five-20220730

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 July 30, 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 August 31, 2022 was 55,507,194.


INDEX

PART I - FINANCIAL INFORMATION		Page
Item 1.	Consolidated Financial Statements (unaudited)	4
	Unaudited Consolidated Balance Sheets as of July 30, 2022, January 29, 2022 and July 31, 2021	4
	Unaudited Consolidated Statements of Operations for the Thirteen and Twenty-Six Weeks Ended July 30, 2022 and July 31, 2021	5
	Unaudited Consolidated Statements of Shareholders' Equity for the Thirteen and Twenty-Six Weeks Ended July 30, 2022 and July 31, 2021	6
	Unaudited Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended July 30, 2022 and July 31, 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)


	July 30, 2022		January 29, 2022		July 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	155,101	$	64,973	$	126,195
Short-term investment securities	117,315		277,141		286,929
Inventories	569,201		455,104		347,302
Prepaid income taxes and tax receivable	14,371		11,325		9,410

Prepaid expenses and other current assets	107,771		96,196		69,504
Total current assets	963,759		904,739		839,340
Property and equipment, net of accumulated depreciation and amortization of $412,312, $363,254, and $317,499, respectively.	842,002		777,497		677,183
Operating lease assets	1,267,316		1,151,395		1,086,386

Long-term investment securities	—		37,717		1,104
Other assets	13,149		9,112		18,921
	$	3,086,226	$	2,880,460	$	2,622,934

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

Accounts payable	266,114		196,461		167,704
Income taxes payable	—		28,096		931
Accrued salaries and wages	19,983		53,539		41,654
Other accrued expenses	159,976		145,268		141,520
Operating lease liabilities	184,450		163,537		150,041

Total current liabilities	630,523		586,901		501,850

Other long-term liabilities	4,077		1,663		1,291
Long-term operating lease liabilities	1,247,631		1,135,456		1,081,555
Deferred income taxes	41,414		36,156		35,778
Total liabilities	1,923,645		1,760,176		1,620,474
Commitments and contingencies (note 6)
Shareholders’ equity:
Common stock, $0.01 par value. Authorized 120,000,000 shares; issued and outstanding 55,507,931, 55,662,400, and 56,022,278 shares, respectively.	555		556		560
Additional paid-in capital	248,902		280,666		327,211
Retained earnings	913,124		839,062		674,689
Total shareholders’ equity	1,162,581		1,120,284		1,002,460
	$	3,086,226	$	2,880,460	$	2,622,934

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				Twenty-Six Weeks Ended
	July 30, 2022		July 31, 2021		July 30, 2022		July 31, 2021
Net sales	$	668,927	$	646,554	$	1,308,523	$	1,244,377
Cost of goods sold	440,418		416,235		873,237		813,189
Gross profit	228,509		230,319		435,286		431,188
Selling, general and administrative expenses	172,498		144,151		336,946		281,333
Operating income	56,011		86,168		98,340		149,855
Interest income (expense) and other income (expense), net	95		(1,071)		(142)		(2,048)


Income before income taxes	56,106		85,097		98,198		147,807
Income tax expense	14,762		20,256		24,136		33,370
Net income	$	41,344	$	64,841	$	74,062	$	114,437





Basic income per common share	$	0.74	$	1.16	$	1.33	$	2.04
Diluted income per common share	$	0.74	$	1.15	$	1.33	$	2.03

Weighted average shares outstanding:
Basic shares	55,498,471		56,007,970		55,572,425		55,989,399
Diluted shares	55,646,039		56,299,491		55,739,752		56,287,095

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


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

	Shares	Amount
Balance, January 30, 2021				55,935,237			$	559							$	321,075	$	560,252	$	881,886

Share-based compensation expense			—		—				5,695		—		5,695
Issuance of unrestricted stock awards			400		—				81		—		81
Exercise of options to purchase common stock			200		—				6		—		6
Vesting of restricted stock units and performance-based restricted stock units			92,914		1				—		—		1
Common shares withheld for taxes			(34,682)		—				(6,623)		—		(6,623)



Net income			—		—				—		49,596		49,596
Balance, May 1, 2021			55,994,069		$	560			$	320,234	$	609,848	$	930,642
Share-based compensation expense			—		—				6,457		—		6,457
Issuance of unrestricted stock awards			413		—				80		—		80
Exercise of options to purchase common stock			10,246		—				352		—		352
Vesting of restricted stock units and performance-based restricted stock units			17,339		—				—		—		—
Common shares withheld for taxes			(1,879)		—				(355)		—		(355)


Issuance of common stock to employees under employee stock purchase plan			2,090		—				443		—		443
Net income			—		—				—		64,841		64,841
Balance, July 31, 2021			56,022,278		$	560			$	327,211	$	674,689	$	1,002,460

SEC Form 10-Q filed by Five Below Inc.