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Remember Fidget Spinners? Five Below's Q2 Success Just Might Depend On Them

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Remember Fidget Spinners? Five Below's Q2 Success Just Might Depend On Them

Five Below Inc (NASDAQ: FIVE) shares are up 26 percent in 2017, driven largely by the popularity of fidget spinners. But with fidget spinner craze seemingly on the decline, Five Below investors will be watching closely on Wednesday to see how big of an impact the gadgets will have on Five Below’s bottom line and what type of products management sees as he next big sales drivers for the company.

Loop Capital analyst Anthony Chukumba is expecting a strong quarter from Five Below on Wednesday afternoon. Loop is calling for EPS of 28 cents, slightly above the high end of the range the company provided in its guidance. Chukumba expects fidget spinners drove 7.0 percent comparable-store sales growth on the quarter (see Chukumba's track record here).

“We expect investor focus to be primarily on fidget spinner, other trendy products, and core merchandise assortment sales trends, as well as an update on the California expansion,” he wrote in a note to clients on Monday.

Related Link: 2 Factors Leading To UBS's Downgrade Of Five Below

One of the next trendy products that could fall right in Five Below’s wheelhouse is the PopSocket. PopSockets are small, plastic phone accessories that pop onto the back of a phone and provide grip, decoration and a prop for watching videos. PopSocket are already selling on Amazon.com, Inc. (NASDAQ: AMZN) and eBay Inc (NASDAQ: EBAY), mostly in the $10 to $15 range.

Barring some unexpected slowdown in sales growth or the company's expansion efforts in California and elsewhere, Loop Capital sees long-term upside for Five Below at the stock’s current price. The firm maintains a Buy rating and $60 price target for Five Below.

Latest Ratings for FIVE

DateFirmActionFromTo
Sep 2020Wolfe ResearchInitiates Coverage OnOutperform
Sep 2020GuggenheimMaintainsBuy
Sep 2020Loop CapitalMaintainsBuy

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