1330 ET - Five Below's better-than-expected comparable sales in the latest quarter are encouraging, but its exposure to China will bring more challenges to the discount retailer, BofA Securities analysts say in a research note. The company sources 60% of its costs of goods sold from China either directly or through domestic vendors. Even though management provided guidance for 100 basis points of gross merchandise value in F25 from tariffs, the analysts expect F26 to face an incremental 100 basis points of pressure. BofA Securities lowers its FY25 and FY26 EPS estimates by 6.7% and 12.5%, respectively, on tariff pressure, and cuts its target price to $75 a share from $88 a share previously. Shares rise 6% to $80.17. (sabela.ojea@wsj.com; @sabelaojeaguix)
(END) Dow Jones Newswires
March 20, 2025 13:30 ET (17:30 GMT)
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