MKM Partners Raise Price Target on Five Below (FIVE) Following 1Q15 Results
MKM Partners reiterates a Buy rating on Five Below (NASDAQ: FIVE), and raised the price target to $50.00 (from $41.00), following 1Q15. EPS increased 14% to $0.08 and beat MKM Partners estimate by $0.01. Same-store sales increased 1.7%.
Analyst Patrick McKeever commented, "The numbers were modest relative to trend, given a tough comparison and investment spending, though they were slightly better than we expected, driven in part by very strong new store performance in both new and existing markets. We continue to expect the impact of investment spending to be greatest in the second quarter, though we also believe comps are trending better (more in the mid-single digits) following some weather-related weakness in February and early March."
McKeever also added, "Same-store sales increased 1.7% on top of a 6.2% increase LY, putting the two-year stacked comp at a very respectable 7.9%, despite challenges from the weather and the two-weeks earlier Easter. As we've discussed, Five's stores ramp quickly to about $1.9 million in annual sales, which makes it tough to generate comp growth. The continued gains speak to the freshness of the concept and its broad appeal, in our view."
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Shares of Five Below closed at $35.10 yesterday.