Five Below (FIVE) stock was down about 17% at the time of writing. The decline came after the company announced the unexpected exit of its long-time CEO, Joel Anderson, and provided weak Q2 guidance.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Five Below is a chain of specialty discount stores based in the United States. For the stock’s thorough assessment, go to TipRanks’ Stock Analysis page.
Leadership Change Amid Challenges
FIVE announced that Kenneth Bull, previously COO, will serve as interim president and CEO.
The executive shakeup comes at a time when Five Below’s shares are underperforming the broader markets. Year-to-date, FIVE stock has declined by over 52% versus the S&P 500 Index (SPX) gain of about 19%. The company’s performance is impacted by lower customer spending on discretionary items. Furthermore, rising retail theft and additional security measures have squeezed the company’s profit margins.
FIVE Lowers Q2 Forecast
In addition to the management change, the company reported a 5% decline in comparable sales for the 10 weeks ending July 13, compared to the same period last year.
As a result, Five Below lowered its second-quarter sales outlook to $820 million-$826 million, compared to the prior range of $830 million-$850 million. Additionally, the company reduced its EPS guidance to $0.53 to $0.56, down from the previous expectations of $0.57 to $0.69. Analysts’ expectations were pegged at revenue of $833.1 million on earnings of $0.61 per share.
The company is expected to release its Q2 results on August 28, 2024.
Is Five Below Stock a Buy?
Overall, Wall Street is cautiously optimistic about FIVE’s prospects. It has a Moderate Buy consensus rating based on 14 Buy and five Hold recommendations. The analysts’ average price target on Five Below stock is $159.88, implying a 56.64% upside potential from current levels.
