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$FIVE ended 1Q16 with approx. $25.8MM in cash and cash equivalents, $55.9MM in short-term investment securities, availability of $20MM under its revolving credit facility and no debt. Inventory at the end of 1Q16 was $156.3MM versus $119.8MM at the end of 1Q15.
$FIVE expects its results in the high end of the previously provided guidance, with net sales in the range of $491-503MM, comp store sales increase in the range of 4-6% and diluted EPS in the range of $1.09-1.16 for 4Q17. For FY17, $FIVE expects net sales of $1.264-1.276Bil, comp sales increase of 5.7-6.5% and diluted EPS of $1.72-1.79.
For FY17, net sales are expected to be in the range of $1.264-1.276Bil based on opening 103 net new stores and assuming a 5.7-6.5% increase in comparable sales for $FIVE. Net income is expected to be in the range of $95.9-99.7MM, with a diluted income per common share of $1.72-1.79.
For 4Q17, $FIVE net sales are expected to be in the range of $491-503MM and assuming a 4-6% increase in comparable sales. Net income is expected to be in the range of $60.8-64.6MM, with a diluted income per common share range of $1.09-1.16.
For 3Q17, $FIVE expects modest leverage from an operating margin perspective, which will be driven by leverage in SG&A. At present, the company does not see meaningful leverage coming out of GM in 3Q17. For FY17, $FIVE would expect to see modest operating margin leverage along with slight leverage in SG&A and gross margin.
$FIVE has remodeled four stores at present. The company is planning an identical store format for all its 100 new stores in 2017. $FIVE plans to run it through the holidays and monitor the monthly sales and customer transaction trends. Initial reads are positive. $FIVE believes 2018 will be a transition year and 2019 will see a rollout phase.
In 2Q17, $FIVE’s gross profit increased 34.3% to $98.5MM from 2Q16. GM grew by about 145BP to 34.8%, due primarily to improved merchandise margins from higher-margin spinner sales and leveraging of store occupancy and distribution costs. Inventory at 2Q17-end was $184.5MM versus $154.8MM at 2Q16-end.
During 2Q17, in marketing, $FIVE continued to optimize its mix of traditional and digital media to increase brand awareness and traffic. With regards to other digital initiatives, $FIVE is testing various mobile and social media campaigns. $FIVE believes its e-commerce channel provides an easy, mobile shopping tool for digitally-savvy customers.
For 3Q17, $FIVE expects net sales to be $241-246MM, assuming a 3-5% increase in comparable sales. Net income is expected to be $6.2-7.4MM with diluted EPS of $0.11-0.13. For FY17, net sales are expected to be $1.23-1.24Bil, assuming a 3.5-4.5% increase in comparable sales. $FIVE expects net income to be $90.3-92.6MM and EPS to be $1.62-1.66.
$FIVE reported an increase in 2Q17 earnings helped by higher sales and strong margin expansion. Net income was $16.8MM or $0.30 per share compared to $9.8MM or $0.18 per share in 2Q16. Net sales grew 28.7% to $283.3MM from 2Q16, led by strong new store performance and transaction-driven comparable sales growth of 9.3%.
For FY17, $FIVE expects net sales to be in the range of $1.227-1.242Bil based on opening approx. 100 new stores and assuming a 3-4% increase in comparable sales. Net income is expected to be in the range of $88.4-91.1MM and diluted EPS is expected in the range of $1.59-1.64 on approx. 55.6MM estimated diluted weighted average shares outstanding.
For 2Q17, $FIVE expects net sales to be in the range of $273-280MM based on opening of approx. 27 new stores and assuming a 5-8% increase in comparable sales. Net income for 2Q17 is expected to be in the range of $13.4-14.7MM and diluted EPS to be within $0.24-0.27 on approx. 55.4MM estimated diluted weighted average shares outstanding.
Specialty retailer $FIVE reported higher 1Q17 earnings, driven by higher revenue and operating income. Net income for the quarter increased 24.16% to $8.39MM or $0.15 per share from $6.75MM or $0.12 per share a year ago. Revenue for the quarter increased 20.84% to $232.88MM. Operating income increased 18.9% to $12.8MM.
In FY17, $FIVE expects to open approx. 60% of new stores in 1H17, in line with the percentage of new stores opened in 1H16. The majority of new stores will be in the existing markets and states with one new state being California. CapEx is targeted around $78MM, reflecting the opening of 100 new stores and investing in systems and infrastructure.