Five Below Q1 Earnings Beat, Comps Increase Y/Y, FY25 View Raised

Five Below, Inc. FIVE reported impressive first-quarter fiscal 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. Also, net sales and earnings increased year over year. The company raised its fiscal 2025 outlook. As a result, FIVE shares rose 4.6% during the after-market trading session yesterday.

More on Five Below’s Q1 Results

FIVE posted adjusted earnings per share of 86 cents in the fiscal first quarter, which beat the Zacks Consensus Estimate of 83 cents. Also, the figure increased 43.3% from 60 cents in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Net sales of $970.5 million increased 19.5% year over year. Also, this metric surpassed the Zacks Consensus Estimate of $968 million. Comparable sales (comps) increased 7.1% year over year.

Insight Into Margins & Costs of FIVE

Adjusted gross profit grew 24.6% year over year to $328.4 million. We note that the adjusted gross margin increased approximately 130 basis points (bps) year over year to 33.8%, which beat our estimate of 33.2%.

Selling, general and administrative (SG&A) costs rose 19.1% to $226.5 million. SG&A costs, as a percentage of net sales, decreased approximately 10 bps to 23.3%. We estimated SG&A costs to rise 20.8% year over year for the quarter under review.

Adjusted operating income was $59.6 million compared with $38.1 million in the first quarter of fiscal 2024. The adjusted operating margin increased approximately 140 bps to 6.1%. We estimated the adjusted operating margin to increase 110 bps year over year to 5.8% for the fiscal first quarter.

Five Below’s Financial Snapshot: Cash & Equity Overview

The company ended the fiscal first quarter with cash and cash equivalents of $427.5 million, and short-term investment securities of $196.5 million. Total shareholders’ equity was $1.86 billion as of May 3, 2025.

FIVE Provides Q1 Store Update

The company opened 55 net new stores and ended the quarter with 1,826 stores across 44 states. This represents a 13.8% increase in the number of stores from the end of the first quarter of fiscal 2024.

The company plans to open 150 stores by the end of fiscal 2025, taking the total count to 1,921 stores.

What Lies Forward in Q2 for Five Below?

FIVE provided its financial expectations for the second quarter and fiscal 2025, incorporating the anticipated effects of currently imposed tariffs.

For the second quarter of fiscal 2025, the company anticipates net sales between $975 million and $995 million, whereas it reported $830.1 million in the second quarter of fiscal 2025. This projection is based on the planned opening of 30 net new stores and indicates a 7-9% increase in comparable sales.

Net income is expected to fall between $25 million and $32 million, while adjusted net income is projected between $28 million and $34 million. Net income and adjusted net income were $33 million and $29.7 million, respectively, in the year-ago period.

Earnings per share are expected to be 45-57 cents, whereas it reported 60 cents in the year-ago period. Adjusted earnings per share are projected to be 50-62 cents, whereas it reported 54 cents in the year-ago period. These projections do not take into account any potential share repurchases.

FIVE Stock Past Three-Month Performance

Five Below’s FY25 Outlook

The company updated its financial outlook for fiscal 2025, reflecting improved expectations in several key areas. Net sales are projected to be $4.33-$4.42 billion, an upward revision from the earlier stated $4.21-$4.33 billion. In fiscal 2024, the company reported net sales of $3.88 billion. This increase suggests stronger anticipated performance, supported by plans to open stores and an improved outlook for comparable sales growth of 3-5% compared with the prior mentioned flat to up 3%.

Net income is forecast between $223 million and $249 million, which marks an upward adjustment from the previously stated $216-$250 million. Adjusted net income remains consistent at the high end, between $235 million and $261 million, slightly raised from the earlier $227-$261 million. Net income and adjusted net income were $253.6 million and $277.8 million, respectively, in fiscal 2024.

Earnings per share are expected to be $4.04-$4.51, up from the prior mentioned $3.90-$4.52 and suggesting a rise from the $4.60 reported in fiscal 2024. Adjusted earnings per share are likely to be $4.25-$4.72 compared with the previously mentioned $4.10-$4.72, whereas it registered $5.04 in fiscal 2024.

The company anticipates the gross capital expenditure between $210 million and $230 million. These investments will support store openings and ongoing upgrades to systems and infrastructure.

Shares of this Zacks Rank #2 (Buy) company have gained 41.8% in the past three months against the industry’s 1.5% decline.

Other Key Picks

Some other top-ranked stocks are Urban Outfitters Inc. URBN, Canada Goose GOOS and Allbirds Inc. BIRD.

Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for URBN’s fiscal 2025 earnings and sales implies growth of 20.9% and 8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 29%.

Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.

Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for BIRD’s current financial year’s earnings suggests growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.

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

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