Five Below Spins Its Way To A Q1 Beat

Strong first-quarter results from Five Below Inc (NASDAQ: FIVE) reflect a strong core business, said BTIG analyst Alan Rifkin. 

The retailer reported an operating EPS of $0.15 — above BTIG's $0.14 estimate and the Street estimate of $0.13. 

Five Below's first quarter was tracking to a 2-percent comp "even before the spinner fad took off in April," Rifkin said in a Thursday note. The company ended the quarter with 2.6 percent comp growth.

BTIG has a Neutral on Five Below.

The Fidget Spinner Craze Helped Drive Growth, But For How Long?

Guidance for the second quarter has been raised, and the company projects revenue, EPS and comps to increase more than originally anticipated, according to BTIG.

"Guidance does not anticipate the spinner trend continuing beyond Q2 and management noted most fads last one to two quarters, though spinners appear to have broad-based popularity and good potential longevity," Rifkin said. 

The company knows how to handle trend products after past experience with Rainbow Loom, Silly Bandz and Frozen, he said. 

"We believe management will capably maximize the spinner trend." 

At Jefferies, analyst Daniel Bindersaid Five Below is well-positioned to benefit from the fidget spinner fad "that is sweeping the country."

Five Below’s Outlook

Five Below opened nine stores in the Los Angeles area on April 21, and the locations are all already receiving strong traffic and performing well, according to to the BTIG note. The launch in California follows Five Below’s mission of growing into new markets.

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