Jim Cramer on Five Below Q1 earnings: ‘it’s really well-run’

Shares of Five Below Inc (NASDAQ: FIVE) ended nearly 10% up on Friday even though the discount retailer said its sales came in slightly below expectations in the first quarter.

Five Below stock up on strong guidance

The retail stock was rewarded primarily because the management raised its guidance for the full year.

Five Below now forecasts $5.31 to $5.71 of per-share earnings on $3.5 billion to $3.57 billion in revenue. Discussing its earnings print on CNBC’s “Squawk Box”, Jim Cramer said:

Five Below is growing rapidly; triple new stores, double the sales. They reported a monster number. This is the retailer that’s buying Tuesday Morning stores and it’s just crushing it.

Nonetheless, Five Below stock is down more than 15% versus its year-to-date high at writing.

Five Below Q1 earnings snapshot

• Earned $37.5 million versus the year-ago $32.7 million
• Per-share earnings also climbed from 59 cents to 67 cents
• Revenue went up 13.5% year-on-year to $726.2 million
• Consensus was 63 cents a share on $728 million in revenue
• Comparable sales jumped a less than expected 2.7%
• Opened 27 new stores to end the quarter with 1,367 in total

Five Below is rapidly opening new stores

Five Below also revealed plans of opening more than 200 new stores this year and convert over 400 to “Five Beyond”, as per the earnings press release. The Mad Money host added:

Five Below is a really well-run retailer. It’s one to know because they’re going from 2,500 stores to 3,500 stores.

His view is in line with Wall Street that currently has a consensus “overweight” rating on Five Below stock.