Five Below (NASDAQ:FIVE), Inc. FIVE is likely to register an increase in the top line when it reports third-quarter fiscal 2021 results on Dec 1, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $562.7 million, suggesting an improvement of 18.1% from the prior-year reported figure.
Meanwhile, the Zacks Consensus Estimate for third-quarter earnings per share has been stable at 29 cents over the past 30 days. The figure indicates a decline of 19.4% from the prior-year quarter.
Notably, the bottom line of this extreme-value retailer for tweens, teens and beyond has surpassed the Zacks Consensus Estimate by a margin of 3.6% in the last reported quarter.
Factors to Note
Five Below’s third-quarter performance is likely to have benefited from its focus on providing trend-right products, strengthening digital capabilities and delivering better WOW products. The company has been enhancing in-store experience to draw traffic and expand the customer base.
Without doubt, the company’s favorable pricing strategy, and commitment toward improvising merchandise assortment and achieving efficient cost structure have been commendable. It has been digitizing vendor transactions, implementing core merchandizing platform and applying cloud-based data and analytics to analyze demand, and accordingly manage inventory.
On its last earnings call, management guided net sales in the range of $550 million to $565 million for the third quarter, which suggests an increase from $476.6 million in the year-ago period. It forecast mid-single digit growth in comparable sales.
Clearly, aforementioned factors raise optimism about the outcome of the results. However, margins still remain an area to watch. Impact of costs associated with digital fulfilment and supply chain cannot be ruled out.
The company is navigating through a tight supply chain environment across the retail landscape, resulting in higher inbound freight costs. These are likely to put pressure margins, and in turn the bottom line. The company had projected earnings between 23 cents and 30 cents a share for the quarter under discussion, which is down from 36 cents reported in the year-ago period.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Five Below this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Five Below has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
PVH Corp (NYSE:PVH). PVH currently has an Earnings ESP of +1.61% and a Zacks Rank #2. The company is expected to register bottom-line growth when it reports third-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings of $2.07 per share suggests growth of 56.8% from the year-ago quarter’s reported figure.
PVH Corp.’s top line is expected to rise year over year. The consensus mark for revenues is pegged at $2.40 billion, indicating an increase of 13.4% from the figure reported in the year-ago quarter. PVH has a trailing four-quarter earnings surprise of 177.5%, on average.
G-III Apparel GIII currently has an Earnings ESP of +8.14% and a Zacks Rank #3. The company is likely to register bottom-line improvement when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share is pegged at $1.79, which suggests growth of 36.6% from the year-ago quarter’s reported figure.
G-III Apparel’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.01 billion, which indicates an improvement of 22.4% from the figure reported in the prior-year quarter. GIII has a trailing four-quarter earnings surprise of 180.5%, on average.
Costco COST currently has an Earnings ESP of +1.00% and a Zacks Rank #3. The company is expected to register bottom-line growth when it reports first-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings of $2.59 per share suggests growth of 13.1% from the year-ago quarter’s reported figure.
Costco’s top line is also expected to rise year over year. The consensus mark for revenues stands at $49.6 billion, indicating an increase of 14.8% from the figure reported in the year-ago quarter. COST has a trailing four-quarter earnings surprise of 7.7%, on average.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Costco Wholesale Corporation (NASDAQ:COST): Free Stock Analysis Report
PVH Corp. (PVH): Free Stock Analysis Report
GIII Apparel Group, LTD. (GIII): Free Stock Analysis Report
Five Below, Inc. (FIVE): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research