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Five Below (NASDAQ:FIVE) is witnessing a market downturn on Thursday subsequent to the unveiling of the retail giant’s earnings report for the final quarter of 2023.
The tale of woe begins with an earnings per share of $3.65 in Q4, a figure trailing Wall Street’s projection of $3.78 for the same period. Yet, a glimmer of optimism is found in this downward spiral as this figure represents a rise from the prior year’s $3.07 per share.
In another sharp jab, FIVE stock registered a revenue of $1.34 billion, missing the mark set by analysts at $1.35 billion. Nevertheless, this number shows an improvement of 19.1% when compared to the previous year’s $1.12 billion.
Joel Anderson, President and CEO of Five Below, shared in the earnings disclosure the setbacks faced, stating, “The benefit of strong sales performance to our profitability was offset by higher than anticipated shrink headwinds, resulting in earnings at the low end of our guidance range.”
“We have implemented additional shrink mitigation initiatives based on our 2023 learnings. However, we expect the resulting benefits to take some time to realize, and therefore, we have not included any associated improvement in our outlook this year.”
Guidance Woes Impact FIVE Stock
The outlook for the first quarter of 2024 presents a bleak picture for Five Below, featuring an EPS of 58 cents to 59 cents against a revenue forecast of $826 million to $846 million. These estimates fall short of Wall Street’s projections, which put EPS at 76 cents and revenue at $851.96 million.
Looking ahead to the full-year 2024, the company anticipates an EPS range of $5.71 to $6.22 and revenue spanning $3.97 billion to $4.07 billion. Despite these figures representing ambitious growth, analysts’ estimates stand at $6.47 for EPS and $4.11 billion in revenue.
With a 12.4% decline recorded in FIVE stock on Thursday morning, investors are bracing themselves for turbulent times ahead in the market.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
