Five Below Inc., which reported its fourth-quarter results late Wednesday, according to Jefferies equity analyst Randall Connick. Performing well in a challenging economic environment. The teen-centric retailer’s stock fell in extended trading Wednesday after Five Below Five, -3.55% disappointed Wall Street with full-year estimates. Shares were down 3% before the market opened on Thursday. The fourth-quarter results “show that the business is a stable ship navigating choppy seas,” Koenig wrote in a note released Thursday, adding that Five Below’s fourth-quarter results “exceeded sales and comps.” [consensus]with [management] Highlighting strong transaction growth and outperformance across multiple categories.” Related: Five Below shares sink on forecast Set against this backdrop, as the retailer leans toward higher-priced goods, Jefferies raised its Five Below price target to $222 from $215. However, Connick said the company’s “relatively conservative” first-quarter outlook could weigh on shares. “That said, with the top-line remaining healthy, margin recapture ahead, and no debt on the balance sheet, we believe these results offer investors a value-oriented business at an attractive price,” he added. In a statement accompanying fourth-quarter results, Five Below CEO Joel Anderson said the company plans to open 200 new stores and convert 400 stores to its higher-priced Five Beyond format. As of January 28, Five Bills had 1,340 stores in 42 states, an increase of 12.6% over the same period last year. “We like [Five Below’s] The value-oriented offering, nimble and scaling business model, ample opportunity for further real estate growth, and upside potential offered by Five Beyond,” wrote Connick. “We see a visible path [Five Below’s] A long-term store count target of 3,500 units, which we believe may be conservative, should increase the inclusion of higher price-point products in its assortment. [the company’s] Provides value and offers many benefits.” Read now: As consumers pull back on discretionary spending, what’s next for retail? The retailer’s stock is up 12% in 2023, leading the S&P 500’s SPX, up 1.4% -0.26%. Of the 26 analysts surveyed by FactSet, 22 have an overweight or buy rating, three have a hold rating and one has a five-under rating.
