vendredi 3 septembre 2021

Five Below (FIVE): incredible results

Five Below is a company that everybody should follow: it's the most promising cheap stuff  store in my opinion. And it's not new. It's been the most promising cheap stuff store over the last 5 years at least. 

Five Below's latest results: 

Net sales: up 52% compared to same quarter 2020

Net sales: up 55% compared to same quarter 2019

Comparable sales (2021): up 39% 

Comparable sales (2020): down 12% from the year before 

EPS last quarter: 1,15$

EPS comparable quarter 2020: 0,53$

EPS comparable quarter 2019: 0,51$

New stores open last quarter: 34

New stores planned to open in 2021: 170-175

Current number of stores: 1121

Even if the latest reults were great, the market wans't convinced because the stock dropped by about 14% yesterday. I don't understand that reaction. But there's many things I don't understand. 

Of course, 2020 has been a tough year for many businesses including Five Below. But if we compare the latest sales to sales two years before, an increase of 55% is amazing to me. And the EPS have more than doubled since 2019 and since 2020 too.

The debt level of FIVE is way higher than it was some years ago. However, excluding this item, Five Below has everything I'm looking for as an investor. Plus, we can currently pay about 34 times earnings for this exceptional company. Of course, it's not cheap, but many companies are growing much slower than that and are much more expensive. 

So, in a relative way, it's a great company to buy,. 

In my not-always-right opinion, of course. 

1 commentaire:

  1. Agreed the results were pretty good. I think the decrease in share price was because management didn't provide guidance for the rest of 2021. Not sure why they wouldn't since they're a dollar store chain. Market is speculating results won't be as good since they wouldn't provide guidance.