Why Five Below Stock Popped Today
Key Points
Five Below's inexpensive merchandise is selling well.
Management plans to open an additional 150 stores in 2026.
- 10 stocks we like better than Five Below ›
Shares of Five Below (NASDAQ: FIVE) climbed on Thursday after the extreme value retailer's quarterly results topped investors' expectations.
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Impressive Q4 performance
Five Below's sales surged 24.3% to $1.73 billion in its fiscal fourth quarter, which ended on Jan. 31. The discount store chain opened 14 net stores during the quarter and a total of 150 over the trailing 12 months. Five Below ended the year with 1,921 locations across 46 states.
The retailer's comparable sales, which measure revenue at stores open for at least a year, jumped 15.4%.
With most of its merchandise priced between $1 and $5, Five Below encourages its customers to "let go and have fun" as they shop among its candy, trendy fashion, sports, and party-focused wares.
"Our outstanding fourth quarter results capped off a transformational year that firmly established Five Below as the destination for the kid and the kid in all of us," CEO Winnie Park said.
All told, Five Below's adjusted net income leaped 24.5% to $239.6 million, or $4.31 per share. That bested Wall Street's estimates, which had called for per-share profits of $4.
A smart, value-focused strategy
Five Below's low-priced goods should continue to resonate with cash-strapped consumers, particularly if gasoline prices increase further.
Management sees sales rising to roughly $5.25 billion in fiscal 2026, up from $4.76 billion in 2025, driven by 150 store openings and comparable sales growth of 3% to 5%. The company also projects full-year adjusted earnings per share of $7.74 to $8.25, up from $6.67.
"With a growing store base, strong new store performance, and a differentiated customer value proposition, we believe we are well positioned to drive sustainable sales growth, margin expansion, and long-term shareholder value," Park said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy.
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