3 Must-Know Facts About Five Below You'll Want to Check Out Before Buying the Stock

Company Overview - Five Below's shares are currently trading 48% below their peak established in August 2021, but have surged 102% in the past two months [1][2] - The company has rapidly expanded its physical presence, with 1,826 stores as of May 3, up from 385 a decade ago, and aims for 3,500 stores in the future [5][6] Market Dynamics - Despite the rise of online shopping, 84% of retail spending in the U.S. still occurs in brick-and-mortar stores, benefiting companies like Five Below [4] - The retail sector is highly competitive, with consumers having unlimited choices and low barriers to entry, making Five Below's current momentum noteworthy [9][10] Financial Performance - In the first quarter of fiscal 2025, Five Below reported a 19.5% year-over-year revenue growth, driven by a 7.1% increase in same-store sales [10] - Management projects same-store sales growth of 3% to 5% for the full fiscal year, indicating a potential slowdown but still showing positive momentum [11] Valuation Insights - Five Below's stock is trading at a price-to-earnings ratio of 25.9, which is a slight premium to the S&P 500 index but a discount to its trailing three-year average [12] - Analyst estimates suggest earnings per share will rise at a 6% compound annual rate from fiscal 2024 to fiscal 2027, which may not support significant stock price appreciation [13]