Deutsche Bank: Five Below's 'Unique Growth Story' Intact, Confident Heading Into Q3 Print

Paul Trussell of Deutsche Bank commented in a note on Monday that

remains a "unique" retail concept with strong traffic and plenty of room for future growth. The analyst reiterated a Buy rating and $49 price target ahead of Thursday's third quarter results. "Five Below's ability to comp the comp has been in question of late," Trussell wrote. "It faces one of its toughest compares in years this quarter versus last year's rainbow loom craze and 9.0 percent same-store sales." The company is guiding for flattish to slightly positive comps, but the analyst believes the company will exceed its guidance with a 2 percent same-store-sales growth. Trussell notes that Five Below has never comped negatively while trends are consistent with a 10 percent to 11 percent two-year stack in both the first half of 2014 and fiscal 2013. In addition, Trussell points out that Five Below could benefit from lower fuel prices as its customers have higher discretionary spending abilities. Also,

and

, two of the most direct competitors from a merchandise perspective, have posted better-than-expected same-store-sales in the third quarter. Looking forward to the fourth quarter, Trussell expects the company to guide conservatively with a mid-single digit same-store-sales guidance.