Five Below CEO Joel Anderson told CNBC on Monday that the discounter is well positioned to handle inflationary pressures during the economic recovery of the pandemic.
“When inflation comes up, we can address both ways: either by relocating top-line retail or other values for our customers,” Anderson said in an interview with Closing Bell.
The company’s relatively new category called Five Beyond – which sells some products above $ 5 – is in response to price pressures, Anderson said.
“If you’d asked me that a few years ago, I would probably have said, ‘You know, this is a challenge.’ But we’ve since launched Five Beyond, ”said Anderson, who has headed the Philadelphia-based company since 2015. He is also the former President and CEO of Walmart.com.
Inflation is a key issue for the economy right now as companies develop responses to the rising cost of some raw materials and wage increases.
Five Below raised its minimum wage to attract workers, Anderson said. However, he said that in general, Five Below will be able to stand out from bargain hunters in an inflationary environment.
“Five Below has always been a value trader,” he said. “And the last thing we do is increase our retail trade. I think when inflation rises it gives us an opportunity to really increase the value we offer our customers.”
The company released quarterly results last week with net sales of $ 598 million for the period ended May 1. That’s 64% more than in the same quarter of 2019 and 198% more than in 2020, when Covid-related store closings significantly hampered sales.
Five Below shares closed down 2.5% on Monday to $ 185.47. The stock is up around 6% so far in 2021 and 68.5% over the past 12 months.