EPS of 35 cents. For the year, the company expects sales in the range of $1.865 billion to $1.885 billion and EPS in the range of $3.00 to $3.07. FactSet forecasts sales of $1.891 billion and EPS of $3.08. Five Below expects to open 145-to-150 stores in fiscal 2019, which would bring the total number of stores to 895 to 900. It is also testing a limited selection with a higher price point, up to $10. CFRA says the company has “‘Amazon-proof’ positioning” and maintains its buy stock rating and $135 price target.