Five Below isn’t letting the pandemic get in the way of its store expansion.
The value teen and tween chain is one of the few retailers that has not pulled in the reins on new store growth. It opened a record 63 new stores during the second quarter — compared to 44 in the same period last year — for a total of 982 stores in 38 states. Most of the new locations featured the retailer’s new prototype, which includes self-checkout, an expanded snack area and a section of items priced above $5 (called “Five Beyond.)
Five Below expects to open 110 to 120 net new stores in 2020. In addition, it plans to remodel approximately 45 stores and add self-checkout capabilities to more than 100 additional existing stores
“With nearly 1,000 stores today, we have a long runway of growth with a nationwide potential of over 2,500 stores,” CEO Joel Anderson told analysts on the chain’s earnings call.
Five Below reported net income of $29.6 million, or $0.53 a share, for the quarter ended Aug. 1, compared with net income of $28.8 million, or $0.52 a share, in the year-ago period. Analysts had forecast earnings of $0.14 a share.
Revenue edged up 2.1% to $426.1 million, beating the $405.8 million analysts had expected.
“I am proud of the execution of the entire Five Below team and the results we delivered against a challenging backdrop,” stated Anderson. “We swiftly responded to new and changing operating conditions – safely reopening our chain while opening 63 new stores across 24 states, accelerating our digital strategy, and ensuring the relevance of our merchandise assortment and marketing messages to reflect the current environment, including a focus on essential items.”
Anderson noted that the third quarter is off to a strong start and the company is focused on the all-important holiday season. On the earnings call, he told analysts that this year’s holiday calendar should work in the company’s favor in helping to spread out the holiday traffic and shopping.
“This year, there are two more shopping days between Thanksgiving and Christmas,” Anderson said on the earnings call. “And Christmas is on a Friday, providing a full week post-Super Saturday for last-minute holiday shopping.”