Five Below Inc

NASDAQ:FIVE

Strong quarter: Sales reached $1.3 billion, up 23%, while comparable sales rose 14% and adjusted diluted EPS more than doubled to $1.68.

Broad demand: Traffic and transactions drove growth across customer groups, geographies and product categories, with trends such as squishy products, toys, snacks, tech and licensed merchandise contributing.

Margins expanded: Gross margin increased approximately 220 basis points to 35.6%, helped by merchandise margin, fixed-cost leverage and improved shrink, despite higher fuel costs.

Outlook raised: Full-year sales are now expected at $5.63 billion to $5.71 billion, with adjusted diluted EPS of $10.07 at the midpoint and adjusted operating margin of approximately 12.5%.

Store growth: Five Below opened 52 net new stores, reached 2,022 locations and plans to enter Puerto Rico in the second half of 2027.

Capital allocation: The company repurchased approximately 311,000 shares for about $60 million and approved a new $600 million authorization, while also increasing planned capital spending to $250 million to $260 million.

Growth investments: Management plans to reinvest tariff refunds into stores, digital capabilities and product, while continuing to build social, email and omnichannel marketing capabilities.