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On Thursday, BofA Securities analysts raised the price target for Five Below stock (NASDAQ:FIVE) to $93 from $78, while maintaining an Underperform rating. The adjustment follows the company’s first-quarter earnings per share (EPS) of $0.86, which surpassed the pre-announced range of $0.82 to $0.84. This increase was driven by stronger sales performance and gross margin improvements, with the company maintaining a healthy 34.9% gross margin. According to InvestingPro data, Eight analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s performance.
Five Below’s management has also revised its fiscal 2025 guidance, now expecting sales between $4.3 billion and $4.4 billion and comparable sales growth of 3% to 5%. The low end of the EPS guidance has been adjusted to $4.25 to $4.72, accounting for higher sales in the first half of the fiscal year, offset by cost pressures. The company, currently valued at $6.73 billion, has demonstrated solid revenue growth of 8.91% over the last twelve months. InvestingPro analysis indicates the stock is currently trading below its Fair Value, with additional insights available in the comprehensive Pro Research Report.
In a recent announcement, Five Below revealed that its Chief Financial Officer, Kristy Chipman, will step down for personal reasons. Chief Operating Officer Ken Bull will serve as interim CFO. This executive change comes as the company continues to navigate tariff pressures affecting its operations.
BofA Securities analysts have increased their fiscal 2025 and fiscal 2026 EPS estimates by 1% to reflect the company’s improving sales, despite the ongoing tariff challenges. The updated price target is based on a valuation of 20 times the estimated fiscal 2026 EPS, up from the previous 17 times, due to positive business trends.
The analysts, however, maintain an Underperform rating, indicating concerns about potential multiple expansion given the anticipated decline in fiscal 2025 EPS and flat expectations for fiscal 2026 EPS.
In other recent news, Five Below has reported its first-quarter earnings for fiscal year 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.86, significantly beating the forecasted $0.66, and reported revenue of $970.5 million, which also exceeded the anticipated $932.86 million. This represents a 19.5% year-over-year increase in revenue. Comparable sales rose by 7.1%, and the company ended the quarter with $624 million in cash and no debt. Despite the strong financial results, KeyBanc analysts maintained a neutral stance on the stock, citing potential risks from tariff rate increases and macroeconomic factors. They noted Five Below’s recent merchandising initiatives under new CEO Winnie Park as positive, but highlighted the challenges ahead. Five Below has also projected full-year sales between $4.33 billion and $4.42 billion, with a forecasted adjusted EPS ranging from $4.25 to $4.72, indicating confidence in their ongoing growth strategies. The company plans to mitigate tariff impacts by diversifying vendors and increasing domestic sourcing.
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