Five Below downgraded to Underweight from Neutral at JPMorgan

JPMorgan downgraded Five Below to Underweight from Neutral with a price target of $95, up from $89. The firm’s recent fieldwork is pointing to Q3-to-date same-stores-sales through mid-September being down low-single-digits, with August comps down low-single-digits, but the first half of September showing “sequential improvement”, the analyst tells investors in a research note. The firm further cites Five Below management having reiterated a 3% comp necessary for operating margin expansion in FY25, but its model has only a 1% comp, with 50bps margin compression translating to only 2.5% EPS growth against consensus expectation of 6% growth.