A shopper browses a selection of body surfboards outside a Five Below store on July 25, 2018 in Bloomington, Illinois.
Daniel Acker | Bloomberg | Getty Images
Joel Anderson, chief executive of the discount retailer, said that while inflation is showing signs of easing, the country’s consumers are likely to still feel its effects for quite some time. Five or less. The executive believed that low-income earners were particularly underperforming.
“The low-end customer is really stretched,” Anderson said during an earnings call with analysts on Wednesday. “We have to deliver value and we have to really demonstrate it in the way we go to market and what you see when you walk into the store. That. But all of that is underway now and (we) expect to see some of those changes improve by the second half of this year.
Five Below issued soft revenue guidance for the second quarter and full year. First-quarter revenue also fell short of expectations.
The stock plunged about 11% on Thursday, hitting a new 52-week low during trading. By 2024, the retailer’s sales will decline by more than 45%.
“Consumers are becoming more picky about their money and increasingly buying on-demand,” Anderson added. The types of products they buy reflect this, he added, noting that consumers are more discerning in the company’s “Consumer Staples” category. Shop for more like Sweets, Food & Drinks, Beauty & Wellness, and Beauty Supplements.
The CEO also noted that Five Beyond, the company’s in-store stores where some products sell for more than $5, perform best among low-income stores. He said this showed that when consumers see value in a product, they are more likely to “spend more money.”
While there are some signs that aspects of the U.S. economy are improving, consumer confidence has been lagging. In fact, consumer sentiment A drop of more than 10% According to the University of Michigan Consumer Survey, May. Not only that, more than half of Americans incorrectly believe the country is in a recession.
“This quarter, consumers are feeling the impact of multi-year inflation in many key categories such as food, fuel and rent, and are becoming more cautious about their discretionary funds,” Anderson said.
About The Author
