Q3 2025 Five Below Inc Earnings Call Transcript
Key Points
- Five Below Inc (FIVE) reported its second consecutive quarter of over $1 billion in sales with double-digit comparable sales growth.
- Net sales grew 23% with comparable sales growth of over 14%, driven by both transactions and ticket increases.
- The company opened 49 net new stores, ending the quarter with over 1,900 stores, and saw strong performance in new markets like the Pacific Northwest.
- Adjusted diluted earnings per share grew 62% year over year to $0.68, reflecting disciplined expense management.
- The company increased its marketing investment in social media, resulting in traffic growth both online and in stores.
- Five Below Inc (FIVE) faced challenges with tariffs, which impacted gross margins, although the impact was slightly less than initially expected.
- The company experienced shrink issues, although there was some improvement in the third quarter.
- SG&A expenses were higher due to increased incentive costs, partially offsetting fixed cost leverage.
- Inventory levels increased nearly 25% on a per-store basis, primarily due to strategic decisions to accelerate receipts in response to the global trade environment.
- The company faces uncertainty in the consumer environment and competitive pressures as it enters the critical holiday season.
Good day, and welcome to the Five Below third-quarter 2025 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Christiane Pelz, Vice President, Investor Relations. Please go ahead.
Good afternoon, everyone, and thanks for joining us today for Five Below's third-quarter 2025 financial results conference call. On today's call are Winnie Park, Chief Executive Officer; and Daniel Sullivan, Chief Financial Officer and Treasurer.
After management has made their formal remarks, we will open the call to questions. I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended.
Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results
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