EX-99.1 2 q22022fivebelowexhibit991.htm EXHIBIT 99.1

Document

NEWS RELEASE

Five Below, Inc. Announces Second Quarter Fiscal 2022 Financial Results

PHILADELPHIA, PA – (August 31, 2022) – Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the second quarter and for the year to date period ended July 30, 2022.

For the second quarter ended July 30, 2022:

•Net sales increased by 3.5% to $668.9 million from $646.6 million in the second quarter of fiscal 2021; comparable sales decreased by 5.8% versus the second quarter of fiscal 2021.

•The Company opened 27 new stores and ended the quarter with 1,252 stores in 40 states. This represents an increase in stores of 11.7% from the end of the second quarter of fiscal 2021.

•Operating income was $56.0 million compared to $86.2 million in the second quarter of fiscal 2021.

•The effective tax rate was 26.3% compared to 23.8% in the second quarter of fiscal 2021.

•Net income was $41.3 million compared to $64.8 million in the second quarter of fiscal 2021.

•Diluted income per common share was $0.74 compared to $1.15 in the second quarter of fiscal 2021. The second quarter of fiscal 2021 included a $0.01 benefit from share-based accounting.

Joel Anderson, President and CEO of Five Below, stated, “We delivered earnings per share within our guidance range despite lower than expected sales, which we believe were largely driven by the impact of accelerated inflation on our customers’ purchasing behavior during the quarter. We have revised our guidance for the year to reflect our year-to-date performance and updated second half outlook.”

Mr. Anderson added, “We remain focused on our long-term opportunities and Triple-Double goals, including opening 1,000 new stores over the next several years and converting the majority of our chain to the Five Beyond concept. New stores remain our growth driver and we are excited to open approximately 160 new stores this year while preparing to open a record 200-plus stores next year. We will continue to provide our customers an amazing shopping experience with fresh, new WOW products at extreme value, which we believe becomes even more important during the holidays.”

For the year to date period ended July 30, 2022:

•Net sales increased by 5.2% to $1,308.5 million from $1,244.4 million in the year to date period of fiscal 2021; comparable sales decreased by 4.8% versus the year to date period of fiscal 2021.

•The Company opened 62 new stores compared to 101 net new stores in the year to date period of fiscal 2021.

•Operating income was $98.3 million compared to $149.9 million in the year to date period of fiscal 2021.

•The effective tax rate was 24.6% compared to 22.6% in the year to date period of fiscal 2021.

•Net income was $74.1 million compared to $114.4 million in the year to date period of fiscal 2021.

•Diluted income per common share was $1.33 compared to $2.03 in the year to date period of fiscal 2021. The benefit from share-based accounting was approximately $0.02 in the year to date period of fiscal 2022 compared to $0.05 in the year to date period of fiscal 2021.

•The Company repurchased 247,132 shares in the year to date period of fiscal 2022 at a cost of approximately $40.0 million.

Third Quarter and Fiscal 2022 Outlook:

The Company expects the following results for the third quarter and full year fiscal 2022:

For the third quarter of Fiscal 2022:

•Net sales are expected to be in the range of $600 million to $619 million based on opening approximately 45 new stores and assuming an approximate 7% to 9% decrease in comparable sales.

•Net income is expected to be in the range of $4 million to $11 million.

•Diluted income per common share is expected to be in the range of $0.08 to $0.19 on approximately 55.8 million diluted weighted average shares outstanding.

For the full year of Fiscal 2022:

•Net sales are expected to be in the range of $2.97 billion to $3.02 billion based on opening approximately 160 new stores and assuming an approximate 3% to 5% decrease in comparable sales.

•Net income is expected to be in the range of $238 million to $255 million.

•Diluted income per common share is expected to be in the range of $4.26 to $4.56 on approximately 55.8 million diluted weighted average shares outstanding.

•Gross capital expenditures are expected to be approximately $235 million in fiscal 2022.

Conference Call Information:

A conference call to discuss the financial results for the second quarter of fiscal 2022 is scheduled for today, August 31, 2022, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 412-902-6753 approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.fivebelow.com in the investor relations section of the website.

A taped replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online and by dialing 412-317-0088. The pin number to access the telephone replay is 8086739. The replay will be available for approximately two weeks after the call.

Forward-Looking Statements:

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect management's current views and estimates regarding the Company's industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, store count potential and other financial and operating information. Investors can identify these statements by the fact that they use words such as "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future" and similar terms and phrases. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks and uncertainties associated with the COVID-19 pandemic (including closures of our stores, adverse impacts on our sales and operations, future impairment charges and the risk of global recession, and the impact of government regulation), risks related to disruption to the global supply chain, risks related to the Company's strategy and expansion plans, risks related to disruptions in our information technology systems and our ability to maintain and upgrade those systems, risks related to the inability to successfully implement our online retail operations, risks related to cyberattacks or other cyber incidents, risks related to our ability to select, obtain, distribute and market merchandise profitably, risks related to our reliance on merchandise manufactured outside of the United States, the availability of suitable new store locations and the dependence on the volume of traffic to our stores, risks related to changes in consumer preferences and economic conditions, risks related to increased operating costs, including wage rates, risks related to extreme weather, pandemic outbreaks (in addition to COVID-19), global political events, war, terrorism or civil unrest (including any resulting store closures, damage, or loss of inventory), risks related to leasing, owning or building distribution centers, risks related to our ability to successfully manage inventory balance and inventory shrinkage, quality or safety concerns about the Company's merchandise, increased competition from other retailers including online retailers, risks related to the seasonality of our business, risks related to our ability to protect our brand name and other intellectual property, risks related to customers' payment methods, risks related to domestic and foreign trade restrictions including duties and tariffs affecting our domestic and foreign suppliers and increasing our costs, including, among others, the direct and indirect impact of current and potential tariffs imposed and proposed by the United States on foreign imports, risks associated with the restrictions imposed by our indebtedness on our current and future operations, the impact of changes in tax legislation and accounting standards and risks associated with leasing substantial amounts of space. For further details and a discussion of these risks and uncertainties, see the Company's periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission and available at www.sec.gov. If one or more of these risks or uncertainties materialize, or if any of the Company's assumptions prove incorrect, the Company's actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About Five Below:

Five Below is a leading high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond. We believe life is better when customers are free to "let go & have fun" in an amazing experience filled with unlimited possibilities. With most items priced between $1 and $5, and some extreme value items priced beyond $5 in our incredible Five Beyond offering, Five Below makes it easy to say YES! to the newest, coolest stuff across eight awesome Five Below worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now. Founded in 2002 and headquartered in Philadelphia, Pennsylvania, Five Below today has over 1,200 stores in 40 states. For more information, please visit www.fivebelow.com or find Five Below on Instagram, TikTok, Twitter and Facebook @FiveBelow.

Investor Contact:

Five Below, Inc.

Christiane Pelz

Vice President, Investor Relations & Treasury

215-207-2658

Christiane.Pelz@fivebelow.com

FIVE BELOW, INC.

Consolidated Balance Sheets

(Unaudited)

(in thousands)

						July 30, 2022						January 29, 2022						July 31, 2021
Assets
Current assets:
Cash and cash equivalents						$	155,101					$	64,973					$	126,195
Short-term investment securities						117,315						277,141						286,929
Inventories						569,201						455,104						347,302
Prepaid income taxes and tax receivable						14,371						11,325						9,410
Prepaid expenses and other current assets						107,771						96,196						69,504
Total current assets						963,759						904,739						839,340
Property and equipment, net						842,002						777,497						677,183
Operating lease assets						1,267,316						1,151,395						1,086,386
Long-term investment securities						—						37,717						1,104
Other assets						13,149						9,112						18,921
						$	3,086,226					$	2,880,460					$	2,622,934
Liabilities and Shareholders’ Equity
Current liabilities:
Line of credit						$	—					$	—					$	—
Accounts payable						266,114						196,461						167,704
Income taxes payable						—						28,096						931
Accrued salaries and wages						19,983						53,539						41,654
Other accrued expenses						159,976						145,268						141,520
Operating lease liabilities						184,450						163,537						150,041
Total current liabilities						630,523						586,901						501,850
Other long-term liabilities						4,077						1,663						1,291
Long-term operating lease liabilities						1,247,631						1,135,456						1,081,555
Deferred income taxes						41,414						36,156						35,778
Total liabilities						1,923,645						1,760,176						1,620,474
Shareholders’ equity:
Common stock						555						556						560
Additional paid-in capital						248,902						280,666						327,211
Retained earnings						913,124						839,062						674,689
Total shareholders’ equity						1,162,581						1,120,284						1,002,460
						$	3,086,226					$	2,880,460					$	2,622,934

FIVE BELOW, INC.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

			Thirteen Weeks Ended																		Twenty-Six Weeks Ended
			July 30, 2022						July 31, 2021																		July 30, 2022						July 31, 2021
Net sales			$	668,927					$	646,554																	$	1,308,523					$	1,244,377
Cost of goods sold			440,418						416,235																		873,237						813,189
Gross profit			228,509						230,319																		435,286						431,188
Selling, general and administrative expenses			172,498						144,151																		336,946						281,333
Operating income			56,011						86,168																		98,340						149,855
Interest income (expense) and other income (expense), net			95						(1,071)																		(142)						(2,048)
Income before income taxes			56,106						85,097																		98,198						147,807
Income tax expense			14,762						20,256																		24,136						33,370
Net income			$	41,344					$	64,841																	$	74,062					$	114,437
Basic income per common share			$	0.74					$	1.16																	$	1.33					$	2.04
Diluted income per common share			$	0.74					$	1.15																	$	1.33					$	2.03
Weighted average shares outstanding:
Basic shares			55,498,471						56,007,970																		55,572,425						55,989,399
Diluted shares			55,646,039						56,299,491																		55,739,752						56,287,095

FIVE BELOW, INC.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

						Twenty-Six Weeks Ended
						July 30, 2022						July 31, 2021
Operating activities:
Net income						$	74,062					$	114,437
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization						49,120						39,480
Share-based compensation expense						12,139						12,353
Deferred income tax expense						5,258						6,867
Other non-cash expenses						281						354
Changes in operating assets and liabilities:
Inventories						(114,097)						(66,035)
Prepaid income taxes and tax receivable						(3,046)						(3,060)
Prepaid expenses and other assets						(15,967)						(9,050)
Accounts payable						64,908						29,616
Income taxes payable						(28,096)						(1,094)
Accrued salaries and wages						(33,556)						(1,791)
Operating leases						17,167						10,743
Other accrued expenses						17,984						15,987
Net cash provided by operating activities						46,157						148,807
Investing activities:
Purchases of investment securities and other investments						(21,848)						(251,447)
Sales, maturities, and redemptions of investment securities						219,391						100,842
Capital expenditures						(109,710)						(134,614)
Net cash provided by (used in) investing activities						87,833						(285,219)
Financing activities:
Net proceeds from issuance of common stock						464						443
Repurchase and retirement of common stock						(40,007)						—
Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units						102						359
Common shares withheld for taxes						(4,421)						(6,978)
Net cash used in financing activities						(43,862)						(6,176)
Net increase (decrease) in cash and cash equivalents						90,128						(142,588)
Cash and cash equivalents at beginning of period						64,973						268,783
Cash and cash equivalents at end of period						$	155,101					$	126,195