Dhirendra Tripathi
Investing.com – Despite a blowout quarter, management's lack of full-year guidance sank Five Below (NASDAQ:FIVE) shares on Thursday.
The stock fell 3% in morning trade. A robust outlook for February through April was also not adequate to sooth traders’ nerves.
Berenberg Bank analyst Brian McNamara maintained a hold rating on the stock and a price target of $143. This is a 24% downside from the prevailing price.
In a note to investors, the analyst said, “As Five is currently operating from a position of strength, we were disappointed the company offered no full-year guidance, even if it was perhaps a wider range of outcomes than typical. Management candidly pointed to many unknowns this year, and we believe there is a reasonable expectation internally for some meaningful mean reversion in H2 as external tailwinds wane.”
The company announced its results for the fiscal fourth quarter on Wednesday. Revenue jumped about 25% year-on-year, to $858.5 million and were above consensus estimates of $838.3 million.
Net income rose 12.3%, to $123.9 million from $110.4 in the January quarter a year ago.
For February through April, the company expects sales in the range of $540 million to $560 million, higher than analysts’ expectations of about $440.9 million
The shares of the specialty discount store operator have trebled this year, bolstered by pandemic-induced shopping.