Five Below (FIVE) Q4 2021 earnings summary

Executive summary

• FY2020 net sales rose 6.2% to $1.962B, driven by new stores, while comparable sales fell 5.5% amid COVID-19 closures and traffic declines.

• Stores closed March 20, 2020 and began reopening in late April; substantially all were open by the end of June.

• Ended FY2020 with 1,020 stores in 38 states; long-term expansion opportunity estimated at more than 2,500 U.S. locations.

Financial highlights

• FY2020 net sales were $1,962.1M, up 6.2%; gross profit was $652.3M, down 3.2%, and operating income was $154.8M, down from $217.3M.

• FY2020 net income was $123.4M, down 29.5% YoY; diluted EPS was $2.20 vs. $3.12.

• Q4 FY2020 net sales were $858.5M, gross profit $340.9M and net income $123.9M; Q4 FY2019 net sales were $687.1M and net income $110.4M.

• Operating cash flow was $366.0M; capex was $200.2M and cash and equivalents ended at $268.8M.

Outlook and guidance

• FY2021 plan: open approximately 170–180 stores; 96 leases for new FY2021 stores had been executed by January 30, 2021.

• FY2021 cash capex planned at approximately $315M, including $95M for new stores; funding expected from operating cash, cash on hand, short-term investments and, as needed, revolver borrowings.

• FY2021 capex plans also support distribution facilities, store relocations and remodels, and corporate infrastructure.

• New-store model targets approximately $2.0M first-full-year sales, approximately $0.4M initial cash investment and average payback under one year.