FIVE: Decent Business At A Horrible Price
Mon, Oct. 17, 1:02 PM
- Investors appear to be a little edgy about the chain store sector with the earnings season just starting to ramp up.
- Dillard's (DDS -4.3%) and Bon-Ton Stores (BONT -5%) are down significantly, while Kohl's (KSS -1.3%), Big Lots (BIG -0.7%), Fred's (FRED -1.6%), Target (TGT -1.2%), Five Below (FIVE -2.6%), Pier 1 Imports (PIR -5.3%), and Barnes & Noble Education (BNED -2.4%) are all tracking below broad market averages.
- There isn't a lot of consensus about what's been holding back U.S. consumers. Today, higher gas prices is being floated around as a factor, while last week it was election anxiety.
- 12-month chart of gas prices in the U.S. via GasBuddy.
- Previously: Retail sales track higher as expected (Oct. 14)
- Previously: Winners and losers from the retail sales report (Oct. 14)
- ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, CNDF, FTXD, JHMC.
Thu, Oct. 13, 10:31 AM
- KeyBanc has discounters on its mind.
- Five Below (FIVE -0.9%) earns an Overweight rating and price target of $47 from the investment firm.
- Dollar Tree (DLTR) also catches an Overweight initiation. "DLTR is a compelling multi-faceted story, supported by a strong execution at legacy DLTR, as well as a synergy and turnaround story at legacy FDO, acquired in 2015," writes analyst Bradley Thomas.
- Dollar General (DG -0.6%) is started at Sector Weight.
- YTD comparison: FIVE +19.9%, DG -4.4%, DLTR +0.3% vs. S&P Retail ETF -0.5%.
Tue, Sep. 13, 10:56 AM
- MKM Partners backs up its bullish view on Five Below (FIVE -1.8%).
- Analysts don't think Five Below has a high degree of exposure from the Hanjin bankruptcy. They also point to a recent pickup in store traffic.
- The investment firm reiterates a Buy rating on Five Below and sets a $60 price target on the retailer.
- The lush PT implies almost 50% upside potential on Five Below from its current level and is well-above the 52-week high of $52.70.
Thu, Sep. 1, 9:24 AM
Wed, Aug. 31, 5:35 PM
Wed, Aug. 31, 4:46 PM
- Five Below (NASDAQ:FIVE) reports operating income increased 36% in Q2 to $15.7M.
- Comparable sales were up 3.9% during the quarter.
- The company ended the quarter with 491 stores, up 33 from last year's count.
- Guidance from Five Below: FY16 revenue $1B-$1.009B vs. $1.01B consensus, EPS of $1.28-$1.32 vs. $1.31 consensus.
- Previously: Five Below beats by $0.01, beats on revenue (Aug. 31)
- FIVE -4.47% AH to $42.52.
Wed, Aug. 31, 4:02 PM
Tue, Aug. 30, 5:35 PM
Fri, Aug. 26, 8:18 AM
- Disappointing earnings reports from Dollar Tree (NASDAQ:DLTR) and Dollar General (NYSE:DG) have thrown a spotlight back on the reduced amount of benefits being paid out from the Supplemental Nutrition Assistance Program. While health care cost inflation is a major consideration for retailers with a high mix of low-income customers, the SNAP program factors in as well.
- The issue has been used by executives in the retail sector sporadically in the past as an excuse/explanation for soft sales, but it has added significance in an election year. Both Donald Trump and Hillary Clinton have promised to improve the food stamp program, although in different manners.
- The companies listed below talked about the impact of food stamps on their recent earnings conference calls.
- SpartanNash Company Earnings Call Transcript
- Alimentation Couche-Tard Earnings Call Transcript
- Papa Murphy's Earnings Call Transcript
- Dollar Tree Earnings Call Transcript
- Dollar General Earnings Call Transcript
- Related stocks: BIG, FIVE, WMT.
Thu, Aug. 25, 9:35 AM
- A common theory from analysts is that dollar stores are in the sweet spot of retail - somewhat shielded from the Amazon Effect and geared toward a demographic in which consumers are seeing a meaningful benefit from higher wages and low gas prices.
- That premise could be questioned after discounters Dollar Tree (DLTR -6.9%) and Dollar General (DG -10.8%) both disappointed with their Q2 earnings and were perhaps surprisingly outperformed by retail giant Wal-Mart (WMT +0.2%).
- Though the reporting periods don't match up exactly, Wal-Mart showed a 1.6% increase in U.S. comparable sales in Q2 to top Dollar General's 0.7% mark and Dollar Tree's 1.2% pace. It should be noted that at Wal-Mart's scale every basis point of comp gain means a significant amount of extra revenue to help lever down costs.
- In early trading, Five Below (FIVE -3.7%) and Big Lots (BIG -3.4%) are both lower due to the dollar store earnings disappointment.
Wed, Aug. 17, 10:18 AM
- Data from the National Retail Federation indicates shoppers may be holding back on their back-to-school shopping despite the earlier push by retailers.
- A NRF survey showed 48% of families have completed the BTS task, compared to 50% at the same point in time a year ago.
- It's a bit of good news for chains hoping that the huge Amazon Prime Day sales event didn't dominate the crucial season.
- The NRF reports that 53% of consumers are heading to discount stores (FIVE, DG, DLTR) for part of their school shopping.
- National Retail Federation press release
Fri, Aug. 5, 9:52 AM
- Five Below (NASDAQ:FIVE) is up 4% in early trading to jump back over $50.
- UBS is out with some commentary on how the Pokémon effect for the retailer isn't being appreciated by investors (h/t Hidden Gem Trades).
- Presumably, the investment firm is referring to the assortment of Pokémon trading cards and accessories it sells.
Mon, Jun. 13, 11:14 AM
- The strong performance of the dollar stores sector amid a choppy retail environment is due in part to the format's popularity across different household income levels, according to data from NPD Group.
- 19% of spending at dollar stores for a 12-month period ending in April came from households with more than $100K in income. 33% of the sales brought in over the same period were from households with over $75K in income. The same effect is being felt at some specialty retailers and other discounters which are drawing more traffic from higher-income consumers than some anticipated.
- Dollar Tree (DLTR -0.2%), Dollar General (DG -0.4%), Fred's (FRED -0.3%), Big Lots (BIG -2.5%), Five Below (FIVE -0.5%), and Party City (PRTY -0.9%) have all outperformed the broad-based S&P 500 Retail ETF (NYSEARCA:XRT) over the last 90 days.
Thu, Jun. 2, 4:02 PM
Wed, Jun. 1, 5:35 PM
Tue, May 31, 11:45 AM
- Five Below (FIVE +0.6%) will launch its first store in Oklahoma with an opening in Oklahoma City later this week. Oklahoma is the 29th state where Five Below has a physical presence.
- A second store in Oklahoma is planned for later in the month in Edmond.
- Shares of Five Below rose 9% last week after several discounters reported solid earnings.