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Investing.com – Five Below stock (NASDAQ:FIVE) plunged 10% in Thursday’s premarket trading as its May-July revenue fell short of expectations and the discount retailer’s guidance for the ongoing quarter disappointed.
Third-quarter net sales are expected to be around $557.5 million, based on opening approximately 40-45 new stores and assuming a 5% increase in comparable sales. That represents an abrupt deceleration in sales after second-quarter revenue rose 52% to $646.6 million and comparable sales grew 39%.
Adjusted profit per share more than doubled to $1.15 and topped analysts’ estimates.
Sales rose as consumer spending – particularly among Generation Z, the discount retailer’s target audience – came back. However, analysts had expected more, their estimate for second-quarter sales being $657.81 million. The company opened 34 new stores during the second quarter and ended July with 1,121 stores in 39 states.
The company again declined to give annual guidance, which has been suspended for seven straight quarters.
Five Below had last given annual guidance in December 2019, but suspended it at the start of the pandemic, like many others. However, most companies have since restored the practice. Five Below blamed Covid-19, potential future shifts in consumer spending, and ongoing global supply chain disruptions for its stance.
