Five Below's Broad-Based Demand Drives Strong Momentum in Comps

Five Below, Inc.’s FIVE resilient demand trend is supported by sustained customer engagement across its store base. The company’s merchandising execution and in-store experience are driving repeat visits and increased average basket size. In the last reported quarter, comparable sales increased 14.3% year over year. Comparable ticket growth was driven by AUR gains, reflecting the company’s whole-price strategy and strong value on items of above $5.

Importantly, comps strength was broad-based. Growth extended across most merchandise departments, new and retained customers, and all household income cohorts, reinforcing Five Below’s mass-market appeal. Net sales rose 23.1% year over year, marking the second consecutive quarter with more than $1 billion in quarterly revenues and demonstrating sustained demand momentum.

Management noted that traffic gains accelerated throughout the quarter. This momentum was attributed to improved marketing effectiveness, particularly through creator-driven content, social-led campaigns and tighter coordination between merchandising and marketing. Enhanced store execution further supported conversion, ensuring that increased traffic translated into sales.

This strong traffic backdrop supported an improved outlook. For the fourth quarter, management guided total sales between $1.58 billion and $1.61 billion, with comparable sales projected to improve 6-8%. The company highlighted a solid start to the holiday season, noting that November and Black Friday weekend performance aligned with expectations.

Overall, Five Below’s performance underscores a structurally improved growth profile, with broad-based demand, effective value-led pricing and rising store productivity working in tandem. As traffic momentum builds and execution remains tight, the company is positioned to sustain strong comps and deliver attractive earnings growth over the medium term. We expect comparable sales to increase 9.8% year over year in fiscal 2025.

FIVE’s Price Performance, Valuation & Estimates

Shares of the company have gained 52.1% in the past six months compared with the industry’s 7.9% growth.

From a valuation standpoint, Five Below is trading at a forward 12-month price-to-sales ratio of 2.16X, up from the industry average of 1.79X.

The Zacks Consensus Estimate for Five Below’s fiscal 2025 earnings implies a year-over-year growth of 15.9%, whereas the same for fiscal 2026 indicates an uptick of 4.9%. Estimates for fiscal 2025 and 2026 have been revised upward by 74 cents and 58 cents, respectively, in the past 30 days.

Five Below currently sports a Zacks Rank #1 (Strong Buy).

Other Key Picks

Some other top-ranked stocks are FIGS Inc. FIGS, American Eagle Outfitters Inc. AEO and Boot Barn Holdings, Inc. BOOT. 

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It flaunts a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 450% and 7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests a decline of 23.6% and growth of 2.4%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 35.1%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently has a Zacks Rank of 2 (Buy).

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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