Why Five Below, Inc. Stock Jumped 12% in March

What: Specialty retailer Five Below's stock rose 12% during the month of March, according to S&P Capital IQ data.

FIVE data by YCharts

So what: The bounce was powered by two factors: weak expectations and strong fourth-quarter results. Heading into Five Below's earnings report, investors were bracing for the worst. In fact, the stock in early March fell below $30 per share for the first time since 2012.

But the retailer surprised Wall Street analysts on March 25 by posting a 24% fourth-quarter sales gain and a 30% rise in adjusted earnings. Even better, comparable-store sales rose by 3% -- twice the pace of the prior quarter. That hefty comps improvement suggests that shopper traffic is growing at Five Below's 366 locations across the U.S.

Now what: Management provided a 2015 forecast that calls for comps growth of 3%, which would keep up the solid pace from the quarter that just closed. Overall revenue should climb to as high as $824 million, the company says, boosted by the opening of 70 new locations this year. If Five Below hits that sales figure, management will have engineered another year of 20% or higher sales gains. And earnings are expected to reach $1.04 per share in 2015, up 17% from last year.

The article Why Five Below, Inc. Stock Jumped 12% in March originally appeared on Fool.com.

Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Five Below. The Motley Fool is short Five Below. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.