MKM Partners reiterated a Buy rating and $50.00 price target on Five Below (NASDAQ: FIVE) following the company's 4Q earnings report. Same-store sales increased 3.6% vs. the Street's 3.7% estimate. Comps were driven by Five's licensed business, including Shopkins and Star Wars product, adult coloring books, candy, games and toys. EPS increased 26% and were slightly above estimates, driven in part by even stronger-than-anticipated new store productivity, which drove total sales above forecasts.

Analyst Patrick McKeever commented, "Comps were a touch shy of our forecast, but we attribute the variance entirely to the impact of Winter Storm Jonas in the latter part of January, which resulted in the closing of 40% of the chain for at least one day. Recall we highlighted this as a potential risk in our preview. Even with the slight comp miss, EPS increased 26% and were slightly above our estimate, driven in part by even stronger-than-anticipated new store productivity, which drove total sales above our forecast. While the stock is up 44% from its November lows (SPX up 1% over the same period), we still think it's undervalued."

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Shares of Five Below closed at $38.89 yesterday.