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Here's How Strong Q2 Results & Store Growth Lift FIVE's FY25 Outlook

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Key Takeaways

  • {\"0\":\"FIVE expects FY25 net sales of $4.44-$4.52B, above the prior stated $4.33-$4.42B.\",\"1\":\"Comparable sales growth is projected at 5-7%, lifted from the earlier mentioned 3-5%.\",\"2\":\"The adjusted EPS forecast increased to $4.76-$5.16 from the prior stated $4.25-$4.72.\"}

Five Below, Inc. (FIVE - Free Report) delivered an exceptional second-quarter fiscal 2025, prompting management to lift the full-year projections. Net sales jumped 23.7% year over year to more than $1 billion, while comparable sales climbed 12.4%, driven by an 8.7% increase in transactions and a 3.4% rise in average ticket. Adjusted earnings per share jumped 50% to 81 cents, supported by strong fixed-cost leverage despite continued tariff pressures.

Encouraged by these results, management expects full-year net sales of $4.44-$4.52 billion, up from the previously mentioned $4.33-$4.42 billion. Comparable sales growth is projected at 5-7% versus the prior stated 3-5%. The mid-point of operating margin guidance has improved about 60 basis points to 7.9%, and adjusted EPS is projected at $4.76-$5.16 compared with the earlier mentioned $4.25-$4.72.

A key driver of this raised guidance is the company’s disciplined expansion of its store base. In the fiscal second quarter, Five Below opened 32 net new stores across 21 states, bringing the total to 1,858 locations, a year-over-year increase of 11.5%. Four of these openings ranked among the top 25 all-time spring and summer grand openings, underscoring strong consumer demand and the broad appeal of the brand.

FIVE Stock Past 3-Month Performance

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Management also plans about 50 net new openings in the fiscal third quarter and expects 150 net new stores for the fiscal year, demonstrating confidence in continued geographic growth.

Several other factors reinforced the improved outlook. Strength was broad-based, with six of the company’s eight merchandise “worlds” performing well rather than relying on a single trend. Curated assortments of fresh, licensed and trend-right products, along with a simplified whole-number pricing structure, made shopping more appealing and easier for customers.

Operational upgrades, such as improved inventory flow, stronger in-stock positions and optimized store labor, enhanced the shopping experience and increased efficiency. Marketing campaigns, driven by social media and creator-led content, expanded brand reach and attracted shoppers while encouraging repeat visits.

By combining rapid store expansion with disciplined merchandising, streamlined pricing and strong execution, Five Below has positioned itself to sustain robust top and bottom-line growth. The raised guidance reflects management’s confidence that these initiatives will continue to drive sales and profitability throughout the remainder of fiscal 2025.

FIVE’s Price Performance, Valuation & Estimates

Shares of the company have gained 26% in the past three months compared with the industry’s 16.9% growth. 

From a valuation standpoint, Five Below is trading at a forward 12-month price-to-sales ratio of 1.80X, down from the industry average of 1.95X. FIVE has a Value Score of A.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

The Zacks Consensus Estimate for Five Below’s fiscal 2025 earnings implies a year-over-year decline of 1%, whereas the same for fiscal 2026 indicates an uptick of 10%. Estimates for fiscal 2025 and 2026 have been revised upward by 30 cents and 27 cents, respectively, in the past 30 days.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Five Below currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Key Picks

Some better-ranked stocks are Genesco Inc. (GCO - Free Report) , Urban Outfitters Inc. (URBN - Free Report) and Tilly's, Inc. (TLYS - Free Report) .

Genesco is a Nashville-based specialty retail and branded company that sells footwear and accessories in retail stores. It currently flaunts a Zacks Rank of 1.

The Zacks Consensus Estimate for GCO’s fiscal 2026 earnings and sales implies growth of 67% and 3%, respectively, from the year-ago actuals. Genesco delivered a trailing four-quarter average earnings surprise of 28.1%.

Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift items. It carries a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Urban Outfitters’ current fiscal-year earnings and sales indicates growth of 27.6% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 24.8%.

Tilly's is a specialty retailer in the action sports industry, selling clothing, shoes and accessories. It has a Zacks Rank of 2 at present. 

The Zacks Consensus Estimate for Tilly's current fiscal-year earnings suggests growth of 8.8% from the year-ago actual. TLYS delivered a trailing four-quarter average earnings surprise of 60.7%.

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