What Five Below's Weak Q4 Guidance Means for Mutual Fund Investors (FIVE)

After the closing bell on Thursday, discount retailer Five Below (FIVE) released its holiday sales data and an updated outlook for the fourth quarter. Here’s what this news means for mutual fund investors. Following the news, shares fell nearly 15% on Friday morning.

Holiday Sales

The company reported net sales for the nine-week period ended January 3 of $230.7 million, a 24.5% increase from $185.3 million in the same period last year.

Comparable store sales rose 3.2% during this period.

Q4 Guidance
Five Below now expects to see Q4 net sales between $262 million and $263 million. Net income is now expected to be between $32.5 million and 33 million. On a per share basis, EPS is expected to be between 59 and 60 cents. On average, analysts are expecting to see revenue of $265.75 million and 61 cents per share in earnings.

With its high price-to-earnings ratio and its lower guidance, a pullback may be inevitable for Five Below. Fund managers and investors should remain cautious on FIVE and wait for the stock to bottom out.

Investors interested in Five Below may also be interested in the funds listed below. These funds currently have the largest stakes in the company.

The funds above allow investors to gain exposure to Five Below while remaining diversified. Investors interested in Five Below may also be interested in Big Lots (BIG) and Dollar Tree (DLTR).