Five Below (FIVE) Q4 2022 & Investor Day 2022 earnings summary

Executive summary

• FY2021 sales reached $2.85B, up 24.2% on a two-year CAGR basis; record operating margin was 13.3% and diluted EPS was $4.95.

• Added 170 net stores, ending FY2021 with 1,190 stores in 40 states; management set a long-term target of 3,500+ stores by 2030.

Financial highlights

• FY2021 net sales were $2,848.4M, up 45.2% YoY; comparable sales rose 30.3%, reflecting recovery from FY2020 COVID-related store closures and traffic limits.

• Operating income was $379.9M vs. $154.8M; net income was $278.8M vs. $123.4M, up 126.0% YoY; diluted EPS was $4.95 vs. $2.20.

• Gross profit increased 58.0% to $1,030.4M; SG&A rose 30.8% to $650.6M as new-store costs increased and FY2020 included pandemic-related expense reductions.

• Operating cash flow was $327.9M; cash used in investing was $465.6M, including investment purchases and capital spending; cash used in financing was $66.1M, primarily reflecting share repurchases.

Outlook and guidance

• FY2022 plan: approximately 160 new stores and approximately $220M in cash capex, including ~$85M for new stores; planned capex to be funded by operations, cash, investments and, as needed, the credit facility.

• Plan to open 375–400 stores over FY2022–FY2023, then 550–600 in FY2024–FY2025; target 3,500+ stores by 2030, $5.6B sales and $10+ EPS by 2025.

• Long-range comparable-sales outlook is 3–5%; updated Five Beyond prototype planned in 80% of stores by end-2025, with operating margin targeted at ~14% by 2025.

• Five Beyond assortment delivered twice the typical basket size, supported by 50% higher units per transaction; presence was established in 30% of stores in 2021.