five-20221029

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(mark one)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 29, 2022.

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35600

Five Below, Inc.

(Exact name of Registrant as Specified in its Charter)


Pennsylvania						75-3000378
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

701 Market Street
Suite 300
Philadelphia
Pennsylvania						19106
(Address of Principal Executive Offices)						(Zip Code)

(215) 546-7909

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	FIVE	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of November 30, 2022 was 55,513,690.


INDEX

PART I - FINANCIAL INFORMATION		Page
Item 1.	Consolidated Financial Statements (unaudited)	4
	Unaudited Consolidated Balance Sheets as of October 29 , 2022, January 29, 2022 and October 30 , 2021	4
	Unaudited Consolidated Statements of Operations for the Thirteen and T hirty-Nine Weeks Ended October 29 , 2022 and October 30 , 2021	5
	Unaudited Consolidated Statements of Shareholders' Equity for the Thirteen and T hirty-Nine Weeks Ended October 29 , 2022 and October 30 , 2021	6
	Unaudited Consolidated Statements of Cash Flows for the T hirty-Nine Weeks Ended October 29 , 2022 and October 3 0 , 2021	8
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	28

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

FIVE BELOW, INC.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)


	October 29, 2022		January 29, 2022		October 30, 2021
Assets
Current assets:
Cash and cash equivalents	$	44,229	$	64,973	$	86,753
Short-term investment securities	72,722		277,141		224,563
Inventories	701,561		455,104		521,107
Prepaid income taxes and tax receivable	25,389		11,325		24,013

Prepaid expenses and other current assets	113,147		96,196		77,480
Total current assets	957,048		904,739		933,916
Property and equipment, net of accumulated depreciation and amortization of $439,890, $363,254, and $340,637, respectively.	880,469		777,497		728,319
Operating lease assets	1,312,437		1,151,395		1,151,632

Long-term investment securities	—		37,717		—
Other assets	13,761		9,112		9,585
	$	3,163,715	$	2,880,460	$	2,823,452

Liabilities and Shareholders’ Equity
Current liabilities:
Line of credit	$	—	$	—	$	—

Accounts payable	279,836		196,461		253,817
Income taxes payable	—		28,096		811
Accrued salaries and wages	14,140		53,539		28,697
Other accrued expenses	152,260		145,268		167,468
Operating lease liabilities	193,614		163,537		162,809

Total current liabilities	639,850		586,901		613,602

Other long-term liabilities	4,307		1,663		1,536
Long-term operating lease liabilities	1,293,692		1,135,456		1,137,658
Deferred income taxes	41,378		36,156		37,407
Total liabilities	1,979,227		1,760,176		1,790,203
Commitments and contingencies (note 6)
Shareholders’ equity:
Common stock, $0.01 par value. Authorized 120,000,000 shares; issued and outstanding 55,512,425, 55,662,400, and 56,025,753 shares, respectively.	555		556		560
Additional paid-in capital	254,663		280,666		333,823
Retained earnings	929,270		839,062		698,866
Total shareholders’ equity	1,184,488		1,120,284		1,033,249
	$	3,163,715	$	2,880,460	$	2,823,452

See accompanying notes to consolidated financial statements.

FIVE BELOW, INC.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Net sales	$	645,034	$	607,645	$	1,953,557	$	1,852,022
Cost of goods sold	437,226		405,283		1,310,463		1,218,472
Gross profit	207,808		202,362		643,094		633,550
Selling, general and administrative expenses	186,874		159,913		523,820		441,246
Operating income	20,934		42,449		119,274		192,304
Interest income (expense) and other income (expense), net	483		(10,624)		341		(12,672)


Income before income taxes	21,417		31,825		119,615		179,632
Income tax expense	5,271		7,648		29,407		41,018
Net income	$	16,146	$	24,177	$	90,208	$	138,614





Basic income per common share	$	0.29	$	0.43	$	1.62	$	2.48
Diluted income per common share	$	0.29	$	0.43	$	1.62	$	2.46

Weighted average shares outstanding:
Basic shares	55,509,525		56,023,961		55,551,382		56,001,437
Diluted shares	55,683,609		56,340,635		55,720,792		56,305,456

See accompanying notes to consolidated financial statements.

FIVE BELOW, INC.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands, except share data)


	Common stock	Additional paid-in capital	Retained earnings	Total shareholders’ equity

								Shares			Amount

Balance, January 29, 2022			55,662,400	$	556	$	280,666		$	839,062		$	1,120,284

Share-based compensation expense			—	—		5,857			—			5,857
Issuance of unrestricted stock awards			718	—		117			—			117
Exercise of options to purchase common stock			2,402	—		79			—			79
Vesting of restricted stock units and performance-based restricted stock units			99,124	1		—			—			1
Common shares withheld for taxes			(26,151)	—		(4,107)			—			(4,107)
Repurchase and retirement of common stock			(247,132)	(2)		(40,005)			—			(40,007)


Net Income			—	—		—			32,718			32,718
Balance, April 30, 2022			55,491,361	$	555	$	242,607		$	871,780		$	1,114,942
Share-based compensation expense			—	—		6,007			—			6,007
Issuance of unrestricted stock awards			864	—		116			—			116
Exercise of options to purchase common stock			550	—		22			—			22
Vesting of restricted stock units and performance-based restricted stock units			13,625	—		—			—			—
Common shares withheld for taxes			(2,681)	—		(314)			—			(314)

Issuance of common stock to employees under employee stock purchase plan			4,212	—		464			—			464
Net Income			—	—		—			41,344			41,344
Balance, July 30, 2022			55,507,931	$	555	$	248,902		$	913,124		$	1,162,581
Share-based compensation expense			—	—		5,802			—			5,802
Issuance of unrestricted stock awards			1,079	—		158			—			158
Exercise of options to purchase common stock			260	—		9			—			9
Vesting of restricted stock units and performance-based restricted stock units			4,703	—		—			—			—
Common shares withheld for taxes			(1,548)	—		(208)			—			(208)

SEC Form 10-Q filed by Five Below Inc.