Five Below's Q2 Sales Jump 24%, Net Income Up 30% Amid Store Expansion

TL;DR

**Five Below is crushing it with massive sales and profit growth, making it a solid buy for continued retail dominance.**

AI Summary

Five Below, Inc. reported a robust financial performance for the thirteen and twenty-six weeks ended August 2, 2025. Net sales for the thirteen weeks increased by 23.7% to $1,026,847 thousand from $830,069 thousand in the prior year. Net income for the thirteen-week period rose by 29.6% to $42,762 thousand, up from $33,000 thousand. For the twenty-six weeks, net sales grew by 21.6% to $1,997,374 thousand from $1,641,932 thousand, while net income increased by 30.2% to $83,910 thousand from $64,467 thousand. The company expanded its store count from 1,667 stores as of August 3, 2024, to 1,858 stores as of August 2, 2025, operating in 44 states. Inventories increased significantly by 25.0% to $799,602 thousand from $639,881 thousand year-over-year, indicating potential for future sales or inventory management challenges. Cash and cash equivalents surged by 169.2% to $562,746 thousand from $209,039 thousand, reflecting strong cash generation from operating activities, which provided $225,658 thousand for the twenty-six weeks ended August 2, 2025.

Why It Matters

Five Below's strong sales and net income growth, coupled with significant store expansion, signals continued market penetration and resilience in the discount retail sector. This performance could attract investors seeking growth in a competitive retail landscape, potentially driving up the stock price. For employees, continued expansion means more job opportunities and stability. Customers benefit from increased accessibility to Five Below's value-oriented products. The broader market sees a strong player in the discount retail segment, potentially putting pressure on competitors to innovate or offer similar value propositions.

Risk Assessment

Risk Level: medium — The company's inventories increased by 25.0% to $799,602 thousand as of August 2, 2025, compared to $639,881 thousand a year prior. This substantial inventory build-up could lead to markdown risks or increased carrying costs if sales growth slows, despite strong current performance. Additionally, the company operates in a highly competitive retail environment, which could impact future profitability.

Analyst Insight

Investors should consider Five Below's strong growth metrics, including a 23.7% increase in net sales and a 29.6% rise in net income for the thirteen weeks ended August 2, 2025, as a positive indicator. While inventory levels warrant monitoring, the robust cash flow from operations of $225,658 thousand suggests financial health. Investors might consider initiating or adding to a position, but should watch for future inventory turnover rates.

Financial Highlights

revenue

$1,997,374 thousand

total Assets

$4,606,538 thousand

net Income

$83,910 thousand

eps

$1.52

cash Position

$562,746 thousand

revenue Growth

+21.6%

Revenue Breakdown

Key Numbers

• $1,026,847 thousand — Net sales for thirteen weeks ended August 2, 2025 (Increased by 23.7% from $830,069 thousand in the prior year.)
• $42,762 thousand — Net income for thirteen weeks ended August 2, 2025 (Increased by 29.6% from $33,000 thousand in the prior year.)
• $1,997,374 thousand — Net sales for twenty-six weeks ended August 2, 2025 (Increased by 21.6% from $1,641,932 thousand in the prior year.)
• $83,910 thousand — Net income for twenty-six weeks ended August 2, 2025 (Increased by 30.2% from $64,467 thousand in the prior year.)
• 1,858 — Number of stores as of August 2, 2025 (Increased from 1,667 stores as of August 3, 2024.)
• $799,602 thousand — Inventories as of August 2, 2025 (Increased by 25.0% from $639,881 thousand as of August 3, 2024.)
• $562,746 thousand — Cash and cash equivalents as of August 2, 2025 (Increased by 169.2% from $209,039 thousand as of August 3, 2024.)
• $225,658 thousand — Net cash provided by operating activities for twenty-six weeks ended August 2, 2025 (Increased from $97,694 thousand in the prior year.)
• $0.77 — Diluted income per common share for thirteen weeks ended August 2, 2025 (Increased from $0.60 in the prior year.)
• $1.52 — Diluted income per common share for twenty-six weeks ended August 2, 2025 (Increased from $1.17 in the prior year.)

Key Players & Entities

• FIVE BELOW, INC. (company) — Registrant
• SEC (regulator) — Securities and Exchange Commission
• Nasdaq Stock Market LLC (company) — Exchange where common stock is registered
• FASB (regulator) — Financial Accounting Standards Board
• Bloomberg (company) — Financial news provider
• Pennsylvania (person) — State of incorporation
• Crew (person) — Company's employees
• Shipcenters (company) — Company's distribution and logistics centers
• ASU No. 2023-09 (regulator) — Accounting Standards Update on Income Taxes
• ASU 2024-03 (regulator) — Accounting Standards Update on Disaggregation of Income Statement Expenses

FAQ

Risk Factors

• Inventory Management [medium — operational]: Inventories increased by 25.0% to $799,602 thousand as of August 2, 2025, from $639,881 thousand in the prior year. This significant increase could pose challenges in managing stock levels, potentially leading to markdowns or obsolescence if sales do not keep pace with inventory growth.
• Competition [medium — market]: As a specialty value retailer, Five Below operates in a competitive landscape. The company's success depends on its ability to maintain its value proposition and appeal to its target demographic amidst numerous other retailers offering similar or alternative products.
• Store Expansion [medium — operational]: The company is actively expanding its store footprint, increasing from 1,667 stores to 1,858 stores as of August 2, 2025. While this drives revenue growth, it also increases operational complexity and requires significant capital investment, with potential risks related to site selection and integration.
• Compliance and Regulations [low — regulatory]: Operating in 44 states subjects Five Below to a variety of state and local regulations, including those related to sales tax, labor laws, and product safety. Non-compliance could result in fines, penalties, and reputational damage.

Industry Context

Five Below operates within the highly competitive retail sector, specifically targeting the tween and teen demographic with a value-oriented, trend-driven merchandise assortment. The company differentiates itself through its 'five-below' price point strategy and curated product selection. Key industry trends include the ongoing shift towards omnichannel retail, the importance of social media marketing for reaching younger consumers, and the constant need to adapt to rapidly changing fashion and product trends.

Regulatory Implications

As a publicly traded company, Five Below is subject to SEC regulations and U.S. GAAP reporting standards. The company must ensure compliance with financial reporting requirements, including timely and accurate disclosures in its 10-Q filings. Additionally, its extensive store operations across multiple states necessitate adherence to various state and local consumer protection, labor, and tax laws.

What Investors Should Do

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Key Dates

• 2025-08-02: End of thirteen and twenty-six week periods — Reporting period for the current 10-Q, showing significant increases in net sales and net income.
• 2025-02-01: End of fiscal year 2024 — Balance sheet date, showing a strong cash position of $331,718 thousand.
• 2024-08-03: End of thirteen and twenty-six week periods in prior year — Comparison period for the current 10-Q, highlighting year-over-year growth.

Glossary

Specialty value retailer

A retail business that focuses on selling a curated selection of products at low price points, typically targeting a specific demographic. (Defines Five Below's core business model and market positioning.)

Inventories

Goods held by a company for sale in the ordinary course of business. This includes raw materials, work-in-progress, and finished goods. (A significant asset for Five Below, its growth indicates expansion but also potential management challenges.)

Cash and cash equivalents

Highly liquid investments with maturities of three months or less from the date of purchase. This includes physical currency, bank deposits, and money market funds. (Indicates the company's short-term financial flexibility and liquidity, which has surged.)

Diluted income per common share

A measure of profitability that accounts for all potential dilutive common shares, such as stock options and convertible securities. (A key metric for investors to assess per-share profitability, showing an increase.)

Operating lease assets

Assets recognized under accounting standards for leases, representing the right to use an asset over the lease term. (A substantial asset for Five Below, reflecting its extensive store network and lease obligations.)

Retained earnings

The cumulative amount of net income that a company has retained over time, rather than distributing to shareholders as dividends. (Shows the company's historical profitability and its ability to reinvest earnings back into the business.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Five Below demonstrates robust growth. Net sales for the thirteen weeks increased by 23.7% and for the twenty-six weeks by 21.6%, indicating strong top-line momentum. Net income also saw substantial increases of 29.6% and 30.2% respectively, suggesting improved profitability. The company's cash position has dramatically improved, surging by 169.2%, while its store count has expanded by over 10%. A key area to watch is the significant 25.0% increase in inventories, which outpaces revenue growth slightly and could present future management challenges.

Key Financial Figures

• $0.01 — hares of the registrant's common stock, $0.01 par value, outstanding as of August 27,

Filing Documents

• five-20250802.htm (10-Q) — 853KB
• form10q_q22025fiveex311.htm (EX-31.1) — 11KB
• form10q_q22025fiveex312.htm (EX-31.2) — 11KB
• form10q_q22025fiveex321.htm (EX-32.1) — 4KB
• form10q_q22025fiveex322.htm (EX-32.2) — 4KB
• 0001177609-25-000041.txt ( ) — 4588KB
• five-20250802.xsd (EX-101.SCH) — 34KB
• five-20250802_cal.xml (EX-101.CAL) — 52KB
• five-20250802_def.xml (EX-101.DEF) — 97KB
• five-20250802_lab.xml (EX-101.LAB) — 433KB
• five-20250802_pre.xml (EX-101.PRE) — 286KB
• five-20250802_htm.xml (XML) — 606KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page

Consolidated Financial Statements (unaudited)

Item 1. Consolidated Financial Statements (unaudited) 4 Unaudited Consolidated Balance Sheets as of August 2 , 2025, February 1, 2025, and August 3, 2024 4 Unaudited Consolidated Statements of Operations for the Thirteen and Twenty -Six Weeks Ended August 2 , 2025 and August 3 , 2024 5 Unaudited Consolidated Statements of Shareholders' Equity for the Thirteen and Twenty - Six Weeks Ended Augu st 2 , 2025 and Augu s t 3 , 2024 6 Unaudited Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended Augu st 2 , 2025 and August 3 , 2024 8 Notes to Unaudited Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 28

Controls and Procedures

Item 4. Controls and Procedures 29

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 30

Risk Factors

Item 1A. Risk Factors 31

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 31

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 31

Other Information

Item 5. Other Information 31

Exhibits

Item 6. Exhibits 32 3

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS FIVE BELOW, INC. Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share data) August 2, 2025 February 1, 2025 August 3, 2024 Assets Current assets: Cash and cash equivalents $ 562,746 $ 331,718 $ 209,039 Short-term investment securities 107,418 197,073 118,680 Inventories 799,602 659,500 639,881 Prepaid income taxes and tax receivable 4,657 4,649 14,140 Prepaid expenses and other current assets 110,495 158,427 136,899 Total current assets 1,584,918 1,351,367 1,118,639 Property and equipment, net of accumulated depreciation and amortization of $ 841,073 , $ 749,923 , and $ 662,744 , respectively. 1,253,808 1,261,728 1,246,880 Operating lease assets 1,746,255 1,706,542 1,627,483 Other assets 21,557 19,937 20,142 $ 4,606,538 $ 4,339,574 $ 4,013,144 Liabilities and Shareholders' Equity Current liabilities: Line of credit $ — $ — $ — Accounts payable 371,801 260,343 255,965 Income taxes payable — 51,998 — Accrued salaries and wages 36,532 19,743 12,574 Other accrued expenses 204,926 149,495 164,226 Operating lease liabilities 311,365 274,863 252,440 Total current liabilities 924,624 756,442 685,205 Other long-term liabilities 10,288 8,210 8,662 Long-term operating lease liabilities 1,707,261 1,706,704 1,642,055 Deferred income taxes 57,118 59,891 69,481 Total liabilities 2,699,291 2,531,247 2,405,403 Commitments and contingencies (note 6) Shareholders' equity: Common stock, $ 0.01 par value. Authorized 120,000,000 shares; issued and outstanding 55,146,485 , 55,028,682 , and 55,006,099 shares, respectively. 550 549 549 Additional paid-in capital 167,480 152,471 141,029 Retained earnings 1,739,217 1,655,307 1,466,163 Total shareholders' equity 1,907,247 1,808,327 1,607,741 $ 4,606,538 $ 4,339,574 $ 4,013,144 See accompanying notes to consolidated financial statements. 4 FIVE BELOW, INC. Consolidated Statements of Operations (Unaudited) (in thousands,

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) (1) Summary of Significant Accounting Policies (a) Description of Business Five Below, Inc. is a specialty value retailer offering merchandise targeted at the tween and teen demographic. The Company offers an edited assortment of products, with most priced at $ 5 and below. As used herein, "Five Below," the "Company," refers to Five Below, Inc. (collectively with its wholly owned subsidiaries), except as expressly indicated or unless the context otherwise requires. As used herein, references to "Crew" refer to the Company's employees, and references to "Shipcenters" refer to the Company's distribution and logistics centers. The Company's edited assortment of products includes select brands and licensed merchandise. The Company believes its merchandise is readily available, and that there are a number of potential vendors that could be utilized, if necessary, under approximately the same terms the Company is currently receiving; thus, it is not dependent on a single vendor or a group of vendors. The Company is incorporated in the Commonwealth of Pennsylvania and, as of August 2, 2025, operated in 44 states, excluding Alaska, Hawaii, Idaho, Montana, Oregon, and Washington. As of August 2, 2025 and August 3, 2024, the Company operated 1,858 stores and 1,667 stores, respectively, each operating under the name "Five Below." The Company also sells its merchandise on the internet, through the Company's fivebelow.com e-commerce website and mobile app, offering home delivery and the option to buy online and pick up in store. Additionally, the Company sells merchandise through on-demand third-party delivery services to enable its customers to shop online and receive convenient delivery. (b) Fiscal Year The Company operates on a 52/53-week fiscal year ending on the Saturday closest to January 31. References to "fiscal year 2025" or "fiscal 2025" refer to the period from February 2, 2025 to January 31, 2026, whic