Five Below (FIVE) - Get Report, the retailer focused on $5-to-$10 products for tweens and teens, cut its financial outlook for its fiscal fourth quarter, citing fewer holiday-period sales days and weaker-than-expected sales.
Five Below shares were down 20% at $97.21 in trading Monday.
The Philadelphia chain, operating 900 stores in 36 states, now expects to report net income of $1.93 to $1.96 a share for the quarter.
Sales should come in at $685 million to $688 million as comparable-store sales decline 2% to 2.5%.
In early December, Five Below had estimated fourth-quarter net income at $1.97 to $2.05 a share. It pegged sales to come in at $717 million to $732 million with comparable sales up 2% to 3%.
A survey of analysts by FactSet had produced a consensus estimate of $2.02 a share of profit on $729 million of sales, with comparable-store sales rising 2.8%.
During the holiday period, Nov. 3 through Jan. 4, sales advanced more than 13% while comparable-store sales dropped 2.6%, Five Below reported.
"Despite the sales shortfall, strong inventory management and disciplined cost control has us on track to end the quarter with gross margin in line with our expectations and to deliver earnings per share near the low end of our previous guidance range," President and CEO Joel Anderson said in a statement.
Five Below plans to open 180 new stores in 2020. Anderson also said the company had acquired an e-commerce platform, fulfillment operation and certain other assets from hollar.com, expanding Five Below's digital capabilities.
Hollar is an online retailer of a wide variety of low-priced gifts and consumer products.
In the year-earlier fiscal fourth quarter, Five Below earned $1.59 a share on sales of $602.7 million.
In the year through Friday, Five Below shares had risen 5.2%. They touched a 52-week high above $148 in late April.