Five Below(FIVE) - 2026 Q2 - Quarterly Results

News Release Highlights Five Below reports strong financial performance for Q2 and YTD FY2025, exceeding expectations and raising full-year guidance Second Quarter Fiscal 2025 Performance Overview Five Below, Inc. reported strong Q2 FY2025 financial results, exceeding sales and earnings expectations and raising full-year guidance - Q2 net sales increased by 23.7% to $1.0268 billion, with comparable sales growing by 12.4%[1][5] - Q2 GAAP diluted EPS was $0.77, and adjusted diluted EPS was $0.81[1][5] - The company raised its full-year fiscal 2025 sales and EPS guidance[1] Year-to-Date Fiscal 2025 Performance Overview Five Below achieved year-to-date growth in net and comparable sales, with significant increases in operating and net income as of August 2, 2025 - Year-to-date net sales increased by 21.6% to $1.9974 billion, with comparable sales growing by 9.8%[6] - Year-to-date GAAP diluted EPS was $1.52, and adjusted diluted EPS was $1.67[7] CEO Commentary and Strategic Focus CEO Winnie Park affirmed the effectiveness of the company's strategy, emphasizing 'Wow! Newness' merchandise, simplified pricing, extreme value, and optimized product flow, with a focus on upcoming holiday seasons - CEO Winnie Park stated that Q2 results exceeded sales and earnings expectations, demonstrating the effectiveness of the company's strategy[3] - Company strategic priorities include curating 'Wow! Newness' merchandise, simplifying pricing while maintaining extreme value, improving inventory levels, and optimizing product flow[3] - Future focus remains on the Halloween and critical holiday seasons, attracting customers with trendy products, exceptional value, and outstanding experiences[3] Detailed Financial Results This section details Five Below's financial performance for Q2 and YTD fiscal 2025, including key GAAP and adjusted metrics Second Quarter Fiscal 2025 Financial Results Five Below achieved significant Q2 FY2025 financial growth, with substantial increases in net and comparable sales, and double-digit growth in operating and net income Key Financial Metrics (GAAP & Adjusted) In Q2, the company achieved year-over-year growth in net sales, operating income, net income, and diluted EPS, with adjusted metrics showing stronger momentum Key Financial Data for Second Quarter Fiscal 2025 | Metric | FY2025 Q2 (million USD) | FY2024 Q2 (million USD) | Year-over-Year Growth (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Net Sales | 1,026.8 | 830.1 | 23.7% | | Operating Income (GAAP) | 52.4 | 41.5 | 26.3% | | Adjusted Operating Income | 55.1 | 37.0 | 48.9% | | Net Income (GAAP) | 42.8 | 33.0 | 29.7% | | Adjusted Net Income | 44.8 | 29.7 | 50.8% | | Diluted EPS (GAAP) | 0.77 | 0.60 | 28.3% | | Adjusted Diluted EPS | 0.81 | 0.54 | 50.0% | Operational Highlights In Q2, Five Below continued its store expansion strategy, opening 32 new stores and achieving strong comparable sales growth - The company opened 32 new stores, totaling 1,858 stores across 44 states by quarter-end, representing 11.5% year-over-year growth in store count[5] - Comparable sales increased by 12.4%[5] Year-to-Date Fiscal 2025 Financial Results Five Below maintained strong year-to-date financial performance as of August 2, 2025, with significant growth in net sales, operating income, and net income Key Financial Metrics (GAAP & Adjusted) For the year-to-date period, the company achieved robust growth across all financial metrics, with adjusted indicators reflecting superior performance Key Financial Data for Year-to-Date Fiscal 2025 | Metric | FY2025 YTD (million USD) | FY2024 YTD (million USD) | Year-over-Year Growth (%) | | :----------------------- | :--------------------- | :--------------------- | :------------- | | Net Sales | 1,997.4 | 1,641.9 | 21.6% | | Operating Income (GAAP) | 103.2 | 77.7 | 32.8% | | Adjusted Operating Income | 114.7 | 75.2 | 52.5% | | Net Income (GAAP) | 83.9 | 64.5 | 30.1% | | Adjusted Net Income | 92.3 | 62.6 | 47.4% | | Diluted EPS (GAAP) | 1.52 | 1.17 | 29.9% | | Adjusted Diluted EPS | 1.67 | 1.13 | 47.8% | Operational Highlights For the year-to-date period, the company continued its store expansion, though new store openings were slightly lower than the prior year, with comparable sales maintaining growth - The company opened 87 new stores, compared to 123 in the prior fiscal year period[6] - Comparable sales increased by 9.8%[6] Financial Outlook This section provides Five Below's financial guidance for the third quarter and full fiscal year 2025, including projected sales, comparable sales growth, and EPS Third Quarter Fiscal 2025 Guidance The company projects Q3 FY2025 net sales between $950 million and $970 million, with comparable sales growth of 5% to 7%, and adjusted diluted EPS between $0.12 and $0.24 Third Quarter Fiscal 2025 Financial Guidance | Metric | Range | | :----------------------- | :--------------------- | | Net Sales | $950 million to $970 million | | Comparable Sales Growth | 5% to 7% | | New Store Openings | Approximately 50 stores | | Net Income (GAAP) | $5 million to $12 million | | Adjusted Net Income | $7 million to $13 million | | Diluted EPS (GAAP) | $0.09 to $0.21 | | Adjusted Diluted EPS | $0.12 to $0.24 | - This guidance includes the anticipated impact of current tariffs and excludes any impact from share repurchases[8][14] Full Year Fiscal 2025 Guidance The company raised its full-year fiscal 2025 sales and EPS guidance, projecting net sales between $4.44 billion and $4.52 billion, with comparable sales growth of 5% to 7% Full Year Fiscal 2025 Financial Guidance | Metric | Range | | :----------------------- | :--------------------- | | Net Sales | $4.44 billion to $4.52 billion | | Comparable Sales Growth | 5% to 7% | | New Store Openings | Approximately 150 stores | | Net Income (GAAP) | $253 million to $275 million | | Adjusted Net Income | $264 million to $286 million | | Diluted EPS (GAAP) | $4.56 to $4.96 | | Adjusted Diluted EPS | $4.76 to $5.16 | | Total Capital Expenditures | Approximately $210 million | - This guidance includes the anticipated impact of current tariffs and excludes any impact from share repurchases[8][14] Company Overview This section provides an overview of Five Below, a high-growth value retailer, including its business model, product categories, and investor contact information About Five Below Five Below is a leading high-growth value retailer targeting teens and pre-teens, offering trendy, high-quality, and affordable products, with most items priced between $1 and $5 - Five Below is a high-growth value retailer offering trendy, high-quality products primarily for teens and pre-teens[16] - Most items are priced between $1 and $5, with some exceeding $5, across eight key categories[16] - Founded in 2002 and headquartered in Philadelphia, the company operates over 1,850 stores in 44 U.S. states[16] Investor Contact Investors can contact Christiane Pelz, Vice President of Investor Relations at Five Below, for further information - Investor contact: Christiane Pelz, Vice President, Investor Relations[17] Consolidated Financial Statements This section presents Five Below's consolidated balance sheets, statements of operations, and cash flows, providing a comprehensive view of its financial position and performance Consolidated Balance Sheets As of August 2, 2025, Five Below's total assets and shareholders' equity increased year-over-year, with a significant rise in cash and cash equivalents but a decrease in short-term investment securities Consolidated Balance Sheets Summary (As of August 2, 2025) | Metric (thousand USD) | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :----------------------- | :------------- | :------------- | :------------- | | Total Assets | 4,606,538 | 4,339,574 | 4,013,144 | | Cash and Cash Equivalents | 562,746 | 331,718 | 209,039 | | Inventory | 799,602 | 659,500 | 639,881 | | Total Liabilities | 2,699,291 | 2,531,247 | 2,405,403 | | Shareholders' Equity | 1,907,247 | 1,808,327 | 1,607,741 | Consolidated Statements of Operations For Q2 and YTD FY2025, Five Below reported significant growth in net sales, operating income, and net income, reflecting continued business expansion and improved profitability Consolidated Statements of Operations Summary (thousand USD) | Metric | FY2025 Q2 | FY2024 Q2 | FY2025 YTD | FY2024 YTD | | :----------------------- | :----------- | :----------- | :------------ | :------------ | | Net Sales | 1,026,847 | 830,069 | 1,997,374 | 1,641,932 | | Cost of Goods Sold | 684,478 | 558,283 | 1,331,092 | 1,106,626 | | Selling, General and Administrative Expenses | 242,314 | 188,809 | 468,816 | 378,995 | | Depreciation and Amortization | 47,690 | 41,468 | 94,254 | 78,652 | | Operating Income | 52,365 | 41,509 | 103,212 | 77,659 | | Income Tax Expense | 15,143 | 11,563 | 30,489 | 21,236 | | Net Income | 42,762 | 33,000 | 83,910 | 64,467 | | Diluted EPS | 0.77 | 0.60 | 1.52 | 1.17 | Consolidated Statements of Cash Flows For YTD FY2025, Five Below reported a significant increase in operating cash flow, a shift to net cash inflow from investing activities, and reduced financing cash outflow, resulting in a higher net increase in cash and cash equivalents Consolidated Statements of Cash Flows Summary (As of August 2, 2025, thousand USD) | Metric | FY2025 YTD | FY2024 YTD | | :----------------------- | :------------ | :------------ | | Net Cash Provided by Operating Activities | 225,658 | 97,694 | | Net Cash Provided by/(Used in) Investing Activities | 8,727 | (22,022) | | Net Cash Used in Financing Activities | (3,357) | (46,382) | | Net Increase in Cash and Cash Equivalents | 231,028 | 29,290 | | Cash and Cash Equivalents at End of Period | 562,746 | 209,039 | - Operating cash flow significantly increased, primarily driven by higher net income and changes in working capital, including inventory and accounts payable[23] - Investing cash flow shifted from a net outflow to a net inflow year-over-year, mainly due to increased sales, maturities, and redemptions of investment securities, alongside reduced capital expenditures[23] Non-GAAP Financial Measures Reconciliation This section provides reconciliations of GAAP to non-GAAP financial measures, including gross profit, operating income, net income, and diluted EPS, to offer a clearer view of underlying business performance Gross Profit Reconciliation The company adjusted GAAP gross profit to exclude the impact of retention awards, cost optimization initiatives, and non-recurring lease acquisition costs, arriving at adjusted gross profit Gross Profit Reconciliation (thousand USD) | Metric | FY2025 Q2 | FY2024 Q2 | FY2025 YTD | FY2024 YTD | | :----------------------- | :----------- | :----------- | :------------ | :------------ | | Gross Profit (GAAP) | 342,369 | 271,786 | 666,282 | 535,306 | | Adjustments: | | | | | | Retention Awards | 390 | 153 | 780 | 153 | | Cost Optimization Initiatives | — | — | 4,100 | — | | Non-recurring Lease Acquisition Costs | 495 | — | 495 | — | | Adjusted Gross Profit | 343,254 | 271,939 | 671,657 | 535,459 | Operating Income Reconciliation The company adjusted GAAP operating income by excluding retention awards, cost optimization initiatives, non-recurring lease acquisition costs, employment-related litigation, equity compensation benefits, and inventory write-downs to present adjusted operating income Operating Income Reconciliation (thousand USD) | Metric | FY2025 Q2 | FY2024 Q2 | FY2025 YTD | FY2024 YTD | | :----------------------- | :----------- | :----------- | :------------ | :------------ | | Operating Income (GAAP) | 52,365 | 41,509 | 103,212 | 77,659 | | Adjustments: | | | | | | Retention Awards | 2,259 | 1,647 | 5,196 | 1,647 | | Cost Optimization Initiatives | — | — | 4,960 | — | | Non-recurring Lease Acquisition Costs | 495 | — | 495 | — | | Non-recurring Employment-related Litigation | — | — | — | 1,976 | | Non-recurring Equity Compensation Benefit | — | (6,116) | — | (6,116) | | Non-recurring Inventory Write-down | — | — | 830 | — | | Adjusted Operating Income | 55,119 | 37,040 | 114,694 | 75,166 | Net Income Reconciliation The company adjusted GAAP net income by excluding after-tax retention awards, cost optimization initiatives, non-recurring lease acquisition costs, employment-related litigation, equity compensation benefits, and inventory write-downs to present adjusted net income Net Income Reconciliation (thousand USD) | Metric | FY2025 Q2 | FY2024 Q2 | FY2025 YTD | FY2024 YTD | | :----------------------- | :----------- | :----------- | :------------ | :------------ | | Net Income (GAAP) | 42,762 | 33,000 | 83,910 | 64,467 | | Adjustments (After-tax): | | | | | | Retention Awards | 1,668 | 1,220 | 3,811 | 1,239 | | Cost Optimization Initiatives | — | — | 3,638 | — | | Non-recurring Lease Acquisition Costs | 366 | — | 363 | — | | Non-recurring Employment-related Litigation | — | — | — | 1,486 | | Non-recurring Equity Compensation Benefit | — | (4,532) | — | (4,599) | | Non-recurring Inventory Write-down | — | — | 609 | — | | Adjusted Net Income | 44,796 | 29,688 | 92,332 | 62,592 | Diluted Income Per Common Share Reconciliation The company adjusted GAAP diluted EPS by excluding per-share retention awards, cost optimization initiatives, non-recurring lease acquisition costs, employment-related litigation, equity compensation benefits, and inventory write-downs to present adjusted diluted EPS Diluted Income Per Common Share Reconciliation (USD) | Metric | FY2025 Q2 | FY2024 Q2 | FY2025 YTD | FY2024 YTD | | :----------------------- | :----------- | :----------- | :------------ | :------------ | | Diluted EPS (GAAP) | 0.77 | 0.60 | 1.52 | 1.17 | | Adjustments (Per Share): | | | | | | Retention Awards | 0.03 | 0.02 | 0.07 | 0.02 | | Cost Optimization Initiatives | — | — | 0.07 | — | | Non-recurring Lease Acquisition Costs | 0.01 | — | 0.01 | — | | Non-recurring Employment-related Litigation | — | — | — | 0.03 | | Non-recurring Equity Compensation Benefit | — | (0.08) | — | (0.08) | | Non-recurring Inventory Write-down | — | — | 0.01 | — | | Adjusted Diluted EPS | 0.81 | 0.54 | 1.67 | 1.13 | Important Disclosures This section outlines important disclosures, including conference call information, the use of non-GAAP financial measures, and forward-looking statements with associated risk factors Conference Call Information The company held a conference call on August 27, 2025, to discuss Q2 FY2025 financial results, with an audio webcast and replay available on its investor relations website - The conference call was held on August 27, 2025, at 4:30 PM ET[11] - A live audio webcast and replay of the call are available on investor.fivebelow.com[11] Non-GAAP Information This press release includes non-GAAP financial measures like adjusted gross profit, operating income, net income, and diluted EPS, provided for comparable and supplementary insights into business performance, not as substitutes for GAAP results - Non-GAAP financial measures include adjusted gross profit, operating income, net income, and diluted EPS[12] - The company provides these non-GAAP metrics to offer comparable financial data and meaningful supplementary information, aiding investors in understanding business performance[12] - Non-GAAP measures are not GAAP measures and should not be considered in isolation or as substitutes for GAAP reported results[12] Forward-Looking Statements & Risk Factors This press release contains forward-looking statements reflecting management's current views and estimates, with actual results potentially differing significantly due to various risks and uncertainties, and the company undertakes no obligation to update them - Forward-looking statements reflect management's current views and estimates regarding the company's future performance, market position, operations, margins, and capital expenditures[13] - Actual results may differ materially from expectations due to various risks and uncertainties, including global supply chain disruptions, company strategy and expansion plans, talent attraction and retention, IT system disruptions, cyberattacks, AI usage, merchandise sourcing and distribution, reliance on overseas manufacturing, new store site selection, changes in consumer preferences and economic conditions, increased operating costs, inflation, potential recession, extreme weather, geopolitical events, tariffs, and trade restrictions[15] - The company undertakes no obligation to publicly update any forward-looking statements, except as required by applicable securities law[15]