Retailer Lays Out Big Growth Plans For 2023
This earnings season is set to be one of the most disappointing in a long time.
Consumers are getting crushed.
Inflation has destroyed savings and led to soaring credit card debt.
The housing market has cooled and prices are starting to drop.
Wage growth hasn’t kept up and is now slowing even more.
Everything's coming up negative for consumers.
But one retailer, Five Below (FIVE), is emerging as a bright spot in the tough economy.
And it’s laying out big plans for the future.
Five Below Is Looking Up
Five Below is one of the few bright spots in an otherwise dour holiday shopping season.
Consumers are largely focused on finding deals.
That’s why the Black Friday weekend was a huge sales period that got a lot of the financial community excited.
The entire shopping season, however, turned in a total increase of 7.6%.
After accounting for inflation, that’s nearly no growth in sales at all from the previous year.
Five Below was an exception.
The company posted 11% growth in holiday season sales.
But it’s just a jumping off point for the retailer.
Five Below has announced plans to open 200 more locations this year.
That’s a big addition on top of its 1200 existing stores.
But here’s the most interesting expansion plan that could really drive sales and earnings higher this year.
Five Below has tested out a “Five Beyond” segment within its stores.
This section is for products that cost more than $5, but are still cheap.
A couple examples from the company’s web site are a $25 robot vacuum and $10 earbuds (perfect price for kids that will inevitably lose them)
Was the test successful?
It must have been because the company said it’s going to add 400 “Five Beyond” sections to its stores this year.
Betting On Growth
Five Below has successfully carved out a niche within the retail segment.
Clearly, its product line-up and value-oriented focus works for millions of customers.
As consumers continue to downgrade lifestyles and cut back spending, Five Below’s addressable market will only expand.
It could be one of the big winners in an otherwise tough retail market.
If you’re looking for companies that can grow and expand in a tough economy, Five Below is one of the few companies that have it.
