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Jim Cramer Wishes He Bought Five Below Stock

Jim Cramer breaks down why he wish he bought Five Below after earnings.

Five Below fell well below expectations when it reported earnings after Tuesday’s closing bell

The discount store reported a first quarter loss of 91 cents per share, exceeding an estimated loss of 25 cents per share. Revenue fell 44.9% from the prior year to $200.9 million, also missing estimates of $230.6 million.

Same-store sales fell 51.8% as Five Below Stores closed their doors on March 20 amid the coronavirus pandemic. “The challenges of the last few months were unprecedented. We temporarily closed stores on March 20th as we joined many other retailers in doing our part to help stop the spread of COVID-19. This decision had significant financial ramifications, but the health and safety of our customers and crew are our priority. During this period with stores closed, we worked very quickly yet carefully to implement safety protocols for reopening,” Five Below president and CEO Joel Anderson said in the earnings release.

While the company didn’t provide guidance, it confirmed plans to open 100 to 120 net new stores in 2020.

90% of Five Below retail locations have currently reopened. “We are very pleased with the initial sales trends we are seeing as stores reopen, and I am really proud of how our team is adjusting to the new environment. Agility, flexibility and innovation, along with extremely disciplined cost and capital management, are inherent to our model and how we have always operated,” Anderson said. 

Jim Cramer said it was Five Below's status as a non-essential business that hurt the retailer. Cramer concluded that the stock is a buy that he wishes he made. 

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