Five Below's stock is tumbling in Friday premarket trading as the $5-and-under retailer lowered the high end of its fiscal fourth-quarter profit and revenue forecasts following slow holiday sales.
Five Below Inc. now foresees quarterly earnings between 59 cents and 60 cents per share on revenue in a range of $262 million to $263 million. The company's previous guidance was for earnings between 59 cents and 62 cents per share on revenue in a range of $262 million to $266 million.
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Five Below said that its revised outlook assumes an approximate 3 percent rise in sales at stores open at least a year. Its prior forecast assumed a 4 percent rise in the figure.
Sales at stores open at least a year is a key gauge of a retailer's health because they exclude results from stores recently opened or closed.
Five Below sells an array of items under $5, many of which are intended to appeal to teenagers. The chain has grown rapidly and went public in 2012.
Co-founder and CEO Thomas Vellios said in a statement on Thursday that Five Below's business was soft after Black Friday, and that continued into early December. Sales picked up closer to Christmas and after, he added.
For the nine weeks ended Jan. 3, sales at stores open at least a year climbed 3.2 percent. Revenue increased 24.5 percent to $230.7 million.
Shares of Five Below Inc. dropped $6.38, or 14.6 percent, to $37.25 before the market open.