3 Must-Know Facts About Five Below You'll Want to Check Out Before Buying the Stock

Motley Fool12-16

Five Below continues to open stores on its path to 3,500 locations in 2030. The business has shown weakness with two critical metrics. Shares trade at a discount to the S&P 500, a ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n3 Must-Know Facts About Five Below You'll Want to Check Out Before Buying the Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-16 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2024/12/15/must-know-facts-five-below-before-buying-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Five Below continues to open stores on its path to 3,500 locations in 2030. \n\n\n\n\n\n\n\nThe business has shown weakness with two critical metrics. \n\n\n\n\n\n\n\nShares trade at a discount to the S&P 500, a ...</p>\n\n<a href=\"https://www.fool.com/investing/2024/12/15/must-know-facts-five-below-before-buying-stock/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SSO","symbol_name":"两倍做多标普500ETF","start_time":0,"source_url":"https://www.fool.com/investing/2024/12/15/must-know-facts-five-below-before-buying-stock/","article_id":"2491357446","we_media_id":null,"thumbnails":["https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F800892%2Fstore-aisle-5-below-dollar-general-dollar-tree.jpg&op=resize&w=165&h=104"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2491357446","pubTimestamp":1734278400,"columns":[],"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Five Below continues to open stores on its path to 3,500 locations in 2030.The business has shown weakness with two critical metrics.Shares trade at a discount to the S&P 500, a valuation that is warranted.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SSO":"两倍做多标普500ETF","BK4559":"巴菲特持仓","BK4588":"碎股","BK4550":"红杉资本持仓","SPXU":"三倍做空标普500ETF","BK4581":"高盛持仓","SPY":"标普500ETF","OEF":"标普100指数ETF-iShares","BK4504":"桥水持仓","BK4200":"专卖店","SDS":"两倍做空标普500ETF","IVV":"标普500指数ETF","SH":"标普500反向ETF","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","OEX":"标普100",".SPX":"S&P 500 Index","VOO":"Vanguard标普500ETF","FIVE":"Five Below","UPRO":"三倍做多标普500ETF"},"translate_title":"关于以下五个您在购买股票之前需要了解的3个必须了解的事实","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FIVE":1,"VOO":0.66,"SPY":0.66,"ESmain":0.6,"UPRO":0.6,"SSO":0.6,"SPXU":0.6,"SH":0.6,"SDS":0.6,"OEX":0.6,"OEF":0.6,"IVV":0.6,".SPX":0.6},"content_text":"Five Below continues to open stores on its path to 3,500 locations in 2030. \n\n\n\n\n\n\n\nThe business has shown weakness with two critical metrics. \n\n\n\n\n\n\n\nShares trade at a discount to the S&P 500, a valuation that is warranted. \n\nShares of Five Below (FIVE 0.15%) are on the way up. Since hitting their 52-week low in August, they have skyrocketed 60% (as of the Dec. 12 close). The momentum is clearly strong with market sentiment improving.But in the past five years, this retail stock is still down 14% with a jarring 51% drop year to date. If you're thinking about investing in Five Below, here are three things you need to know before making that call.Opening more storesFor any retail-based operation, a key component of growth is increasing revenue from each existing location, often measured as comparable sales, as well as opening new stores. In Five Below's case, the latter has been the focal point of its strategy.After opening 82 new locations in fiscal 2024 Q3 (ended Nov. 2), the business had 1,749 stores nationwide. That number was almost double the count from exactly five years ago. Unsurprisingly, this has led to tremendous revenue gains with sales rising 124% during that stretch of time.It makes sense why briskly opening new stores is the emphasis. Each location generates over $2 million in sales and about $500,000 in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first year. However, they only cost an average of $500,000 in upfront capital investment to open. Those unit economics are hard to ignore.Management has set an explicit goal to have 3,500 stores open by 2030. There is still a lot of potential to expand in populated states like California, Texas, Florida, New York, and Pennsylvania. Should the pace of expansion continue toward that target, it's a virtual certainty that revenue will be significantly higher than it is today.Key metrics under pressureFive Below might be spending aggressively to open new locations, which is boosting the top line. However, the company is showing weakness in a couple of key performance metrics.Comparable sales were up just 0.6% in Q3. This marked an improvement after two straight quarters of declines. CFO Kristy Chipman said during the August earnings call, \"Customers remained discerning with their discretionary spending.\"That's certainly a problem, demonstrating the company's struggle to increase revenue at existing locations (those open at least 15 months). It's also concerning negative comps are likely to return. Management expects a 3% to 5% same-store sales drop in the current quarter.Profitability is also taking a hit because of higher labor costs. Five Below reported an operating loss of $0.6 million in the fiscal third quarter after generating $16.1 million in operating income in the year-ago period. For what it's worth, the leadership team slightly upped earnings guidance for fiscal 2024, so it should get back to black.Five Below's valuationWhile Five Below stock has soared since mid-summer, it has disappointed investors over the long haul and underperformed the S&P 500 going back a decade.With that type of disappointing performance, you'd think Five Below's valuation would be a screaming bargain, but that's just not the case. As of this writing, the stock can be purchased at a price-to-earnings ratio of 21.4, only a 16% discount to the S&P 500 average.Investors seeking out growth-focused retailers might find Five Below's potential turnaround compelling. However, I believe the company needs to show concrete and sustainable improvement in its profitability and same-store sales before becoming worthy of an investment.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2491357446"}