GlobeNewswire Inc | Sep 1, 2021 04:01PM EDT

September 01, 2021

EPS increased 125% to $1.15 and Net Sales increased 55% to $647 million versus Q2 2019

Operating Income increased 139% to $86 million versus Q2 2019

PHILADELPHIA, PA, Sept. 01, 2021 (GLOBE NEWSWIRE) -- Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the second quarter and for the year to date period ended July31, 2021. Given the lack of comparability to the first half of fiscal 2020 due to the impact of COVID-19, results are also compared to the second quarter and year to date period ended August 3, 2019.

For the second quarter ended July31, 2021:

-- Net sales increased by 51.7% to $646.6 million from $426.1 million in the second quarter of fiscal 2020 and by 54.9% from $417.4 million in the second quarter of fiscal 2019; comparable sales increased by 39.2% versus the second quarter of fiscal 2020. For the comparable subset of stores that were open in both the second quarter of fiscal 2019 and the second quarter of fiscal 2021, sales increased 21%. -- The Company opened 34 new stores and ended the quarter with 1,121 stores in 39 states. This represents an increase in stores of 14.2% from the end of the second quarter of fiscal 2020. -- Operating income was $86.2 million compared to $33.1 million in the second quarter of fiscal 2020. Operating income increased by 139.2% from $36.0 million in the second quarter of fiscal 2019. -- The effective tax rate was 23.8% compared to 9.4% in the second quarter of fiscal 2020 and 23.2% in the second quarter of fiscal 2019. -- Net income was $64.8 million compared to $29.6 million in the second quarter of fiscal 2020. Net income increased by 124.9% from $28.8 million in the second quarter of fiscal 2019. -- Diluted income per common share was $1.15 compared to $0.53 in the second quarter of fiscal 2020 and $0.51 in the second quarter of fiscal 2019. The benefit from share-based accounting was approximately $0.01 in the second quarter of fiscal 2021, approximately $0.03 in the second quarter of fiscal 2020, and approximately $0.01 in the second quarter of fiscal 2019.

Joel Anderson, President and CEO of Five Below, stated, We had another strong quarter, with the team executing well in a dynamic operating environment. Sales increased 55% and earnings per share increased 125% versus the second quarter of 2019. Once again, the strength was broad-based throughout our worlds. New store growth continued with the opening of 34 new stores across 19 states, bringing our new store count for the first half to a record 102 new stores.

Mr. Anderson continued, The third quarter is off to a strong start from a sales perspective. We are innovating across our three key strategic priorities: product, experience and supply chain, where the teams are working diligently to mitigate the impact of global disruptions. We are confident that our Wow assortment, the flexibility of our unique model with eight worlds and our new Five Beyond offering, combined with the operating discipline of our teams across the organization, will continue to serve us well as we drive sustainable long-term growth and realize our 2,500-plus store potential in the U.S.

For the year to date period ended July31, 2021:

-- Net sales increased by 98.5% to $1,244.4 million from $627.0 million in the year to date period of fiscal 2020 and by 59.1% from $782.2 million in the year to date period of fiscal 2019; comparable sales increased by 79.9% versus the year to date period of fiscal 2020. For the comparable subset of stores that were open in both the year to date period of fiscal 2019 and the year to date period of fiscal 2021, sales increased 22%. -- The Company opened 101 net new stores compared to 82 net new stores in the year to date period of fiscal 2020. -- Operating income was $149.9 million compared to an operating loss of $39.1 million in the year to date period of fiscal 2020. Operating income increased by 147.7% from $60.5 million in the year to date period of fiscal 2019. -- The effective tax rate was an expense of 22.6% compared to a benefit of 46.7% in the year to date period of fiscal 2020 and an expense of 14.4% in the year to date period of fiscal 2019. -- Net income was $114.4 million compared to a net loss of $21.0 million in the year to date period of fiscal 2020. Net income increased by 110.0% from $54.5 million in the year to date period of fiscal 2019. -- Diluted income per common share was $2.03 compared to a diluted loss per common share of $0.38 in the year to date period of fiscal 2020 and a diluted income per share of $0.97 in the year to date period of fiscal 2019. The benefit from share-based accounting was approximately $0.05 in the year to date period of fiscal 2021, approximately $0.04 in the year to date period of fiscal 2020, and approximately $0.12 in the year to date period of fiscal 2019.

Third Quarter and Fiscal 2021 Outlook:The Company expects the following results for the third quarter of fiscal 2021:

-- Net sales are expected to be in the range of $550 million to $565 million based on opening approximately 40 to 45 new stores and assuming a mid-single digit increase in comparable sales. -- Net income is expected to be in the range of $12.8 million to $16.7 million. -- Diluted income per common share is expected to be in the range of $0.23 to $0.30 on approximately 56.4 million diluted weighted average shares outstanding.

Given the uncertainty related to COVID-19, potential future shifts in consumer spending, and ongoing global supply chain disruption, the Company will not be providing sales or earnings guidance for the full year of fiscal 2021.

Conference Call Information:A conference call to discuss the financial results for the second quarter and year to date period of fiscal 2021 is scheduled for today, September 1, 2021, 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 10158729. 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 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 additional governmental restrictions and requirements, additional store closures and effects on customer demand or on our supply chain, our ability to keep our distribution centers and e-commerce fulfillment centers operational, our ability to effectively operate and remain open in some or all of our stores, and to open new stores and remodels), risks related to disruption to the global supply chain, risks related to the Company's strategy and expansion plans, risks related to the inability to successfully implement our online retail operations, including cyber security risks, 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 $1-$5, and some extreme value items priced beyond $5, 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 Now. Founded in 2002 and headquartered in Philadelphia, Pennsylvania, Five Below today has over 1,100 stores in 39 states. For more information, please visit www.fivebelow.comor find Five Below on Instagram, TikTok, Twitter and Facebook @FiveBelow.

Investor Contact:Five Below, Inc.Christiane PelzVice President, Investor Relations215-207-2658Christiane.Pelz@fivebelow.com

FIVE BELOW, INC.Consolidated Balance Sheets(Unaudited)(in thousands)

July 31, 2021 January 30, August 1, 2021 2020Assets Current assets: Cash and cash equivalents $ 126,195 $ 268,783 $ 160,338 Short-term investment securities 286,929 140,928 41,670 Inventories 347,302 281,267 294,057 Prepaid income taxes and tax 9,410 6,350 15,496 receivablePrepaid expenses and other 69,504 58,085 58,965 current assetsTotal current assets 839,340 755,413 570,526 Property and equipment, net 677,183 565,351 505,299 Operating lease assets 1,086,386 975,862 911,631 Long-term investment securities 1,104 ? ? Other assets 18,921 18,144 12,791 $ 2,622,934 $ 2,314,770 $ 2,000,247 Liabilities and Shareholders? EquityCurrent liabilities: Line of credit $ ? $ ? $ ? Accounts payable 167,704 138,622 121,372 Income taxes payable 931 2,025 775 Accrued salaries and wages 41,654 43,445 18,992 Other accrued expenses 141,520 108,504 90,117 Operating lease liabilities 150,041 143,074 134,937 Total current liabilities 501,850 435,670 366,193 Other long-term liabilities 1,291 1,048 1,540 Long-term operating lease 1,081,555 967,255 908,554 liabilitiesDeferred income taxes 35,778 28,911 5 Total liabilities 1,620,474 1,432,884 1,276,292 Shareholders? equity: Common stock 560 559 559 Additional paid-in capital 327,211 321,075 307,506 Retained earnings 674,689 560,252 415,890 Total shareholders? equity 1,002,460 881,886 723,955 $ 2,622,934 $ 2,314,770 $ 2,000,247

FIVE BELOW, INC.Consolidated Statements of Operations(Unaudited)(in thousands, except share and per share data)

Thirteen Weeks Ended Twenty-Six Weeks Ended July 31, 2021 August 1, July 31, 2021 August 1, 2020 2020Net sales $ 646,554 $ 426,110 $ 1,244,377 $ 627,009 Cost of goods 416,235 286,271 813,189 466,709 soldGross profit 230,319 139,839 431,188 160,300 Selling,general and 144,151 106,697 281,333 199,354 administrativeexpensesOperating 86,168 33,142 149,855 (39,054 )income (loss)Interest(expense)income and (1,071 ) (500 ) (2,048 ) (357 )other(expense)income, netIncome (loss)before income 85,097 32,642 147,807 (39,411 )taxesIncome taxexpense 20,256 3,061 33,370 (18,410 )(benefit)Net income $ 64,841 $ 29,581 $ 114,437 $ (21,001 )(loss)Basic income(loss) per $ 1.16 $ 0.53 $ 2.04 $ (0.38 )common shareDiluted income(loss) per $ 1.15 $ 0.53 $ 2.03 $ (0.38 )common shareWeightedaverage shares outstanding:Basic shares 56,007,970 55,786,823 55,989,399 55,844,418 Diluted shares 56,299,491 55,966,840 56,287,095 55,844,418

FIVE BELOW, INC.Consolidated Statements of Cash Flows(Unaudited)(in thousands)

Twenty-Six Weeks Ended July 31, August 1, 2021 2020Operating activities: Net income (loss) $ 114,437 $ (21,001 )Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization 39,480 33,200 Share-based compensation expense (benefit) 12,353 (1,033 )Deferred income tax expense (benefit) 6,867 (8,711 )Other non-cash expenses 354 1,278 Changes in operating assets and liabilities: Inventories (66,035 ) 29,971 Prepaid income taxes and tax receivable (3,060 ) (11,433 )Prepaid expenses and other assets (9,050 ) 21,631 Accounts payable 29,616 (13,965 )Income taxes payable (1,094 ) (8,730 )Accrued salaries and wages (1,791 ) (881 )Operating leases 10,743 26,755 Other accrued expenses 15,987 14,381 Net cash provided by operating activities 148,807 61,462 Investing activities: Purchases of investment securities and other (251,447 ) (48,344 )investmentsSales, maturities, and redemptions of investment 100,842 60,903 securitiesCapital expenditures (134,614 ) (100,652 )Net cash used in investing activities (285,219 ) (88,093 )Financing activities: Borrowing on note payable under Revolving Credit ? 50,000 FacilityRepayment of note payable under Revolving Credit ? (50,000 )FacilityCash paid for Revolving Credit Facility financing ? (1,755 )costsNet proceeds from issuance of common stock 443 229 Repurchase and retirement of common stock ? (12,663 )Proceeds from exercise of options to purchasecommon stock and vesting of restricted and 359 2,264 performance-based restricted stock unitsCommon shares withheld for taxes (6,978 ) (3,596 )Net cash used in financing activities (6,176 ) (15,521 )Net decrease in cash and cash equivalents (142,588 ) (42,152 )Cash and cash equivalents at beginning of period 268,783 202,490 Cash and cash equivalents at end of period $ 126,195 $ 160,338