Five Below, Inc. (FIVE) has reported a 25.59 percent rise in profit for the quarter ended Oct. 29, 2016. The company has earned $5.45 million, or $0.10 a share in the quarter, compared with $4.34 million, or $0.08 a share for the same period last year.
Revenue during the quarter grew 17.56 percent to $199.48 million from $169.68 million in the previous year period. Gross margin for the quarter expanded 99 basis points over the previous year period to 32.09 percent. Total expenses were 95.67 percent of quarterly revenues, down from 95.88 percent for the same period last year. This has led to an improvement of 20 basis points in operating margin to 4.33 percent.
Operating income for the quarter was $8.63 million, compared with $7 million in the previous year period.
"We are pleased to have delivered earnings at the high-end of our guidance range in our fiscal third quarter," stated Joel Anderson, chief executive officer of Five Below. "Our track record of outstanding new store performance continued and, despite being up against a strong third quarter last year, we delivered solid sales growth, expanded operating margins and increased EPS by 25% for the quarter." Mr. Anderson continued, "As we look to the all-important fourth quarter, we believe we are well-positioned to wow our customers with our compelling holiday assortment accompanied by exciting marketing plans, including our new and expanded TV campaign. We are pleased with the start to the holiday season and look forward to delivering our customers a steady stream of amazing products at exceptional values, reinforcing our position as a destination of choice for their holiday gift-giving and stocking stuffer needs."
For financial year 2016, Five Below forecasts revenue to be in the range of $1,003 million to $1,009 million for fiscal year 2016. Five Below projects net income to be in the range of $71.30 million to $72.70 million. It expects diluted earnings per share to be in the range of $1.29 to $1.32.
For the fourth-quarter, Five Below forecasts revenue to be in the range of $391 million to $397 million. Five Below projects net income to be in the range of $49.20 million to $50.60 million. The company expects diluted earnings per share to be in the range of $0.89 to $0.92.
Operating cash flow remains negative
Five Below has spent $2.87 million cash to meet operating activities during the nine month period as against cash outgo of $1.51 million in the last year period.
Cash flow from investing activities was $0.71 million for the nine month period as against cash outgo of $44.75 million in the last year period.
Cash flow from financing activities was $2.62 million for the nine month period, up 127.17 percent or $1.46 million, when compared with the last year period.
Cash and cash equivalents stood at $53.54 million as on Oct. 29, 2016, up 196.06 percent or $35.45 million from $18.08 million on Oct. 31, 2015.
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