Shares of Five Below, the Center City-based chain of youth-oriented dollar stores, jumped as much a 23 percent in trading this morning — to nearly $100 a share, the highest since it went public in 2012 — after posting higher-than-expected first-quarter sales and profits late Wednesday.
"Slime, smiley, squishy, spa and mermaid trends continued to be popular," chief executive Joel Anderson told investors in a conference call. But he warned it could be hard to show similar growth in the second quarter, since last year's "spinners craze" will be tough to top.
Sales jumped 27 percent over a year earlier, to $296 million for the quarter. The company's after-tax profits nearly doubled, to $25.8 million from $13.1 milllion in the year-earlier quarter, as Five Below opened 33 new stores (in 18 states). The company also benefit from the Trump cuts in corporate tax rates: while pre-tax profits nearly doubled, Five Below's income tax bill acutally declined, compared to a year earlier.
That's an "all-time high in terms of grand openings this quarter," noted analyst Scot Ciccarelli of RBC Capital Markets. CEO Anderson noted most of the stores were in states where Five Below already does business. The company has also added stores for the first time in California. The company plans to boost the current 658 stores to 750 by the end of the year.
Anderson added that the company has upgraded its point-of-sale computer and financial systems to support an eventual network of 2,500 U.S. stores. Five Below also opened three warehouses this Spring and agreed to build another near Atlanta that will eventually total 1 million square feet, to open early next year
The company's business is highly seasonal, with fourth-quarter sales around Christmas roughly double those of other quarters. There's also a bump in the summer months.