Truist has revised its price target for Five Below (FIVE, Financial), moving it up from $112 to $128, while maintaining a Hold rating on the stock. The company's first-quarter results showed robust performance, and the beginning of the second quarter appears even more promising. However, despite these positive developments, the ongoing impact of tariffs is anticipated to challenge earnings as the year progresses, potentially affecting margins in the latter half.
The analysis predicts a deceleration in sales trends during the second half of the year due to more challenging comparisons and the persistent risk posed by tariffs. Investors are advised to remain cautious as these factors may weigh on Five Below's financial performance in the upcoming months.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Five Below Inc (FIVE, Financial) is $117.89 with a high estimate of $160.00 and a low estimate of $90.00. The average target implies an downside of 2.76% from the current price of $121.24. More detailed estimate data can be found on the Five Below Inc (FIVE) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, Five Below Inc's (FIVE, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Five Below Inc (FIVE, Financial) in one year is $232.25, suggesting a upside of 91.56% from the current price of $121.24. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Five Below Inc (FIVE) Summary page.
FIVE Key Business Developments
Release Date: June 04, 2025
- Total Sales: $970.5 million, a 19.5% increase from the previous year.
- Comparable Sales Increase: 7.1%, driven by a 6.2% increase in transactions and a 0.9% increase in ticket size.
- Adjusted Gross Profit: $328.4 million, a 24.6% increase year-over-year.
- Adjusted Gross Margin: Increased by 140 basis points to 33.8%.
- Adjusted Operating Income: $59.6 million, with an operating margin increase of 140 basis points to 6.1%.
- Adjusted Net Income: $47.5 million, compared to $33.0 million last year.
- Adjusted Earnings Per Share (EPS): $0.86, up from $0.60 in the previous year.
- Cash and Cash Equivalents: Approximately $624 million, with no debt.
- Inventory: Approximately $702 million, with a 2% decrease in average inventory per store.
- New Store Openings: 55 new stores, ending the quarter with 1,826 stores, a 13.8% increase year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Five Below Inc (FIVE, Financial) reported a strong first quarter with sales income exceeding expectations, achieving $971 million in sales and a comparable sales increase of 7.1%.
- The company opened 55 new stores across 20 states, with two locations ranking among the top 25 all-time grand openings.
- Five Below Inc (FIVE) demonstrated strong product resonance with customers, particularly in categories like beauty, novelty food, and tech, leading to increased transactions.
- The company has successfully improved its store experience by investing in labor and simplifying processes, resulting in better customer service and in-stock positions.
- Five Below Inc (FIVE) has effectively leveraged social media and digital marketing to enhance brand awareness and drive traffic to stores, particularly during key selling periods like Easter and spring break.
Negative Points
- The tariff environment presents additional complexity, with Five Below Inc (FIVE) facing significant tariff-related costs impacting gross margins.
- The company anticipates operating margin compression due to higher incentive compensation costs and investments in store labor.
- Five Below Inc (FIVE) is experiencing challenges in maintaining operating margins, with a projected decline of approximately 200 basis points for the full year.
- The company is navigating a dynamic global trade environment, requiring swift mitigation plans and adjustments in sourcing and pricing strategies.
- Five Below Inc (FIVE) is undergoing a transition in leadership, with the departure of CFO Kristy Chipman, which may impact financial strategy and execution.
