Discount Retail Chain Five Below (publicly listed NYSE: FIVE) said it will add Associate Assisted Self-Checkout (ACO) to be in over 60% of the value chain’s fleet by the end of this year.
The discounter opened 67 net new stores and ended the first quarter of 2021 with 1,087 stores in 39 states, an increase in stores of 18% from the end of the first quarter of fiscal 2020. In addition to the new stores, Five Below remodeled about a dozen stores in Q1 into its new prototype and now expects to finish 2021 with about 30% of stores in the “five beyond” format, president and CEO Joel Anderson said. Additionally, ACO, as the retailer calls it, is in most of these remodeled stores, and the company is adding it to over 250 stores, to be in over 60% of the chain by the end of this year.
“ACO allows our crew to move from behind the register to the floor to assist our customers with their shopping and checkout process, which makes for a better and faster customer experience,” said Anderson in the earnings call. “Five beyond and ACO are just two examples of how fast we are transforming the Five Below concept to make it an even better experience. For digital, which includes marketing, as well as e-commerce, we focused on increasing our brand awareness through more targeted marketing, utilizing paid search and social platforms such as Instagram. Through digital channels, we are able to highlight our amazing value, hot new products, and inspire and delight our customers.”
The discounter also made significant progress in preparing its next two distribution centers to open, he noted. Five Below started inbound shipping to its Arizona DC, or ship center, and also broke ground on its Indianapolis ship center in mid-April. The Arizona ship center is expected to open later this summer and will include e-commerce fulfillment, which will improve service to customers in the western states.
“These ship centers feature a new warehouse management system, which, combined with our demand forecasting platform, will help optimize our inventory levels and allocations,” said Anderson.
Five Below reported net earnings of US$49.6 million in the quarter, compared to a loss of US$50.6 million in the year-ago period.
“Our first quarter results kicked off a great start to fiscal 2021, surpassing our expectations. Our teams did an outstanding job executing in an environment of elevated consumer demand,” said Anderson.
Five Below is on track to open 170 to 180 new stores this year. “We are excited to continue growing and innovating across our key strategic initiatives of product, experience and supply chain. With the inherent flexibility of our eight worlds, unique merchandising approach and focus on innovation, we believe we remain in a position of strength to continue growing Five Below and driving sustainable, long-term value for all stakeholders.”
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