Why Five Below (FIVE) Shares Are Sliding Today

What Happened?

Shares of discount retailer Five Below (NASDAQ:FIVE) fell 29% in the morning session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. 

From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Five Below? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Five Below’s shares are very volatile and have had 20 moves greater than 5% over the last year. But moves this big are rare even for Five Below and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 15 days ago when the stock gained 12.7% on the news that the company reported impressive fourth-quarter (Q1 2025) results: Revenue, EPS, and EBITDA all exceeded Wall Street's estimates. Sales growth was primarily driven by store expansion, with a 14.7% increase in locations compared to the previous year. However, operating income declined as higher costs (likely tied to its expansion efforts) offset revenue gains, leading to a slight dip in margins. The ongoing investments partly explained why full-year EPS guidance fell well short of expectations, despite revenue projections slightly exceeding estimates. Overall, this quarter had some key positives.

Five Below is down 38.7% since the beginning of the year, and at $60.58 per share, it is trading 63.2% below its 52-week high of $164.74 from April 2024. Investors who bought $1,000 worth of Five Below’s shares 5 years ago would now be looking at an investment worth $967.61.

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