: Five Below lowers guidance to account for ‘shrink’
Shares of Five Below Inc. FIVE dropped more than 5% in the extended session Wednesday after the retailer reported second-quarter sales that missed Wall Street expectations and tweaked its guidance for the year to account for “shrink,” or the loss of items usually attributed to theft, fraud or employee error. Five Below earned $46.8 million, or 84 cents a share, in the quarter, compared with $41.3 million, or 74 cents a share, in the year-ago quarter. Sales rose 14% to $759 million, the company said. Same-store sales increased 2.7%, it said. FactSet consensus called for EPS of 83 cents a share on sales of $760 million. Chief Executive Joel Anderson said that the company is adjusting its earnings guidance “to reflect an anticipated increase in shrink reserves,” but sales outlook remained unchanged. “We will continue to play offense on sourcing amazing product, capitalizing on an improved supply chain, opening a record number of new stores, and executing on the continued success of our Five Beyond store format,” he said. The company called for full-year sales in a range between $3.50 billion and $3.57 billion, and net income is expected to be in the range between $295 million and $311 million, the company said. Shares of Five Below ended the regular trading day 0.2% higher.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.