Five Below, Inc
FIVE BELOW, INC (Form: 8-K, Received: 03/22/2017 16:31:35)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 22, 2017
 
FIVE BELOW, INC.
(Exact Name of Registrant as Specified in Charter)
 

 
 
 
 
Pennsylvania
001-35600
 
75-3000378
(State or Other Jurisdiction of
Incorporation)
(Commission
File Number)
 
(IRS Employer
Identification No.)
1818 Market Street
Suite 2000
Philadelphia, PA 19103
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 546-7909
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))









Item 2.02
Results of Operations and Financial Condition.
On March 22, 2017 , Five Below, Inc. (the “Company”) issued a press release regarding its sales and earnings results for the thirteen and fifty-two weeks ended January 28, 2017 (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1, and is being furnished, not filed, under item 2.02 of this Current Report on Form 8-K. As previously announced, the Company has scheduled a conference call for 4:30 p.m. Eastern Time on March 22, 2017 to discuss the financial results.
 
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number
Exhibit Description
99.1
Press Release dated March 22, 2017 announcing the Company's fourth quarter and fiscal 2016 financial results.


 





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
Five Below, Inc.
Date: March 22, 2017
 
 
 
 
  By:
/s/ Kenneth R. Bull
 
 
 
 
 
 
Name:
 
Kenneth R. Bull
 
 
 
 
 
 
Title:
 
Chief Financial Officer and Treasurer







EXHIBIT INDEX
 
Exhibit Number
Exhibit Description
99.1
Press Release dated March 22, 2017 announcing the Company's fourth quarter and fiscal 2016 financial results.





 

FIVEBELOWLOGO07.JPG
NEWS RELEASE
Five Below, Inc. Announces Fourth Quarter and Fiscal 2016 Financial Results
Reports fourth quarter sales growth of 19% to $388.1 million ; diluted EPS increase of 17% to $0.90
Reports fiscal 2016 sales growth of 20% ; diluted EPS increase of 24% to $1.30
Provides first quarter and full year fiscal 2017 guidance

PHILADELPHIA , PA (March 22, 2017 ) – Five Below, Inc. (NASDAQ: FIVE) today announced financial results for the thirteen weeks and fifty-two weeks ended January 28, 2017 .


For the thirteen weeks ended January 28, 2017 :
Net sales increased 18.9% to $388.1 million from $326.4 million in the fourth quarter of fiscal 2015 ; comparable sales increased 1.0% .
Operating income increased 17.1% to $78.9 million from $67.4 million in the fourth quarter of fiscal 2015 .
The Company opened 5 net new stores and ended the quarter with 522 stores in 31 states. This represents an increase of 19.5% from the end of the fourth quarter of fiscal 2015 .
Net income was $49.8 million , an increase of 18.5% compared to $42.0 million in the fourth quarter of fiscal 2015 .
Diluted income per common share was $0.90 , an increase of 16.9% compared to $0.77 in the fourth quarter of fiscal 2015 .

For the fifty-two weeks ended January 28, 2017 :
Net sales increased 20.2% to $1,000.4 million compared to $832.0 million in the comparable period in fiscal 2015 ; comparable sales increased 2.0% .
Operating income increased 22.6% to $114.0 million compared to $92.9 million in the comparable period in fiscal 2015 .
The Company opened 85 net new stores compared to 71 net new stores opened in fiscal 2015 .
Net income was $71.8 million , an increase of 24.5% compared to $57.7 million in the comparable period in fiscal 2015 .
Diluted income per common share was $1.30 , an increase of 23.8% compared to $1.05 per share in the comparable period in fiscal 2015 .


Joel Anderson, CEO, stated: "Our performance in 2016 once again illustrates the strength, consistency and broad appeal of the Five Below model with a compelling merchandise assortment designed to 'wow' our customers at incredible values. We achieved another strong year of 20% sales growth, reaching the $1 billion milestone in sales as we opened 85 net new stores and delivered our 11th consecutive year of positive comparable sales growth. This top line performance was accompanied by operating leverage, while we continued to invest in the business, resulting in a 24% increase in EPS for 2016.”

"We are excited to be opening approximately 100 new stores this year and to bring our unique and differentiated concept to California. The strength of our business model, commitment to delivering unbelievable value to our customers and disciplined execution continue to drive our success. We have a strong track record as a leading high growth value retailer and remain on track to achieve our 20/20 through 2020 strategy."





First Quarter and Fiscal 2017 Outlook:
For the first quarter of fiscal 2017, net sales are expected to be in the range of $228 million to $232 million based on opening approximately 26 new stores and assuming a flat to 2% increase in comparable sales. Net income is expected to be in the range of $6.6 million to $7.6 million , with a diluted income per common share range of $0.12 to $0.14 on approximately 55.3 million estimated diluted weighted average shares outstanding.

The fiscal 2017 results will contain an additional, non-comparable week, or the "53rd week" in the fourth quarter. For the full year of fiscal 2017, net sales are expected to be in the range of $1.210 billion to $1.230 billion based on opening approximately 100 new stores and assuming a low single digit increase in comparable sales. Net income is expected to be in the range of $86.0 million to $89.5 million , with a diluted income per common share range of $1.55 to $1.61 on approximately 55.6 million estimated diluted weighted average shares outstanding. The 53rd week is expected to contribute approximately $15 million in sales and approximately $0.02 in diluted income per common share.


Conference Call Information:
A conference call to discuss the fourth quarter and full year fiscal 2016 financial results is scheduled for today, March 22, 2017, at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 913-312-1383 or 888-747-4626 approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.fivebelow.com in the investor relations section of the website.

A taped replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online and by dialing 412-317-6671 or 844-512-2921. The pin number to access the telephone replay is 5208595. The replay will be available until March 29, 2017.


Forward-Looking Statements:
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which reflect management's current views and estimates regarding the Company's industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. Investors can identify these statements by the fact that they use words such as "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future" and similar terms and phrases. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to risks related to the Company's strategy and expansion plans, risks related to the inability to successfully implement our expansion into online retail, risks related to our ability to select, obtain, distribute and market merchandise profitably, risks related to our reliance on merchandise manufactured outside of the United States, the availability of suitable new store locations and the dependence on the volume of traffic to our stores, risks related to the Company's continued retention of its executive officers, senior management and other key personnel, risks related to changes in consumer preferences and economic conditions, risks related to increased operating costs, including wage rates, risks related to extreme weather, risks related to the Company's distribution centers, risks related to our ability to successfully manage inventory balance and inventory shrinkage, quality or safety concerns about the Company's merchandise, increased competition from other retailers including online retailers, risks related to the seasonality of our business, risks related to cyber security, risks related to our ability to protect our brand name and other intellectual property, risks related to customers' payment methods, risks related to trade restrictions, and risks associated with leasing substantial amounts of space. For further details and a discussion of these risks and uncertainties, see the Company's periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission and available at www.sec.gov. If one or more of these risks or uncertainties materialize, or if any of the Company's assumptions prove incorrect, the Company's actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this news release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.







About Five Below:
Five Below is a rapidly growing specialty value retailer offering a broad range of trend-right, high-quality merchandise targeted at the teen and pre-teen customer. Five Below offers a dynamic, edited assortment of exciting products in a fun and differentiated store environment, all priced at $5 and below. Select brands and licensed merchandise fall into the Five Below worlds: Style, Room, Sports, Tech, Crafts, Party, Candy, and Now. Five Below was founded in 2002 and is headquartered in Philadelphia, Pennsylvania, with over 500 stores in 31 states. For more information, please visit www.fivebelow.com or come into one of our stores!


###
Investor Contact:
Five Below, Inc.
Christiane Pelz
215-207-2658
Christiane.Pelz@fivebelow.com

ICR, Inc.
Farah Soi/Caitlin Morahan
203-682-8200
Farah.Soi@icrinc.com/Caitlin.Morahan@icrinc.com

Media Contact:
ICR, Inc.
Jessica Liddell/Julia Young
203-682-8200
FivePR@icrinc.com






FIVE BELOW, INC.
Consolidated Balance Sheets
(Unaudited)
(in thousands)
 
 
 
January 28, 2017
 
January 30, 2016
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
76,088

 
$
53,081

Short-term investment securities
 
77,791

 
46,335

Inventories
 
154,448

 
148,370

Prepaid income taxes
 
1,552

 
1,341

Prepaid expenses and other current assets
 
29,910

 
15,618

Total current assets
 
339,789

 
264,745

Property and equipment, net
 
138,376

 
119,784

Deferred income taxes
 
11,039

 
8,507

Long-term investment securities
 
10,514

 

Other assets
 
818

 
258

 
 
$
500,536

 
$
393,294

 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
Current liabilities:
 
 
 
 
Line of credit
 
$

 
$

Accounts payable
 
51,178

 
58,225

Income taxes payable
 
23,939

 
11,942

Accrued salaries and wages
 
10,794

 
7,661

Other accrued expenses
 
30,652

 
24,368

Total current liabilities
 
116,563

 
102,196

Deferred rent and other
 
52,568

 
46,617

Total liabilities
 
169,131

 
148,813

Shareholders’ equity:
 
 
 
 
Common stock
 
549

 
546

Additional paid-in capital
 
321,603

 
306,522

Retained earnings (accumulated deficit)
 
9,253

 
(62,587
)
Total shareholders’ equity
 
331,405

 
244,481

 
 
$
500,536

 
$
393,294








FIVE BELOW, INC.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
 
 
 
Thirteen weeks ended
 
Fifty-two weeks ended
 
 
January 28, 2017
 
January 30, 2016
 
January 28, 2017
 
January 30, 2016
Net sales
 
$
388,090

 
$
326,351

 
$
1,000,410

 
$
831,954

Cost of goods sold
 
228,673

 
194,169

 
643,373

 
540,020

Gross profit
 
159,417

 
132,182

 
357,037

 
291,934

Selling, general and administrative expenses
 
80,552

 
64,816

 
243,075

 
198,993

Operating income
 
78,865

 
67,366

 
113,962

 
92,941

Interest income, net
 
88

 
28

 
299

 
40

Other expense
 

 

 

 
325

Income before income taxes
 
78,953

 
67,394

 
114,261

 
92,656

Income tax expense
 
29,165

 
25,390

 
42,421

 
34,976

Net income
 
$
49,788

 
$
42,004

 
$
71,840

 
$
57,680

Basic income per common share
 
$
0.91

 
$
0.77

 
$
1.31

 
$
1.06

Diluted income per common share
 
$
0.90

 
$
0.77

 
$
1.30

 
$
1.05

Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic shares
 
54,889,718

 
54,565,118

 
54,845,708

 
54,513,622

Diluted shares
 
55,157,603

 
54,820,282

 
55,128,870

 
54,793,301








FIVE BELOW, INC.

Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
 
 
 
Fifty-two weeks ended
 
 
January 28, 2017
 
January 30, 2016
Operating activities:
 
 
 
 
Net income
 
$
71,840

 
$
57,680

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
26,631

 
22,227

Share-based compensation expense
 
11,953

 
11,172

Deferred income tax benefit
 
(2,532
)
 
(626
)
Other non-cash expenses
 
109

 
59

Changes in operating assets and liabilities:
 
 
 
 
Inventories
 
(6,079
)
 
(32,718
)
Prepaid income taxes
 
(211
)
 
598

Prepaid expenses and other assets
 
(14,875
)
 
2,561

Accounts payable
 
(5,451
)
 
17,578

Income taxes payable
 
11,997

 
(2,500
)
Accrued salaries and wages
 
3,133

 
2,386

Deferred rent
 
7,855

 
6,398

Other accrued expenses
 
2,252

 
3,098

Net cash provided by operating activities
 
106,622

 
87,913

Investing activities:
 
 
 
 
Purchases of investment securities
 
(119,746
)
 
(46,335
)
Sales, maturities, and redemptions of investment securities
 
77,776

 

Capital expenditures
 
(44,794
)
 
(53,059
)
Net cash used in investing activities
 
(86,764
)
 
(99,394
)
Financing activities:
 
 
 
 
Net proceeds from issuance of common stock
 
208

 
178

Proceeds from exercise of options to purchase common stock
 
3,289

 
912

Common shares withheld for taxes
 
(1,904
)
 
(322
)
Excess tax benefit related to exercises of stock options, vesting of restricted stock units, and vesting of performance-based restricted stock units
 
1,555

 
608

Other
 
1

 

Net cash provided by financing activities
 
3,149

 
1,376

Net increase (decrease) in cash and cash equivalents
 
23,007

 
(10,105
)
Cash and cash equivalents at beginning of year
 
53,081

 
63,186

Cash and cash equivalents at end of year
 
$
76,088

 
$
53,081