Five Below’s second quarter results were marked by strong sales momentum, which management attributed to a combination of curated new product assortments, operational improvements, and pricing simplification. CEO Winnie Park emphasized that “broad-based performance across our worlds” and a focus on efficient inventory flow helped drive both transaction growth and higher average purchase values. Park highlighted that the company’s ongoing commitment to delivering trend-right, value-focused products resonated with both new and existing customers, supporting a notable increase in same-store sales and customer transactions.
Is now the time to buy FIVE? Find out in our full research report (it’s free).
Five Below (FIVE) Q2 CY2025 Highlights:
- Revenue: $1.03 billion vs analyst estimates of $991.8 million (23.7% year-on-year growth, 3.5% beat)
- Adjusted EPS: $0.81 vs analyst estimates of $0.63 (29.4% beat)
- Adjusted EBITDA: $102.8 million vs analyst estimates of $89.35 million (10% margin, 15.1% beat)
- The company lifted its revenue guidance for the full year to $4.48 billion at the midpoint from $4.38 billion, a 2.4% increase
- Management raised its full-year Adjusted EPS guidance to $4.96 at the midpoint, a 10.6% increase
- Operating Margin: 5.1%, in line with the same quarter last year
- Locations: 1,858 at quarter end, up from 1,667 in the same quarter last year
- Same-Store Sales rose 12.4% year on year (-5.7% in the same quarter last year)
- Market Capitalization: $8.26 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Five Below’s Q2 Earnings Call
- Edward Kelly (Wells Fargo): asked about holiday assortment strategy and Q4 guidance details. CEO Winnie Park outlined plans for expanded gifting and decor, while COO Ken Bull highlighted that Q4 guidance remains unchanged due to holiday season competitiveness and consumer uncertainty.
- Michael Lasser (UBS): questioned the sustainability of sales growth beyond single-product trends and the consumer response to tariff-driven price changes. CEO Winnie Park explained that sales were now broad-based across multiple product categories and customer acceptance of pricing actions was strong.
- Simeon Gutman (Morgan Stanley): requested clarity on the relative impact of trend, pricing, and execution on Q2 success. CEO Winnie Park attributed performance to a “flywheel effect” of new product curation, operational execution, and pricing simplification.
- Kate McShane (Goldman Sachs): inquired about the impact of licensed products and SKU rationalization. Park said licensing is a key value driver, with ongoing SKU rationalization delivering clearer, more impactful product statements.
- Chuck Grom (Gordon Haskett): asked about new store productivity and prospects for accelerating unit growth. CEO Winnie Park and COO Ken Bull noted strong new store performance and a disciplined approach to expanding into new markets.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) gross margin trends and the effectiveness of tariff mitigation strategies, (2) the performance of holiday and seasonal assortments as a barometer for ongoing customer engagement, and (3) the pace and productivity of new store openings, especially in underpenetrated markets. Execution on enhanced marketing and inventory flow will also be key to sustaining transaction growth.
Five Below currently trades at $148.58, up from $144.64 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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