Does Five Below Have an E-Commerce Problem?

Investors reacted harshly to Five Below's (NASDAQ: FIVE) holiday-season sales update, sending shares down as much as 20% on Monday before the stock settled at an 11% decline for the day. The announcement contained some bad news, to be sure, on both the revenue and profit fronts during the critical peak shopping season around Thanksgiving and Christmas.

The youth-focused retailer's wider growth prospects aren't dented by this weak holiday outing. However, the performance raises questions about the chain's ability to keep sales marching higher at existing locations without the benefit of a robust multi-channel selling model.

Let's take a closer look.

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Source Fool.com