[caption id="attachment_90033" align="aligncenter" width="720"] Source: Company reports/Coresight Research[/caption]   1Q19 Results Five Below reported 1Q19 revenues of $364.8 million, up 23.1% year over year and beating the $364.2 million consensus estimate. Comps increased 3.1%, missing the 3.7% consensus estimate and down from 3.2% in the year-ago quarter. EPS was $0.46, up 17.1% year over year, beating the consensus estimate by 12 cents. A tax benefit from share-based accounting contributed 11 cents to EPS in the quarter as against four cents in the year-ago quarter. Details from the Quarter

• The company opened 39 stores in the quarter and ended the quarter with 789 stores in 36 states.
• Operating income declined 1% to $24.5 million owing to unanniversaried tax reform-related investments, costs related to opening the new Southeast distribution center and adoption of the new lease accounting standard.
• The company opened its Southeast distribution center at the end of the first quarter and intends to open a Southwest distribution center next year.
• Gross margin grew eight basis points to 32.9%, primarily driven by occupancy cost leverage, offset by start-up costs of the new Southeast distribution center.
• Effective tax rate for the quarter was 1.9% as against 15.4% in 1Q18, driven by the favorable impact of share-based accounting.
• Inventory was $268.4 million at the end of the first quarter as against $215.4 million at the end of the year-ago quarter. On a per-store basis, average inventory was around 4% higher than the year-ago quarter, driven mainly by a growth in import penetration and the timing of other receipts.

Outlook In 2019, management plans to continue to focus on elevating its customer experience, offering even better so-called “WOW” products and further enhancing its supply chain. Management believes it is on track to reach its 2020 goals and stated that it will continue to invest in people, systems and infrastructure to achieve its long-term goal of operating more than 2,500 stores in the US. The company provided the following guidance for 2019:

• Net sales of $1.86-1.88 billion, up 20-21% and below the $1.89 billion consensus.
• Opening approximately 145 to 150 new stores.
• An approximate 3% increase in comparable sales.
• EPS of $3.11-3.18, up 17-19% and above the $3.09 consensus.

The company provided the following guidance for 2Q19:

• Net sales of $417-422 million, up 20-21% and in line with consensus.
• Opening approximately 40 new stores.
• An approximate 2-3% increase in comparable sales.
• EPS of $0.48-0.51, up 7-13% and in line with the $0.49 consensus.