Five Below's Q3 Earnings Soar on Strong Sales, Store Expansion

TL;DR

**FIVE is crushing it with massive profit and sales growth, making it a strong buy for holiday season upside.**

AI Summary

Five Below, Inc. reported a significant increase in net income and revenue for the thirteen and thirty-nine weeks ended November 1, 2025. For the thirteen weeks, net income surged to $36.505 million from $1.687 million in the prior year, while net sales grew to $1,038.293 million from $843.710 million. Year-to-date, net income reached $120.415 million, up from $66.154 million, and net sales increased to $3,035.667 million from $2,485.642 million. Operating income for the thirteen weeks was $43.305 million, a substantial improvement from an operating loss of $606 thousand in the same period last year. The company expanded its store count to 1,907 stores as of November 1, 2025, from 1,749 stores a year prior, operating in 44 states. Inventories increased significantly to $1,112.263 million from $817.832 million year-over-year, indicating potential for strong holiday sales but also a risk of inventory obsolescence. Cash and cash equivalents also saw a healthy rise to $350.983 million from $169.702 million.

Why It Matters

Five Below's robust performance, marked by a 1,907 store count and significant revenue growth, signals strong consumer demand for value-oriented retail, especially among its target tween and teen demographic. This growth positions Five Below favorably against competitors in the discount retail space, demonstrating effective market penetration and operational efficiency. For investors, the substantial increase in net income and cash flow suggests healthy profitability and financial stability, potentially leading to increased shareholder value. Employees benefit from a growing company, which can mean more job opportunities and stability. Customers gain from an expanding network of stores and diverse product offerings, reinforcing Five Below's market presence and competitive edge.

Risk Assessment

Risk Level: medium — The company's inventories increased significantly by 35.9% year-over-year, from $817.832 million on November 2, 2024, to $1,112.263 million on November 1, 2025. While this could be strategic for holiday sales, it also presents a risk of inventory obsolescence or markdown if sales do not meet expectations. Additionally, the company is evaluating new accounting pronouncements (ASU 2023-09, ASU 2024-03, ASU 2025-06) which could impact future financial statements and disclosures.

Analyst Insight

Investors should consider increasing their position in FIVE, given the strong financial performance and strategic store expansion. Monitor inventory levels closely in the next quarter to ensure efficient sales conversion and watch for any impacts from the new accounting standards being evaluated.

Financial Highlights

debt To Equity

N/A

revenue

$1,038.293M

operating Margin

4.17%

total Assets

$4,789.318M

total Debt

N/A

net Income

$36.505M

eps

$0.66

gross Margin

N/A

cash Position

$350.983M

revenue Growth

+23.1%

Revenue Breakdown

Key Numbers

• $1,038.293M — Net Sales (13 weeks) (Increased from $843.710M, a 23.1% increase year-over-year.)
• $36.505M — Net Income (13 weeks) (Increased from $1.687M, a 2064.5% increase year-over-year.)
• $3,035.667M — Net Sales (39 weeks) (Increased from $2,485.642M, a 22.1% increase year-over-year.)
• $120.415M — Net Income (39 weeks) (Increased from $66.154M, an 82.0% increase year-over-year.)
• $1,112.263M — Inventories (Increased from $817.832M, a 35.9% increase year-over-year.)
• 1,907 — Total Stores (Increased from 1,749 stores, a 9.0% increase year-over-year.)
• $350.983M — Cash and Cash Equivalents (Increased from $169.702M, a 106.8% increase year-over-year.)
• $0.66 — Diluted EPS (13 weeks) (Increased from $0.03, a 2100% increase year-over-year.)

Key Players & Entities

• FIVE BELOW, INC. (company) — Registrant
• Bloomberg (company) — Publisher
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• $36.505 million (dollar_amount) — Net income for thirteen weeks ended November 1, 2025
• $1.687 million (dollar_amount) — Net income for thirteen weeks ended November 2, 2024
• $1,038.293 million (dollar_amount) — Net sales for thirteen weeks ended November 1, 2025
• $843.710 million (dollar_amount) — Net sales for thirteen weeks ended November 2, 2024
• 1,907 (number) — Number of stores operated as of November 1, 2025
• 1,749 (number) — Number of stores operated as of November 2, 2024

FAQ

Risk Factors

• Inventory Management [medium — operational]: Inventories increased significantly to $1,112.263 million as of November 1, 2025, from $817.832 million in the prior year. While this suggests preparedness for strong sales, it also poses a risk of inventory obsolescence if sales targets are not met.
• 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 retail competitors.
• Store Expansion [medium — operational]: The company expanded its store count to 1,907 stores as of November 1, 2025, from 1,749 stores a year prior. Rapid expansion can strain resources and operational capacity if not managed effectively.
• Economic Sensitivity [low — financial]: The company's performance is sensitive to consumer spending patterns, which can be impacted by economic downturns. A significant portion of its merchandise is priced at $5 and below, making it appealing during economic uncertainty but also potentially vulnerable to shifts in discretionary spending.

Industry Context

Five Below operates in the highly competitive specialty retail sector, targeting the tween and teen demographic with a value-oriented merchandise assortment, primarily priced at $5 and below. The industry is characterized by rapid trend cycles, a strong emphasis on in-store experience, and increasing integration of e-commerce. Key trends include the demand for licensed merchandise, novelty items, and affordable gifting options.

Regulatory Implications

As a publicly traded company, Five Below is subject to SEC regulations and accounting standards (GAAP). Compliance with financial reporting requirements, including accurate disclosure of financial performance and risk factors, is crucial. There are no specific industry-specific regulatory risks highlighted in this filing beyond standard retail operational compliance.

What Investors Should Do

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Key Dates

• 2025-11-01: End of 13 and 39 week periods — Reporting period for the current 10-Q, showing significant revenue and net income growth.
• 2025-02-01: End of prior fiscal year — Balance sheet date for comparison, showing growth in assets and equity.
• 2024-11-02: End of prior year 13 and 39 week periods — Comparative period for the current year's income statement, highlighting substantial year-over-year improvements.

Glossary

Operating income (loss)

Profitability from core business operations before interest and taxes. (Shows a significant turnaround from a loss of $606 thousand to an income of $43.305 million for the 13-week period, indicating improved operational efficiency.)

Inventories

The cost of goods held for sale in the ordinary course of business. (A substantial increase to $1,112.263 million suggests strong sales expectations but also carries a risk of obsolescence.)

Cash and cash equivalents

Highly liquid investments with maturities of three months or less. (The increase to $350.983 million provides the company with financial flexibility and liquidity.)

Diluted income per common share

Net income per share, assuming all dilutive potential common shares (like stock options) were exercised. (Jumped to $0.66 from $0.03, reflecting the significant increase in net income on a per-share basis.)

Operating lease assets

The right-of-use assets recognized for leases. (Represents a significant portion of the company's assets ($1,743.865 million), reflecting its extensive store footprint.)

Accounts payable

Amounts owed to suppliers for goods and services purchased on credit. (Increased to $519.651 million, which can be a sign of increased purchasing activity to support sales growth.)

Year-Over-Year Comparison

Compared to the prior year's filing period, Five Below demonstrates robust growth. Net sales for the thirteen weeks ended November 1, 2025, increased by 23.1% to $1,038.293 million, and net income saw a dramatic rise of 2064.5% to $36.505 million. Operating income shifted from a loss to a significant gain. Inventories and cash positions have also strengthened considerably, indicating healthy business expansion and improved liquidity, though the substantial inventory build-up warrants attention.

Key Financial Figures

• $0.01 — hares of the registrant's common stock, $0.01 par value, outstanding as of December 3

Filing Documents

• five-20251101.htm (10-Q) — 915KB
• letteragreementdatedseptem.htm (EX-10.2) — 39KB
• letteragreementdatedoctobe.htm (EX-10.3) — 26KB
• form10q_q32025fiveex311.htm (EX-31.1) — 11KB
• form10q_q32025fiveex312.htm (EX-31.2) — 11KB
• form10q_q32025fiveex321.htm (EX-32.1) — 4KB
• form10q_q32025fiveex322.htm (EX-32.2) — 4KB
• 0001177609-25-000052.txt ( ) — 4868KB
• five-20251101.xsd (EX-101.SCH) — 35KB
• five-20251101_cal.xml (EX-101.CAL) — 52KB
• five-20251101_def.xml (EX-101.DEF) — 102KB
• five-20251101_lab.xml (EX-101.LAB) — 439KB
• five-20251101_pre.xml (EX-101.PRE) — 291KB
• five-20251101_htm.xml (XML) — 653KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page

Consolidated Financial Statements (unaudited)

Item 1. Consolidated Financial Statements (unaudited) 4 Unaudited Consolidated Balance Sheets as of November 1 , 2025, February 1, 2025, and November 2 , 2024 4 Unaudited Consolidated Statements of Operations for the Thirteen and Thir ty-Nine Weeks Ended November 1 , 2025 and November 2 , 2024 5 Unaudited Consolidated Statements of Shareholders' Equity for the Thirteen and Thirty-Nine Weeks Ended November 1, 2025 and November 2, 2024 6 Unaudited Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended November 1, 2025 and November 2, 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 19

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) November 1, 2025 February 1, 2025 November 2, 2024 Assets Current assets: Cash and cash equivalents $ 350,983 $ 331,718 $ 169,702 Short-term investment securities 173,515 197,073 46,941 Inventories 1,112,263 659,500 817,832 Prepaid income taxes and tax receivable 12,527 4,649 20,348 Prepaid expenses and other current assets 110,834 158,427 157,396 Total current assets 1,760,122 1,351,367 1,212,219 Property and equipment, net of accumulated depreciation and amortization of $ 889,949 , $ 749,923 , and $ 705,959 , respectively. 1,252,212 1,261,728 1,259,768 Operating lease assets 1,743,865 1,706,542 1,692,978 Long-term investment securities 11,261 — — Other assets 21,858 19,937 20,354 $ 4,789,318 $ 4,339,574 $ 4,185,319 Liabilities and Shareholders' Equity Current liabilities: Line of credit $ — $ — $ — Accounts payable 519,651 260,343 352,180 Income taxes payable 82 51,998 — Accrued salaries and wages 57,583 19,743 28,758 Other accrued expenses 184,530 149,495 143,388 Operating lease liabilities 335,087 274,863 351,062 Total current liabilities 1,096,933 756,442 875,388 Other long-term liabilities 8,760 8,210 8,962 Long-term operating lease liabilities 1,679,106 1,706,704 1,616,964 Deferred income taxes 54,283 59,891 68,153 Total liabilities 2,839,082 2,531,247 2,569,467 Commitments and contingencies (note 6) Shareholders' equity: Common stock, $ 0.01 par value. Authorized 120,000,000 shares; issued and outstanding 55,158,204 , 55,028,682 , and 55,010,438 shares, respectively. 550 549 549 Additional paid-in capital 173,964 152,471 147,453 Retained earnings 1,775,722 1,655,307 1,467,850 Total shareholders' equity 1,950,236 1,808,327 1,615,852 $ 4,789,318 $ 4,339,574 $ 4,185,319 See accompanying notes to consolidated financial statements. 4 FIVE BELOW, INC. Consolidated S

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 November 1, 2025, operated in 44 states, excluding Alaska, Hawaii, Idaho, Montana, Oregon, and Washington. As of November 1, 2025 and November 2, 2024, the Company operated 1,907 stores and 1,749 stores, respectively, each operating under the name "Five Below." The Company 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, wh