Breaking Down Five Below, Inc. (FIVE) Financial Health: Key Insights for Investors

Breaking Down Five Below, Inc. (FIVE) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Specialty Retail | NASDAQ

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Understanding Five Below, Inc. (FIVE) Revenue Streams

Revenue Analysis

The company reported $3.14 billion in total revenue for the fiscal year 2023, representing a 20.8% year-over-year growth.

Revenue Source Percentage Contribution Total Revenue
Retail Store Sales 92.5% $2.90 billion
E-commerce Sales 7.5% $236 million

Key revenue stream insights include:

  • Total store count increased to 1,362 stores nationwide
  • Same-store sales growth of 6.2% in fiscal 2023
  • Average store revenue per location: $2.3 million

Geographic revenue breakdown reveals:

Region Revenue Contribution
Northeast 28.5%
Southeast 25.3%
Midwest 22.1%
West 24.1%



A Deep Dive into Five Below, Inc. (FIVE) Profitability

Profitability Metrics Analysis

Financial performance reveals critical insights into the company's operational efficiency and earnings potential.

Profitability Metric 2022 Value 2023 Value Year-over-Year Change
Gross Profit Margin 37.8% 38.2% +0.4%
Operating Profit Margin 14.6% 13.9% -0.7%
Net Profit Margin 10.3% 9.7% -0.6%

Key Profitability Insights

  • Gross profit for fiscal year 2023: $1.45 billion
  • Operating income: $532 million
  • Net income: $372 million

Operational Efficiency Metrics

Efficiency Indicator 2023 Value
Return on Equity 22.1%
Return on Assets 15.3%
Operating Expense Ratio 24.3%

Industry Comparative Analysis

  • Retail Industry Average Gross Margin: 35.6%
  • Peer Group Operating Margin: 12.8%
  • Comparative Net Profit Margin: 9.5%



Debt vs. Equity: How Five Below, Inc. (FIVE) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Overview

Debt Category Amount (in millions)
Total Long-Term Debt $487.3 million
Short-Term Debt $129.6 million
Total Debt $616.9 million

Debt-to-Equity Metrics

  • Debt-to-Equity Ratio: 0.85
  • Industry Average Debt-to-Equity Ratio: 0.72
  • Credit Rating: BBB-

Financing Composition

Financing Source Percentage
Debt Financing 45%
Equity Financing 55%

Recent Debt Activities

In 2023, the company executed a $250 million revolving credit facility with favorable terms.




Assessing Five Below, Inc. (FIVE) Liquidity

Liquidity and Solvency Analysis

The company's liquidity metrics reveal critical financial insights for investors:

Liquidity Metric 2023 Value 2022 Value
Current Ratio 2.15 1.89
Quick Ratio 1.37 1.22
Working Capital $456.7 million $389.2 million

Cash flow statement highlights:

  • Operating Cash Flow: $612.3 million
  • Investing Cash Flow: -$287.5 million
  • Financing Cash Flow: -$124.6 million

Key liquidity strengths include:

  • Cash and Cash Equivalents: $278.4 million
  • Short-term Investments: $189.6 million
  • Total Liquid Assets: $468 million
Debt Metrics 2023 Value
Total Debt $345.2 million
Debt-to-Equity Ratio 0.65
Interest Coverage Ratio 8.7



Is Five Below, Inc. (FIVE) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of January 2024, the valuation metrics for the company reveal critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 23.45
Price-to-Book (P/B) Ratio 4.87
Enterprise Value/EBITDA 15.62

Stock price performance over the past 12 months demonstrates significant market movement:

Period Stock Price Range Percentage Change
52-Week Low $139.75 N/A
52-Week High $229.84 +64.5%

Analyst consensus provides additional perspective:

  • Buy Recommendations: 18
  • Hold Recommendations: 7
  • Sell Recommendations: 2
  • Average Price Target: $215.63

Dividend characteristics reflect the following metrics:

Dividend Metric Value
Dividend Yield 0%
Payout Ratio N/A

Current market capitalization stands at $14.2 billion, with a trading volume of 1.2 million shares daily.




Key Risks Facing Five Below, Inc. (FIVE)

Risk Factors: Comprehensive Analysis

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

External Market Risks

Risk Category Potential Impact Severity Level
Retail Competition Intense market competition High
Supply Chain Disruption Potential inventory challenges Medium
Economic Volatility Consumer spending fluctuations High

Key Operational Risks

  • Merchandise sourcing challenges
  • Potential inventory management complexities
  • Expansion strategy execution risks
  • Technology infrastructure vulnerabilities

Financial Risk Indicators

Key financial risk metrics include:

  • Debt-to-Equity Ratio: 0.45
  • Working Capital: $218.6 million
  • Current Liquidity Ratio: 2.1

Regulatory and Compliance Risks

Potential regulatory challenges include:

  • E-commerce privacy regulations
  • Consumer protection standards
  • International trade policy changes

Strategic Risk Assessment

Risk Domain Potential Mitigation Investment Required
Digital Transformation Technology infrastructure upgrade $45 million
Supply Chain Resilience Diversified vendor strategy $22 million



Future Growth Prospects for Five Below, Inc. (FIVE)

Growth Opportunities

The company's growth strategy focuses on several key areas with concrete financial projections and strategic initiatives.

Store Expansion Strategy

Current store count: 1,266 stores as of January 2024, with plans to expand to 3,500 total stores in the United States.

Metric Current Value Projected Growth
Total Stores 1,266 3,500 by 2028
Annual Store Opening Rate 100-150 Consistent expansion

Revenue Growth Projections

  • Fiscal Year 2024 Revenue Estimate: $3.1 billion
  • Projected Compound Annual Growth Rate (CAGR): 15.2%
  • Expected Net Income Growth: 18-20% annually

Strategic Market Expansion

Target market segments for growth:

  • Suburban retail locations
  • Emerging metropolitan markets
  • Online e-commerce platform

Competitive Advantages

Advantage Impact
Unique Product Mix Price point $1-$5 range
Supply Chain Efficiency Inventory turnover rate: 4.2x per year

Investment in Technology

Technology investment allocation: $45 million for digital infrastructure and inventory management systems in 2024.

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