Intelligent Investor - June 7

(RTTNews) - Earnings Intelligence

A specialty value retailer Five Below Inc. (FIVE) reported better-than-expected Q1 profit and issued upbeat Q2, FY guidance.

The company's first-quarter net income increased by 159.8% to $21.8 million compared to $8.4 million in the first quarter of fiscal 2017. Earnings per share was $0.39 compared to $0.15 per share in the first quarter of fiscal 2017.

Analysts polled by Thomson Reuters expect earnings of $0.32 per share for the quarter. Analysts' estimate typically exclude certain special items.

Net sales increased by 27.2% to $296.3 million from $232.9 million in the first quarter of fiscal 2017; comparable sales increased by 3.2%.

Joel Anderson, President and CEO, said, "We are very pleased with the strong start to fiscal 2018, as we delivered both sales and earnings above our guidance ranges for the first quarter. Continued outperformance from our new stores and healthy comparable sales were accompanied by strong gross margin performance, SG&A leverage and tax rate favorability, resulting in EPS that more than doubled versus last year."

Q2, FY18 Outlook

For the second quarter of fiscal 2018, net sales are expected to be in the range of $332 million - $335 million, and net income in the range of $20.0 million - $21.2 million, with earnings per share of $0.36 - $0.38. Analysts are looking for earnings of $0.34 per share on revenue of $327.5 million.

For the full year of fiscal 2018, the company expects net sales to be in the range of $1.502 billion - $1.517 billion, net income in the range of $136.5 million - $139.9 million, and earnings of $2.42 - $2.48 per share. Analysts expect earnings of $2.41 per share and earnings of $1.51 billion for the full year.

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Specialty foods and non-food products provider United Natural Foods Inc. (UNFI) reported upbeat Q3 results and raised its fiscal 2018 guidance.

Net income for the third quarter of fiscal 2018 increased $15.3 million, or 41.8%, to $51.9 million, compared to $36.6 million for the third quarter of fiscal 2017. EPS increased $0.30 to $1.02 for the third quarter of fiscal 2018 compared to $0.72 for the third quarter of fiscal 2017.

Adjusted EPS increased 35.1%, to $1.04 for the third quarter of fiscal 2018 compared to adjusted EPS of $0.77 for the third quarter of fiscal 2017. Analysts are modeling earnings of $0.93 per share for the quarter.

Net sales for the third quarter of fiscal 2018 increased 11.8%, or $279.3 million, to $2.65 billion from $2.37 billion in the third quarter of fiscal 2017 due to continued increase in demand for its products.

"We delivered strong results for the quarter underscoring the strength of our market position as we continue to grow amid continuous change in the retail landscape. UNFI continues to be an important connector between manufacturers, brick and mortar retailers as well as eCommerce customers..." said Steven Spinner, Chairman and Chief Executive Officer.

For the to the remainder of fiscal 2018, the company expects its growth to continue, driven by demand for better-for-you products.

FY18 Guidance

The company now expects fiscal 2018 net sales to be in the range of $10.23 billion - $10.28 billion, earnings of $3.39 - $3.44 per share, and adjusted earnings of $3.18 - $3.23 per share. Previously, the company expected net sales of $10.01 billion - $10.16 billion, earnings of $3.27 - $3.35 per share, an adjusted earnings of $3.06 - $3.14 per share. Analysts expect earnings of $3.11 per share and revenue of $10.1 billion for the year 2018.

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Communication equipment provider Comtech Telecommunications Corp. (CMTL) reported stellar Q3 results and revised its earnings guidance for the fiscal year 2018.

Third-quarter net income was $8.21 million or $0.34 per share compared to $4.42 million or $0.19 per share last year. Analysts polled by Thomson Reuters earnings of $0.12 per share for the quarter.

Revenue for the quarter rose 15.7% to $147.85 million from $127.79 million last year.

Q4, FY18 Guidance:

Comtech sees Q4 EPS in the range of $0.24 - $0.30, while Wall Street analysts look for earnings of $0.45 per share.

The company maintains FY18 revenue target of about $570.0 million - $585.0 million, and revised its GAAP EPS outlook range to $1.17 - $1.23, versus a prior range of $1.08 - $1.23. Five Wall Street analysts have a consensus earnings estimate of $1.16 per share and revenue of $577.24 million for the full year.

Fred Kornberg, President and Chief Executive Officer, said, "Our results for the third quarter exceeded our expectations and our pipeline of opportunities remains strong. Based on our strong year-to-date performance and positive business momentum, we are increasing our fiscal 2018 operating income and Adjusted EBITDA targets, and expect fiscal 2018 to be a successful year. As we begin to look to fiscal 2019, we believe that we are firmly positioned for growth."