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Five Below's (FIVE) Q1 Earnings Coming Up: Factors to Note

Five Below, Inc. FIVE is likely to register an increase in the top line when it reports first-quarter fiscal 2023 results on Jun 1 after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $729.2 million, suggesting an improvement of 14% from the prior-year reported figure.

The Zacks Consensus Estimate for first-quarter earnings per share has been stable at 62 cents over the past 30 days. The figure indicates an increase of 5.1% from the prior-year quarter.

This extreme-value retailer for tweens, teens and beyond has a trailing four-quarter earnings surprise of 26.3%, on average. In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate by a margin of 0.3%.

Factors to Consider

Five Below’s focus on providing trend-right products, improving the supply chain, strengthening digital capabilities and growing its brick-and-mortar footprint bodes well. The company is known for its impressive range of merchandise, per evolving consumer trends. These factors, combined with its pricing strategy, enable it to cater to demographic shoppers and resonate with value-seeking customers.

We believe the higher penetration of Five Beyond and the e-commerce business, new customer acquisitions, the sales lift from remodels and conversions and selective merchandise price increases in response to inflation are likely to have favorably impacted the company’s sales.

Five Below had earlier guided first-quarter fiscal 2023 net sales in the band of $723 million- $735 million, with comparable sales anticipated to increase in the range of 2.5-4%. Management had earlier guided first-quarter earnings between 59 cents and 65 cents per share.

Five Below, Inc. Price, Consensus and EPS Surprise

Five Below, Inc. Price, Consensus and EPS Surprise
Five Below, Inc. Price, Consensus and EPS Surprise

Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote

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Despite the aforementioned tailwinds, margins remain an area to watch. Any deleverage in SG&A expenses due to marketing expenses and incentive compensations may have a direct bearing on margins.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Five Below this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

Five Below has a Zacks Rank #3 but an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:

Bath & Body Works BBWI currently has an Earnings ESP of +0.34% and a Zacks Rank #3. The company is likely to register a decrease in the bottom line when it reports second-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 32 cents suggests a decline of 38.5% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bath & Body Works’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.57 billion, which indicates a decline of 3.1% from the figure reported in the prior-year quarter. Bath & Body Works has a trailing four-quarter earnings surprise of 44.6%, on average.

Macy’s M currently has an Earnings ESP of +2.81% and a Zacks Rank of #3. The company is likely to register a decline in the bottom line when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share of 46 cents suggests a decrease of 57.4% from the year-ago quarter.

Macy’s top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.11 billion, which suggests a drop of 4.4% from the figure reported in the prior-year quarter. Macy’s delivered an earnings beat of 60.7%, on average, in the trailing four quarters.

Dollar Tree DLTR currently has an Earnings ESP of +0.59% and a Zacks Rank #3. The company is expected to register a decrease in the bottom line when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.17 suggests a decline of 26.9% from the year-ago quarter.

Dollar Tree’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $7.17 billion, indicating an increase of 6.1% from the figure reported in the year-ago quarter. DLTR has a trailing four-quarter earnings surprise of 0.4%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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

Macy's, Inc. (M) : Free Stock Analysis Report

Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report

Five Below, Inc. (FIVE) : Free Stock Analysis Report

Bath & Body Works, Inc. (BBWI) : Free Stock Analysis Report

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