Five Below (NASDAQ:FIVE) reported stronger-than-expected annual results after the bell Wednesday, with growth accelerating across revenue, same-store sales and profit, as the discount retailer continued to benefit from strong demand for value-priced discretionary goods and an expanding store base.
The company said fiscal 2025 revenue rose 22.9% to $4.76 billion, while comparable sales climbed 12.8%. Full-year adjusted earnings per share increased 40.7% to $6.47.
In the fourth quarter, revenue rose 24.3% to $1.73 billion, topping estimates, with comparable sales up 15.4% on broad-based gains in both traffic and average ticket size.
The strong performance reflects continued consumer demand for value-oriented retail offerings, even as shoppers navigate an uncertain macroeconomic environment marked by persistent inflation pressures and uneven economic growth.
Five Below’s growth has been supported by steady store expansion and merchandising strategies aimed at younger consumers. The company ended the year with 1,921 stores, opening 150 net new locations during fiscal 2025, though the pace of expansion slowed compared with the prior year.
Looking ahead, Five Below forecast fiscal 2026 revenue between $5.2 billion and $5.3 billion, with adjusted earnings per share expected in the range of $7.69 to $8.20.
The outlook points to continued growth, though analysts cautioned that comparisons will become more challenging in the coming quarters.
Analysts at Jefferies said the results were strong but warned that valuation may be stretched, noting that growth could moderate as tougher year-over-year comparisons set in later in the fiscal year. They maintained a Hold rating on the stock while raising their price target to $223.
The firm highlighted robust margin performance in the quarter, driven by operating leverage and improvements in shrink, even as the company absorbed tariff-related headwinds.
Shares of Five Below were up 8.3% in early trading following the results.