Five Below(US:FIVE) ZACKS·2025-12-04 18:06Core Insights - Five Below, Inc. (FIVE) reported strong third-quarter fiscal 2025 results, with both net sales and earnings exceeding expectations, leading to an upward revision of its fiscal 2025 outlook [1][9] Financial Performance - Adjusted earnings per share reached 68 cents, surpassing the Zacks Consensus Estimate of 22 cents, and increased by 61.9% from 42 cents in the same quarter last year [4] - Net sales amounted to $1.04 billion, reflecting a 23.1% year-over-year increase and exceeding the Zacks Consensus Estimate of $970 million [4] - Comparable sales grew by 14.3% year over year, driven by higher transaction volumes and ticket sizes [4] Operational Highlights - The company experienced solid operational momentum due to increased traffic from digital marketing, successful market openings, and enhanced in-store experiences [2] - Customer engagement was bolstered through seasonal promotions and a broader merchandising strategy, including products priced above $5 and more licensed offerings [3] Margin and Cost Analysis - Adjusted gross profit increased by 25.6% year over year to $351.8 million, with the adjusted gross margin rising approximately 70 basis points to 33.9% [5] - Selling, general and administrative (SG&A) costs rose 20.4% to $259.2 million, but as a percentage of net sales, SG&A costs decreased by approximately 50 basis points to 25% [6] - Adjusted operating income was $45.1 million, up from $27.6 million in the same quarter last year, with an adjusted operating margin of 4.3% [6] Store Expansion - Five Below opened 49 net new stores, bringing the total to 1,907 stores across 44 states, marking a 9% increase from the previous year [8] - The company plans to open 150 additional stores by the end of fiscal 2025, aiming for a total of 1,921 stores [8] Future Guidance - For the fourth quarter of fiscal 2025, net sales are expected to be between $1.58 billion and $1.61 billion, with a projected 6-8% increase in comparable sales [10] - The company anticipates net income for the fourth quarter to be between $186 million and $196 million, with adjusted earnings per share expected to range from $3.34 to $3.52 [11][12] Updated Fiscal 2025 Outlook - Five Below revised its fiscal 2025 net sales projection to $4.62-$4.65 billion, up from $4.44-$4.52 billion, indicating stronger anticipated performance [15] - The adjusted operating margin is expected to be 8.9% at the mid-point, with net income forecasted between $306 million and $316 million [16] - Earnings per share are projected to be between $5.51 and $5.69, reflecting an increase from the previous guidance [17]