Five Below ($FIVE) has an earnings call tomorrow, June 9, and unfortunately, months of people staying indoors is not going to reflect well on retailers. The expected loss on the quarterly report is $0.30 per share, which is a huge negative year-over-year change as well as a loss in revenue.
The COVID-19 pandemic acted as an accelerant for brands clinging to an in-store operation, as the number of people ordering online continues to increase. Many retailers have succumbed to the 'retail apocalypse' brought on by Amazon and Alibaba, but the Coronavirus will have a permanent effect on people who want to spend time browsing aisles.
75% of Five Below stores have reopened alongside states slowly lifting restrictions for businesses. But even if you lead an infinite number of horses inside your store without social distancing rules, you can't make them drink the water.
Although there's a plan to continue opening more stores and hire more employees, this optimistic approach by Five Below could not stop the stock from being cut in half in March. Going forward, there's got to be an e-commerce plan in place to compete with both online retailers and rival stores Dollar General and Dollar Tree.
While social media growth has happened over the last six months, it's been relatively flat for about a year (Twitter and Instagram data not shown, try our demo for full access). You can see that the Facebook 'Talking About' count for Five Below completely crashed and hasn't recovered in months. People aren't posting about Five Below, so they probably aren't shopping there either.
Finally, we noticed that the average discount on items storewide has been completely stagnant for almost a year now. Maybe there's an opportunity to do more with discounting more expensive inventory, instead of only selling things below five dollars. Just a helpful thought, not a real proposal because we are a data journalism website and don't know how to run a real store, so take our advice with grains of salt.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
