Five Below (NASDAQ:FIVE) Reports Upbeat Q2, Full-Year Outlook Slightly Exceeds Expectations

August 27, 2025 at 16:09 PM EDT

FIVE Cover Image

Discount retailer Five Below (NASDAQ: FIVE) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 23.7% year on year to $1.03 billion. On top of that, next quarter’s revenue guidance ($960 million at the midpoint) was surprisingly good and 3.8% above what analysts were expecting. Its non-GAAP profit of $0.81 per share was 29.4% above analysts’ consensus estimates.

Is now the time to buy Five Below? Find out by accessing our full research report, it’s free.

Five Below (FIVE) Q2 CY2025 Highlights:

Revenue: $1.03 billion vs analyst estimates of $991.8 million (23.7% year-on-year growth, 3.5% beat)
Adjusted EPS: $0.81 vs analyst estimates of $0.63 (29.4% beat)
Adjusted EBITDA: $108.6 million vs analyst estimates of $89.35 million (10.6% margin, 21.6% beat)
The company lifted its revenue guidance for the full year to $4.48 billion at the midpoint from $4.38 billion, a 2.4% increase
Management raised its full-year Adjusted EPS guidance to $4.96 at the midpoint, a 10.6% increase
Operating Margin: 5.1%, in line with the same quarter last year
Free Cash Flow was $48.28 million, up from -$32.35 million in the same quarter last year
Locations: 1,858 at quarter end, up from 1,667 in the same quarter last year
Same-Store Sales rose 12.4% year on year (-5.7% in the same quarter last year)
Market Capitalization: $7.82 billion

Winnie Park, CEO of Five Below, said, “We are excited to deliver second quarter results that exceeded our sales and earnings expectations. These results demonstrate the effectiveness of our strategy and are a testament to the hard work, dedication and tight collaboration of our teams across the company, especially in an ever-changing tariff environment. We have been maniacally focused on executing with excellence, specifically curating Wow! newness in our assortment, simplifying our pricing while maintaining extreme value, improving in-stock levels and optimizing product flow. Importantly, our results demonstrate that our customers are recognizing us as the destination for fun at great value for the KID and the KID in all of us.”

Company Overview

Often facilitating a treasure hunt shopping experience, Five Below (NASDAQ: FIVE) is an American discount retailer that sells a variety of products from mobile phone cases to candy to sports equipment for largely $5 or less.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $4.23 billion in revenue over the past 12 months, Five Below is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. On the bright side, it can grow faster because it has more white space to build new stores.

As you can see below, Five Below’s 16.4% annualized revenue growth over the last six years (we compare to 2019 to normalize for COVID-19 impacts) was impressive as it opened new stores and increased sales at existing, established locations.

This quarter, Five Below reported robust year-on-year revenue growth of 23.7%, and its $1.03 billion of revenue topped Wall Street estimates by 3.5%. Company management is currently guiding for a 13.8% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 8.7% over the next 12 months, a deceleration versus the last six years. Still, this projection is noteworthy and indicates the market is forecasting success for its products.

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Store Performance

Number of Stores

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Five Below sported 1,858 locations in the latest quarter. Over the last two years, it has opened new stores at a rapid clip by averaging 15.5% annual growth, among the fastest in the consumer retail sector. This gives it a chance to scale into a mid-sized business over time.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Same-Store Sales

The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.

Five Below’s demand within its existing locations has been relatively stable over the last two years but was below most retailers. On average, the company’s same-store sales have grown by 1.8% per year. This performance suggests it should consider improving its foot traffic and efficiency before expanding its store base.

In the latest quarter, Five Below’s same-store sales rose 12.4% year on year. This growth was an acceleration from its historical levels, which is always an encouraging sign.

Key Takeaways from Five Below’s Q2 Results

We were impressed by Five Below’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 4.2% to $150.68 immediately after reporting.

Indeed, Five Below had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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