Five Below Q2 Earnings & Sales Beat Estimates, FY25 View Raised

Core Insights - Five Below, Inc. (FIVE) reported strong second-quarter fiscal 2025 results, with both net sales and earnings exceeding expectations and showing year-over-year growth. The company has raised its fiscal 2025 outlook [1][9]. Financial Performance - Adjusted earnings per share for Q2 were 81 cents, surpassing the Zacks Consensus Estimate of 61 cents, and reflecting a 50% increase from 54 cents in the same quarter last year [2]. - Net sales reached $1.03 billion, marking a 23.7% year-over-year increase and exceeding the Zacks Consensus Estimate of $997 million [2][9]. - Comparable sales increased by 12.4% year over year, driven by an 8.7% rise in comparable transactions and a 3.4% increase in average ticket size [3]. Margins and Costs - Adjusted gross profit grew by 26.2% year over year to $343.3 million, with an adjusted gross margin of 33.4%, up approximately 60 basis points from the previous year [4]. - Selling, general and administrative (SG&A) costs rose by 28.3% to $242.3 million, with SG&A as a percentage of net sales increasing by about 90 basis points to 23.6% [5]. - Adjusted operating income was $55.1 million, compared to $37 million in Q2 of fiscal 2024, with an adjusted operating margin of 5.4%, up approximately 90 basis points [5]. Financial Snapshot - As of the end of Q2, the company had cash and cash equivalents of $562.7 million and short-term investment securities of $107.4 million, with total shareholders' equity at $1.91 billion [6]. Store Expansion - Five Below opened 32 net new stores, bringing the total to 1,858 stores across 44 states, representing an 11.5% increase from the same quarter last year. The company plans to open 150 stores by the end of fiscal 2025 [7]. Future Guidance - For Q3 fiscal 2025, Five Below anticipates net sales between $950 million and $970 million, reflecting a 5-7% increase compared to $843.7 million in Q3 fiscal 2024 [8]. - The updated fiscal 2025 outlook projects net sales of $4.44-$4.52 billion, an increase from the previous guidance of $4.33-$4.42 billion, with adjusted earnings per share expected to be $4.76-$5.16 [15][18]. - Net income is forecasted between $253 million and $275 million, with adjusted net income projected between $264 million and $286 million, both reflecting upward adjustments from previous estimates [17].