Five Below Panics, CEO Exits

And, Spirit Airlines non-ticket sales.

July 17, 2024

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Source: Five Below

Today is Wednesday, July 17, 2024.

The Early Bird Index today is 77.74.

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Five Below Panics, CEO Exits

Five Below (Nasdaq: FIVE) plunged 10.11% in after-hours trading on Tuesday after the specialist discount retailer made a leadership change and posted disappointing financial updates.

Details: Joel Anderson is stepping down as president and CEO. Kenneth Bull, the COO, becomes the interim president and CEO while a search for a permanent replacement is underway.

Powering the Story: The company also announced that sales for the current quarter will be in the range of $820 million to $826 million, which is lower than expected. It saw a 6% to 7% decrease in sales during the quarter. Earnings per share is also likely to be lower.

Background: Five Below’s stock is down 52% this year. The stock has been weighed down by disappointing financial results and declining profitability because of inventory losses, inflation, and increased competition.

Early Bird’s Nest Egg Gains: The current economic situation is bad for consumers, especially discretionary spending.

  • Low and moderate-income consumers are struggling due to higher inflation. They are budgeting more on everyday essentials and tightening their belts.

  • The average credit card balance per consumer increased by 8.5% in the last year. Rising delinquencies on credit cards are up, resulting in less discretionary spending.

Final Thoughts: It might be a good time to avoid discount retail stocks in general.

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Notables

Notable Earnings Today: Johnson & Johnson (NYSE: JNJ), ASML (Nasdaq: ASML), United Airlines (Nasdaq: UAL), Citizens Financial Group (NYSE: CFG), Alcoa (NYSE: AA), Elevance Health (NYSE: ELV), Discover Financial Services (NYSE: DFS), Ally Financial (NYSE: ALLY), Kinder Morgan (NYSE: KMI), Bank OZK (Nasdaq: OZK), Prologis (NYSE: PLD), Crown Castle (NYSE: CCI), Synchrony Financial (NYSE: SYF), Steel Dynamics (Nasdaq: STLD), U.S. Bancorp (NYSE: USB), SL Green Realty (NYSE: SLG), Equifax (NYSE: EFX), First Horizon (NYSE: FHN), Cohen & Steers (NYSE: CNS). Home BancShares (NYSE: HOMB), Rexford Industrial Realty (NYSE: REXR), Synovus (NYSE: SNV), Wintrust Financial (Nasdaq: WTFC), Northern Trust (Nasdaq: NTRS), First Industrial Realty Trust (NYSE: FR), Liberty Energy (NYSE: LBRT).

Notable IPOs Today: Melar Acquisition Corp. I Class A Ordinary Shares (Nasdaq: MACI), Invesco QQQ Income Advantage ETF (Nasdaq: QQA).

Notable Equity Crowdfunding Campaigns Ending Today: Lima Bakery (Honeycomb).

Notable Economic Events Today: Building Permits (8:30 a.m. ET), Housing Starts (8:30 a.m. ET), Industrial Production (9:15 a.m. ET), Crude Oil Inventories (10:30 a.m. ET), Beige Book (2:00 p.m. ET).

Spirit Airlines Non-Ticket Sales

Spirit Airlines (NYSE: SAVE) fell 5.06% in after-hours trading on Tuesday after providing bad financial estimates.

Details: Spirit expects revenue for the quarter to be about $1.28 billion, lower than expected, because of disappointing non-ticket revenue. This includes seat selection fees, bag fees, priority boarding, and on-board food and beverage.

Final Thoughts: In 2024, Spirit is down 80%. It’s a bad year for budget airlines.

XRP Grows Due to Whales

The price of the cryptocurrency XRP jumped 7% Tuesday thanks to whales, individuals who own a lot of crypto, buying more XRP.

Final Thoughts: XRP is up 13% in the last 30 days, but down 8% this year.

Bigger is Better: Three Major Takeaways From Big Banks’ Earnings (Wall Street Journal)

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.