Five Below announced on Tuesday that its CEO and President Joel Anderson has resigned amidst declining sales at the discount retailer that targets a teen demographic. The Philadelphia-based company has been grappling with reduced spending from its lower-income customer base and an uptick in theft. Consequently, Five Below has revised its financial projections for the current quarter.
Kenneth Bull, a long-time executive who has been with the company for close to two decades, will step in as the interim CEO and President while the board conducts a search for a permanent chief executive. Bull held the positions of CFO for 11 years and, most recently, COO. Thomas Vellios, the co-founder, non-executive chairman, and former CEO, will now act as the executive chairman.
Five Below disclosed that its sales for the 10-week period ending Saturday rose by 9.5% compared to the first 10 weeks of the previous quarter that ended on July 8, 2023. However, comparable sales dropped by 5% when compared to the same period from the year before. The company now anticipates second-quarter sales, ending on August 3, to range between $820 million and $826 million, with a projected decline of approximately 6% to 7% in comparable sales for the period. Initially, the company had forecasted a range of $830 million to $850 million in June.
Projected second-quarter net income per share is now estimated to fall between 53 cents and 56 cents, down from the previous estimate of 57 cents to 69 cents per share. Analysts, according to FactSet, had previously predicted earnings of 63 cents per share on sales amounting to $837 million for the quarter. Following the announcement, Five Below Inc. witnessed a more than 9% drop in its shares during after-hours trading.
