Five Below(US:FIVE)2025-12-04 19:49Store Operations - As of November 1, 2025, the company operated 1,907 stores across 44 states[93] - The company expects a significant percentage of net sales to continue coming from new stores not included in comparable sales[103] - The company plans to invest approximately $200 million in cash capital expenditures for fiscal 2025, primarily for the construction and opening of about 150 net new stores[131] - The company entered into 102 new retail leases with average terms of approximately 10 years, resulting in future minimum lease payments of approximately $193.5 million[145] Financial Performance - Net sales increased to $1,038.3 million for the thirteen weeks ended November 1, 2025, up 23.1% from $843.7 million for the same period in 2024, driven by a comparable sales increase of $113.8 million and a non-comparable sales increase of $80.8 million[114] - Comparable sales rose by 14.3%, attributed to a 7.2% increase in the number of transactions and a 6.7% increase in the average dollar value of transactions[115] - Gross profit for the thirteen weeks ended November 1, 2025, was $351.4 million, reflecting a 36.2% increase from $258.0 million, with gross margin improving to 33.8% from 30.6%[117] - Selling, general and administrative expenses rose to $308.1 million, a 19.1% increase from $258.6 million, while as a percentage of net sales, these expenses decreased to 29.7% from 30.7%[118] - Net income surged to $36.5 million for the thirteen weeks ended November 1, 2025, compared to $1.7 million in the prior year, marking an increase of $34.8 million[121] - For the thirty-nine weeks ended November 1, 2025, net sales reached $3,035.7 million, up 22.1% from $2,485.6 million, driven by a non-comparable sales increase of $282.6 million and a comparable sales increase of $267.5 million[122] - Net income for the thirty-nine weeks ended November 1, 2025, increased to $120.4 million, an 82.0% rise from $66.2 million in the same period of 2024[129] Costs and Expenses - Cost of goods sold increased to $686.9 million, a 17.3% rise from $585.7 million, primarily due to higher merchandise costs and store occupancy costs from new store openings[116] - SG&A expenses are expected to increase in future periods due to ongoing store growth[109] Cash Flow and Financing - Net cash provided by operating activities for the thirty-nine weeks ended November 1, 2025, was $145.5 million, an increase of $78.4 million compared to the same period in 2024[138] - Net cash used in investing activities for the thirty-nine weeks ended November 1, 2025, was $121.7 million, an increase of $91.0 million compared to the same period in 2024[139] - Net cash used in financing activities for the thirty-nine weeks ended November 1, 2025, was $4.6 million, a decrease of $41.9 million compared to the same period in 2024[140] - As of November 1, 2025, the company had approximately $220 million available under its Revolving Credit Facility, with no direct borrowings outstanding[133] - The company had approximately $220 million available on its line of credit, net of $5 million in outstanding letters of credit[152] - The interest rate on borrowings under the Revolving Credit Facility ranges from a base rate plus an applicable margin of 0.125% to 0.50% or SOFR plus a margin of 1.12% to 1.50%[152] - The company does not expect an immediate 100 basis point change in interest rates to materially affect its cash flows or operating results due to the short-term nature of its investment portfolio[150] Risks and Challenges - The company faces risks such as inflation, supply chain disruptions, and increased competition from other retailers[91] - The company’s business is affected by various factors including consumer preferences, competition, and economic trends[106] - The company seeks to minimize the impact of inflation on its operations by sourcing from different vendors and changing its product mix[153] Operational Efficiency - Operating income is used as an indicator of business productivity and ability to manage SG&A expenses[110] - The increase in operating cash flows was primarily due to improved store performance, offset by higher income taxes paid and changes in working capital[138] - Gross profit is calculated as net sales minus cost of goods sold, with gross margin being gross profit as a percentage of net sales[104]