By Senad Karaahmetovic

Premarket trades Thursday saw shares of Five Below (NASDAQ) fall more than 7 percent after it cut its guidance for full-year earnings per share.

FIVE had a Q1 earnings per share of 59c (compared to 88c for the previous year and consistent with consensus estimates). In the quarter, net sales reached $639.6million. This was 7% more than the YoY average and below analyst consensus.

FIVE is expecting EPS to be between 74c and 86c for Q2, which falls short of the $1.20 consensus estimate. Analysts had expected $730.5million. FIVE estimates Q2 net revenues to range from $675 million up to $695million. Additionally, the company plans to expand its network by adding more than 30 stores net in Q2.

Five Below anticipates full-year EPS between $4.85 and $5.24. This is down from $5.19-5.70, and compares to analyst expectations of $5.47 per shares.

The FY 2023 net sales will be between $3.04 billion to $3.12 billion. This is a decrease from the $3.16 billion-$3.26 billion consensus estimate.

Despite the guidance cut, BofA analyst Jason Haas still believes the offered outlook is “optimistic”.

Although we remain bullish on FIVE’s long-term growth potential, we increasingly think that the company may need to cut FY22 guidance again,” Haas said in a client note.

In FY22 weakness, FIVE was lowered to $200.00 from $250.00 by the analyst. Still, he remains bullish on FIVE “as we believe in FIVE’s long-term growth potential after a “reset year” in FY22.”

Paul Lejuez, Citi Analyst, slashed his price target to $187.00 (from $205.00), but sounds better than Haas regarding the outlook.

“We believe these are near-term bumps but there is nothing that changes the growth runway (one of the best in retail) that is the key reason we like this stock. Though FIVE has yet to see the benefit of consumers trading down, we believe they will as more consumers seek value,” Lejuez told clients in a note.