PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (unaudited) This section presents the unaudited consolidated financial statements of Five Below, Inc. for the periods ended August 2, 2025, and August 3, 2024, including balance sheets, statements of operations, statements of shareholders' equity, and statements of cash flows, along with accompanying notes detailing significant accounting policies and financial instrument disclosures Unaudited Consolidated Balance Sheets The consolidated balance sheets show an increase in total assets, primarily driven by higher cash and cash equivalents and inventories, alongside an increase in total liabilities and shareholders' equity as of August 2, 2025, compared to prior periods Metric | Metric | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | August 3, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :----------------------------- | | Cash and cash equivalents | $562,746 | $331,718 | $209,039 | | Inventories | $799,602 | $659,500 | $639,881 | | Total current assets | $1,584,918 | $1,351,367 | $1,118,639 | | Total liabilities | $2,699,291 | $2,531,247 | $2,405,403 | | Total shareholders' equity | $1,907,247 | $1,808,327 | $1,607,741 | Unaudited Consolidated Statements of Operations Five Below, Inc. reported significant growth in net sales, operating income, and net income for both the thirteen and twenty-six weeks ended August 2, 2025, compared to the same periods in the prior year, leading to increased basic and diluted earnings per common share Metric | Metric | Thirteen Weeks Ended August 2, 2025 (in thousands) | Thirteen Weeks Ended August 3, 2024 (in thousands) | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :------------------------ | :----------------------------------------------- | :----------------------------------------------- | :------------------------------------------------- | :----------------------------------------------- | | Net sales | $1,026,847 | $830,069 | $1,997,374 | $1,641,932 | | Operating income | $52,365 | $41,509 | $103,212 | $77,659 | | Net income | $42,762 | $33,000 | $83,910 | $64,467 | | Basic income per common share | $0.78 | $0.60 | $1.52 | $1.17 | | Diluted income per common share | $0.77 | $0.60 | $1.52 | $1.17 | Unaudited Consolidated Statements of Shareholders' Equity Shareholders' equity increased from February 1, 2025, to August 2, 2025, primarily due to net income and share-based compensation expense, partially offset by common shares withheld for taxes Metric | Metric | Balance, February 1, 2025 (in thousands) | Balance, August 2, 2025 (in thousands) | | :-------------------------- | :------------------------------------- | :------------------------------------- | | Total shareholders' equity | $1,808,327 | $1,907,247 |\n| Share-based compensation expense | $9,672 (Feb-May) / $8,392 (May-Aug) | $18,064 (Total for 26 weeks) |\n| Net income | $41,148 (Feb-May) / $42,762 (May-Aug) | $83,910 (Total for 26 weeks) |\n| Common shares withheld for taxes | $(1,254) (Feb-May) / $(2,581) (May-Aug) | $(3,835) (Total for 26 weeks) | Unaudited Consolidated Statements of Cash Flows The company experienced a significant increase in net cash provided by operating activities for the twenty-six weeks ended August 2, 2025, compared to the prior year, while investing activities shifted from a net use to a net provision of cash, and financing activities saw a substantial decrease in cash used Cash Flow Activity | Cash Flow Activity | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :---------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | 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 | Notes to Unaudited Consolidated Financial Statements These notes provide detailed information on Five Below's significant accounting policies, including business description, fiscal year, basis of presentation, recently issued accounting pronouncements, use of estimates, fair value of financial instruments, revenue recognition, leases, income per common share, line of credit, commitments and contingencies, share-based compensation, income taxes, and segment reporting - Five Below, Inc. is a specialty value retailer targeting tween and teen demographics, operating 1,858 stores in 44 states as of August 2, 2025, and also sells merchandise through its e-commerce website and third-party delivery services1921 - The company is evaluating the impact of new accounting standards: ASU No. 2023-09 (Income Taxes - Improvements to Income Tax Disclosures) effective for fiscal years beginning after December 15, 2024, and ASU 2024-03 (Disaggregation of Income Statement Expenses) effective for fiscal years beginning after December 15, 20262425 Disaggregated Revenue by Product Group | Product Group | Thirteen Weeks Ended August 2, 2025 (Amount) | Percentage of Net Sales | Thirteen Weeks Ended August 3, 2024 (Amount) | Percentage of Net Sales | | :---------------- | :------------------------------------------- | :---------------------- | :------------------------------------------- | :---------------------- | | Leisure | $470,463 | 45.8 % | $374,905 | 45.2 % | | Fashion and home | $309,295 | 30.1 % | $249,386 | 30.0 % | | Snack and seasonal| $247,089 | 24.1 % | $205,778 | 24.8 % | | Total | $1,026,847 | 100.0 % | $830,069 | 100.0 % | | Product Group | Twenty-Six Weeks Ended August 2, 2025 (Amount) | Percentage of Net Sales | Twenty-Six Weeks Ended August 3, 2024 (Amount) | Percentage of Net Sales | | :---------------- | :------------------------------------------- | :---------------------- | :------------------------------------------- | :---------------------- | | Leisure | $905,369 | 45.3 % | $748,739 | 45.6 % | | Fashion and home | $593,064 | 29.7 % | $477,658 | 29.1 % | | Snack and seasonal| $498,941 | 25.0 % | $415,535 | 25.3 % | | Total | $1,997,374 | 100.0 % | $1,641,932 | 100.0 % | - As of August 2, 2025, the Company had no borrowings under its $225.0 million Revolving Credit Facility and was in compliance with all applicable covenants55 - A putative class action lawsuit was filed against Five Below, Inc. and a former senior officer, alleging violations of securities laws, which the Company intends to vigorously defend against58150 - As of August 2, 2025, there was $48.5 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements, expected to be recognized over a weighted average vesting period of 2.0 years67 Effective Tax Rates | Period | August 2, 2025 | August 3, 2024 | | :---------------------- | :------------- | :------------- | | Thirteen Weeks Ended | 26.2 % | 25.9 % | | Twenty-Six Weeks Ended | 26.7 % | 24.8 % | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, including an overview of operations, key performance indicators, detailed analysis of consolidated results for the thirteen and twenty-six weeks ended August 2, 2025, liquidity and capital resources, and critical accounting policies SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This section highlights that the report contains forward-looking statements subject to various risks and uncertainties, which could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these statements - Key risk factors include impacts of inflation, failure to implement growth strategy, supply chain disruptions, tariffs, price increases, dependence on store/website traffic, inability to manage inventory, changes in competitive environment, seasonality, natural disasters, and cyberattacks8089 Overview Five Below, Inc. is a rapidly growing specialty value retailer targeting tween and teen customers, offering a broad range of merchandise, mostly priced at $5 and below. As of August 2, 2025, the company operated 1,858 stores in 44 states and maintains an e-commerce presence - As of August 2, 2025, Five Below operated 1,858 stores in 44 states83 - The company offers merchandise primarily priced at $5 and below, including select brands and licensed merchandise83 How We Assess the Performance of Our Business and Non-GAAP Measures Management assesses business performance using key financial measures such as net sales, comparable sales, cost of goods sold and gross profit, selling, general and administrative expenses (SG&A), and operating income. The section defines these metrics and discusses factors affecting them, including seasonality and growth strategy - Net sales are highest in the fourth fiscal quarter due to the year-end holiday season, reflecting the seasonal nature of the business88 - Comparable sales include net sales from stores open for at least 15 full months and e-commerce sales, with specific exclusions for relocated or expanded stores and adjustments for 53-week fiscal years9091 - Gross profit is net sales less cost of goods sold, with gross margin as a percentage of net sales. Cost of goods sold includes merchandise costs, inbound freight, tariffs, shipping/handling, store occupancy, distribution, and buying expenses95 - SG&A expenses comprise payroll, compensation, marketing, advertising, depreciation, and amortization. These are expected to increase with continued store growth and can fluctuate due to performance-based compensation99100 Results of Consolidated Operations The company achieved strong financial results for both the thirteen and twenty-six weeks ended August 2, 2025, with significant increases in net sales, gross profit, and net income, driven by new store openings and positive comparable sales growth Consolidated Statements of Operations Data (Thirteen Weeks Ended) | Metric | August 2, 2025 (in millions) | August 3, 2024 (in millions) | Change (in millions) | % Change | | :------------------------ | :--------------------------- | :--------------------------- | :------------------- | :------- | | Net sales | $1,026.8 | $830.1 | $196.7 | 23.7 % | | Cost of goods sold | $684.5 | $558.3 | $126.2 | 22.6 % | | Gross profit | $342.3 | $271.8 | $70.5 | 26.0 % | | Operating income | $52.4 | $41.5 | $10.9 | 26.3 % | | Net income | $42.8 | $33.0 | $9.8 | 29.6 % | | Comparable sales increase | 12.4 % | (5.7)% | - | - | | Gross margin | 33.3 % | 32.7 % | +0.6 % | - | Consolidated Statements of Operations Data (Twenty-Six Weeks Ended) | Metric | August 2, 2025 (in millions) | August 3, 2024 (in millions) | Change (in millions) | % Change | | :------------------------ | :--------------------------- | :--------------------------- | :------------------- | :------- | | Net sales | $1,997.4 | $1,641.9 | $355.5 | 21.6 % | | Cost of goods sold | $1,331.1 | $1,106.6 | $224.5 | 20.3 % | | Gross profit | $666.3 | $535.3 | $131.0 | 24.5 % | | Operating income | $103.2 | $77.7 | $25.5 | 32.8 % | | Net income | $83.9 | $64.5 | $19.4 | 30.2 % | | Comparable sales increase | 9.8 % | (4.1)% | - | - | | Gross margin | 33.4 % | 32.6 % | +0.8 % | - | Liquidity and Capital Resources The company plans for approximately $210 million in cash capital expenditures for fiscal 2025, primarily for 150 net new stores, funded by cash from operations, cash on hand, investments, and its Revolving Credit Facility. Working capital requirements fluctuate seasonally, peaking in the third and fourth fiscal quarters - Planned cash capital expenditures for fiscal 2025 are approximately $210 million, with $110 million allocated to construct and open approximately 150 net new stores122 - The company expects to fund capital expenditures and working capital from cash on-hand, net cash provided by operating activities, and its Revolving Credit Facility, which has $225 million available as of August 2, 2025124127 - No share repurchases were made during the twenty-six weeks ended August 2, 2025, under the $100 million program approved in November 2023125 Cash Flows Summary (Twenty-Six Weeks Ended) | Cash Flow Activity | August 2, 2025 (in millions) | August 3, 2024 (in millions) | | :---------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $225.7 | $97.7 | | Net cash provided by (used in) investing activities | $8.7 | $(22.0) | | Net cash used in financing activities | $(3.4) | $(46.4) | | Net increase during period in cash and cash equivalents | $231.0 | $29.3 | Critical Accounting Policies and Estimates The preparation of financial statements requires management to make estimates and assumptions, which are detailed in the Annual Report. Actual results may vary materially from these estimates Contractual Obligations Since February 2, 2025, the company has entered into 85 new retail leases with average terms of approximately 10 years, resulting in future minimum lease payments of approximately $168.3 million - From February 2, 2025, to August 2, 2025, the company committed to 85 new retail leases with average terms of approximately 10 years, totaling approximately $168.3 million in future minimum lease payments136 Off-Balance Sheet Arrangements For the thirteen weeks ended August 2, 2025, the company was not party to any material off-balance sheet arrangements that are reasonably likely to have a current or future effect on its financial condition or results of operations Recently Issued Accounting Pronouncements This section refers to Note 1 of the consolidated financial statements for a detailed description of recently issued accounting pronouncements Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity, affecting interest income from investments and potential borrowings under its variable-rate Revolving Credit Facility. The impact of inflation on historical results has been immaterial, with mitigation strategies in place - The company's principal market risk is interest rate sensitivity, primarily due to its interest-bearing investment securities and variable-rate Revolving Credit Facility141142 - An immediate 100 basis point change in interest rates is not expected to materially affect the fair market value of the short-term investment portfolio or operating results141 - The effects of inflation on historical results have been immaterial, and the company employs strategies like sourcing from different vendors and changing product mix to minimize future impacts144 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they are effective at a reasonable assurance level. There were no material changes to internal control over financial reporting during the thirteen weeks ended August 2, 2025 - Disclosure controls and procedures were evaluated as effective at a reasonable assurance level as of August 2, 2025145 - No material changes to internal control over financial reporting occurred during the thirteen weeks ended August 2, 2025146 PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings in the ordinary course of business, including a putative class action lawsuit alleging securities law violations. Management believes the ultimate resolution of these matters will not have a material adverse effect on the company's financial condition or results of operations - A class action lawsuit was filed against Five Below, Inc. and a former senior officer, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5150 - The company intends to vigorously defend against the class action, believing it to be without merit, and the potential impact of unspecified damages is uncertain150 Item 1A. Risk Factors This section refers to the risk factors discussed in the company's Annual Report, stating that there have been no material changes to these risks. Additional unknown or immaterial risks could also adversely affect the business - There have been no material changes in the company's risk factors from those previously disclosed in its Annual Report152 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company had no repurchases of its common stock during the thirteen weeks ended August 2, 2025, under its $100 million share repurchase program, which was approved in November 2023 - No shares were repurchased under the $100 million share repurchase program during the thirteen weeks ended August 2, 2025153 Item 3. Defaults Upon Senior Securities This item is not applicable to the company for the reporting period Item 4. Mine Safety Disclosures This item is not applicable to the company for the reporting period Item 5. Other Information During the thirteen weeks ended August 2, 2025, none of the company's directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading plans - No Rule 10b5-1 trading plans were adopted or terminated by directors or Section 16 officers during the thirteen weeks ended August 2, 2025156 Item 6. Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including letter agreements, consulting agreements, certifications of the CEO and CFO, and XBRL financial information
Five Below(FIVE) - 2026 Q2 - Quarterly Report