Five Below Raises Outlook After Sales Beat
Comparable sales increased 22.7%, topping Five Below’s prior forecast for a 14% to 16% gain.
Five Below (FIVE), the value retailer, reported a first-quarter profit rebound as net income increased to $123.1 million from $41.1 million a year earlier and diluted earnings rose to $2.21 a share from $0.75.
The quarter extended a sales acceleration that had been building over the prior two periods. Net sales rose 32.5% to $1.286 billion, after growth of 24.3% in fiscal fourth quarter 2025 and 23.1% in fiscal third quarter 2025.
Revenue also cleared the company’s prior outlook of $1.18 billion to $1.20 billion, while adjusted earnings of $2.22 a share came in above guidance of $1.57 to $1.69 a share.
Comparable sales increased 22.7%, up from 15.4% in the previous quarter and 14.3% in the quarter before that, giving the chain a stronger store-level contribution alongside expansion of its footprint. Five Below ended the period with 1,970 stores after 49 net openings, a 7.9% increase from a year earlier.
Margins also widened. Gross margin expanded to about 37.2% from about 33.4% a year earlier, while operating income roughly tripled to $154.2 million from $50.8 million. Operating margin rose to about 12.0% from about 5.2%.
Five Below raised its fiscal 2026 outlook, projecting net sales of $5.40 billion to $5.48 billion, up from its prior range of $5.20 billion to $5.30 billion. The company now expects comparable sales to rise 6% to 8%, compared with its previous forecast for 3% to 5% growth.
Profit expectations moved higher as well, with diluted earnings now forecast at $8.61 to $9.00 a share and adjusted earnings at $8.66 to $9.05 a share. The updated outlook newly includes tariff assumptions through July 24, 2026, with tariffs thereafter assumed to revert to rates in place at the start of the fiscal year.
Inventory increased year over year to $813.3 million from $702.1 million, though it declined from $846.6 million at the end of January. Five Below also appointed Daniel Sullivan as chief financial officer and Michelle Israel as chief merchandising officer, effective Oct. 6, 2025, replacing the interim finance arrangement previously noted for Ken Bull.
Source: company public filings.