FIVE

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Specialty retailer Five Below (NASDAQ: FIVE) recorded another solid earnings report this month, posting 14.1% comparable sales growth in the second quarter and extending its streak of double-digit comps for the fifth quarter in a row. The value-priced store sells most of its items for $5 or less and is geared toward kids and teens. The Q2 comparable sales increase of 14.1% was better than a year ago, when Five Below posted comparable sales growth of 12.4%, with demand spread across all customer groups and product categories. The report provides evidence that the company's turnaround under CEO Winnie Park, who joined in December 2024, is well underway. Management raised full-year comp guidance to a midpoint of 11% and adjusted earnings per share to $10.07, representing a 51% year-over-year increase. Gross margins expanded by 220 basis points to 35.6%, which helped drive adjusted operating income up over 100% to $113 million. Despite the strong quarter, the comparisons get harder from here. Five Below will now begin comparing its results for the rest of the year against its stronger quarters in 2025, making year-over-year growth harder to achieve. Management expects comparable sales growth of 9% at the midpoint in the third quarter, but just 3% for the fourth quarter. Five Below faces a 15.4% comp from Q4 of last year, followed by a 22.7% comp in Q1 2026. Its social media marketing strategy has proven effective at driving traffic, but its durability will be tested in the year ahead. The investment case remains attractive. Five Below recently opened its 2,000th store and is on its way toward a long-term target of more than 3,500 locations. The retailer is adding roughly 150 net new stores this year, funded by a strong balance sheet with $1.2 billion in net cash. The unit economics remain solid, with new stores generating around $2 million in first-year sales and management reporting a payback period of about one year. That said, matching the productivity of existing stores will still be a challenge for the next thousand. Even if comparable sales settle into the middle single digits once these comparisons flow through, new store expansion plus a normalized comp could still produce mid-teens earnings growth. After a strong run, Five Below stock trades for approximately 25 times forward earnings estimates, a fair valuation for a retail stock. For investors who believe in the company's long-term potential, the stock is worth owning. Before you buy stock in Five Below, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Five Below wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $410,024!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,372,815!* Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 10, 2026. Bryan White has no position in any of the stocks mentioned. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy. Five Below Faces Its Toughest Test Ahead After 5 Consecutive Quarters of Double-Digit Sales Growth was originally published by The Motley Fool

Image source: The Motley Fool. Wednesday, Sept. 2, 2026 at 4:30 p.m. ET VP, Investor Relations - Christiane Pelz Chief Executive Officer - Winifred Park Chief Financial Officer and Treasurer - Daniel Sullivan Operator: Good day, and welcome to the Five Below Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded. I'd now like to turn the conference over to Christiane Pelz, VP, Investor Relations. Please go ahead. Christiane Pelz: Thank you. Good afternoon, everyone, and thanks for joining us today for Five Below's Second Quarter 2026 Financial Results Conference Call. On today's call are Winnie Park, Chief Executive Officer; and Dan Sullivan, Chief Financial Officer and Treasurer. After management has made their formal remarks, we will open the call to questions. Certain comments made during this call may constitute forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such statements, including those described in the press release and our SEC filings. In this presentation, we will refer to our SG&A expenses, which for us includes depreciation and amortization. Additionally, we will be discussing certain non-GAAP financial measures. Please review today's press release, which is posted on our Investor Relations website for a reconciliation of these items to the most directly comparable U.S. GAAP measure and a cautionary statement regarding forward-looking statements. I will now turn the call over to Winnie. Winifred Park: Thank you, Christiane, and hello all. I want to start by thanking our amazing Five Below crew. They continue to deliver tremendous energy, fun and executional excellence in service of our customers, the boss. Their focused collaboration and drive are what truly delivered our exceptional Q2 results. We are so excited to welcome 2 new leaders, Rodney Lastinger, our Chief Retail Officer; and Christos Yatrakis, our Chief Legal Officer, both of whom joined us during the second quarter. Our leadership team is now complete, and I'm looking forward to seeing the impact we can continue to make on our customer and the crew experience. The results in the quarter exceeded our expectations and reinforced the progress we are making in transforming the business, strengthening the brand and deepening Five Below's position as the destination for the kid and the kid in all of us. With our strong first half performance and increased outlook for the second half, we are again raising our full year outlook, which Dan will discuss shortly. The second quarter results further demonstrate that our customer-centric strategy and the foundational enhancements we made to our operating model are working. The strategy is focused on clarifying who our customer is and what we can uniquely offer them, moving from more item-focused merchandising approach to an assortment and product storytelling approach. Redirecting marketing spend for social and digital, simplifying pricing and improving the store experience. The key to our success is speed to market and close collaboration between merchandising, marketing and supply chain and stores to deliver compelling new product stories. Together, these are driving our operating flywheel, which serves as a basis for our durable top line growth. Now on to the second quarter results. Sales surpassed our expectations, delivering $1.3 billion, up 23% versus last year, with adjusted diluted EPS of $1.68, more than double last year's second quarter. Sales growth was driven by both comparable sales growth of 14% and continued unit growth of approximately 9%. Notably, we lapped last year's double-digit comps with double-digit comps and a 26.5% 2-year stack. These results give us even greater conviction in the power of our model. This growth was driven by transactions with robust traffic growth and increased customer engagement from both new and returning customers. We saw broad-based growth across customer cohorts, geographies and product categories. The breadth of the world that grew is a testament to our assortment strategy from room to toys to tech to snacks, and we saw amazing response to newness and trends across price points. We have deployed a repeatable operating capability that enables us to detect customer trends early, amplify these trends with our emerging marketing muscles and execute consistently across the store experience. New stores also continued to deliver strong performance. We opened 52 net new stores across 26 states, including 4 stores that made our all-time spring and summer grand opening list. The success and productivity of our new stores is a testament to the strength of our brand and the unique place we occupy in retail as a kid-focused value-driven destination where newness and trend drive visits and loyalty. We have a long runway to bring Five Below to more customers in more communities and new stores continue to fuel our growth. In July, we celebrated the opening of our 2,000th store, an important milestone for Five Below and our crew. In August, we entered our 47th state with our first store in Idaho, and we continue to explore fill-in opportunities to support our successful launch in the Pacific Northwest, less than 12 months ago. And we are super excited to announce that we plan to enter the market of Puerto Rico in the back half of 2027. This U.S. territory represents a highly attractive opportunity for our brand with a strong customer fit and desirable real estate opportunities. There's currently no retail concept in the market that delivers the same combination of kid-focused fun and value that are hallmarks of Five Below. We expect to open a handful of stores as part of the initial launch and will remain thoughtful and disciplined in how we build our presence in the market over time. We're excited to see our flywheel driving these results. As our merchants identify trend right product, our marketing team amplifies the story in real time, creating excitement for our customers and driving trips to our stores, where we provide a fun and easy experience that converts interest into transactions and repeat visits. As our capabilities grow, the flywheel becomes more powerful, driving continued customer engagement and durable growth. We are still in the early innings of unlocking the full potential of each capability. And while each stands on its own in terms of importance to the model, the relationship and connectivity between all three is key to unleashing the full power of the Five Below brand and driving durable growth. With respect to merchandising, our teams remain focused on what Five Below does well, listening to customers in social, spotting emerging trends and delivering compelling newness at great value through product stories that feel fresh, fun and relevant. Our ability to identify, pursue and scale trends is a meaningful competitive advantage. It brings new customers into the brand. And when they experience the breadth, value and fun of Five Below, it gives them reasons to come back. During the second quarter, our teams delivered a rolling thunder of newness across the store. We amplified numerous trends from Asian food and snacks to the return of slime and create, and we continue to build the overall squishy trend with new collections and fresh drops. We also leaned into cultural events and curtain-up moments that matter to our customers. From World Cup Madness to blockbuster movie releases to music and entertainment trends, our teams moved quickly to bring relevant products to market, including licensed items like FIFA and the NBA as well as the Toy Story and Spider-Man movies and Netflix K-Pop Demon Hunters series. With both the summer and back-to-school curtain-up moments falling during the second quarter, we had lots to celebrate. We helped kick off summer with a full lineup of products for the pool and beach from inflatables to craft kits and all things squishy. For back-to-school, we offered strong value across the assortment that featured both need-to-have pencils and notebooks to must-have novelty giant calculators. We brought the season to life through series of trend forward destinations designed to inspire both our Gen Alpha and Gen Z customers. For Gen Z, for example, we launched our first ever dorm blowup where trend met value, making it easy to create a stylish personalized dorm room without stretching the budget. We curated two collections grounded in pink, gold and leopard print with washable rugs, full length mirrors and amazing storage solutions like our plush storage ottomans. The response to this collection has fueled continued interest in Five Below as a destination for room decor and accessories. On the marketing front, we continue to focus on creating a connected customer journey, which often starts in digital and ends in a store visit. Our customers are social native and meeting them where they are strengthens our connection with them and improves the relevance of the Five Below brand. Beyond social, we are also growing our customer database to further develop a relationship with the customer and inspire repeat visits. This is an emerging capability for Five Below and one that we are excited to develop. Our marketing efforts are helping to drive brand awareness while deepening engagement with new and existing customers. Both customer cohorts grew faster than we had historically experienced and we were pleased to see new customers gained in 2025 return to Five Below throughout the first half of 2026. We are still early in our journey to fully unlock the potential of our marketing strategy and the capabilities we are developing will become increasingly important for customer acquisition, retention and brand strength. Turning to the store experience. We are focused on making our stores easier to shop and more engaging for customers. We aim to make shopping fun for kids and easy for their parents to say yes. Our customers thrive on newness, value and novelty, and we are all about the treat and the treasure hunt. We are continuing to evolve the Five Below store experience. The first step began last year as we moved Five Beyond items in line with their associated departments rather than merchandising them on the back of the store. We have an opportunity to remerchandise this space, which was walled off in the balance of the store. By opening up the space and merchandising a world of play in this area, co-locating toys, games, collectibles and crafts, we believe we can make our aspiration to be America's greatest little toy store come to life. Similarly, we believe that Gen Z customers will appreciate shopping a world of style, beauty and room that are co-located in the store and offer an immersive and engaging experience tailored to this important customer cohort. We believe that creating these immersive worlds in the store with intuitive product adjacencies, clear and more inspiring signage, and improved sight lines from the front to the back of stores will bring our assortment to life and provide inspiration and excitement for our customers as they build their baskets. The store environment, combined with our trend right product assortment and exceptional value is what makes Five Below a one-of-one concept and a destination for discovery. Our stores have also become an increasingly important element of how we were able to amplify trends. Our merchants, marketers and store teams are working together to amplify trends and activate them with impactful in-store events. A great example from the quarter was our Golden Ticket Squishy Dumpling event in May. This 1-day event created excitement for our customers and communities and was flawlessly executed across the chain. It was a great example of building an engaging community at the local store level with a viral trend that has swept across multiple generations from parents to kids and young adults. After the event, our marketing team continued the story in social by taking Goldie, our exclusive Golden Dumpling, on the road with their friends, introducing new exclusive dumpling drops through social storytelling, and keeping customers connected to our brand. Together, the product, social engagement and store execution has helped us to continue capitalizing on the squishy trend, driving traffic to our stores and leading a cultural Zeitgeist. In summary, we are very pleased with our second quarter performance and are encouraged by the strength we are seeing in the business driven by the continued progress across merchandising, marketing and store experience. As we move through the rest of the year and into 2027, we will remain maniacally focused on our customer, the boss, and on continued growth and executing our strategy at a consistently high level. The scale of our growth opportunity across the business and the brand is exciting and we believe the effectiveness of our flywheel positions us well for the future. With that said, I'd like to turn it over to Dan for a deeper discussion of our financial results and our updated outlook for 2026. Daniel Sullivan: Thanks, Winnie. Good afternoon, everyone. I'd like to start by adding my sincere thanks to the Five Below team for another outstanding quarter. The organization's continued collaboration and relentless focus on our customer is reflected in the results we're sharing today. I'll begin my remarks with a review of our second quarter results and then discuss our updated outlook for the third quarter and full year fiscal 2026. My comments will refer to results on an adjusted or non-GAAP basis and therefore, exclude the P&L impact of the tariff refunds amongst other items. Overall, we were extremely pleased with the results in the quarter, highlighted by further execution against our strategies, outsized sales and profit gains and strong free cash flow generation. As we drove transactions in our stores and meaningfully grew comp sales, the fundamental elements of our business model were widely visible: gross margin accretion, a healthy combination of disciplined investments and productivity gains and broad deployment of capital that was prioritized in support of growth. For the second quarter, net sales increased 23% to $1.3 billion, driven by a strong comparable sales increase of just over 14%, primarily due to an increase in comp transactions and new store unit growth of 9%. This was our fifth straight quarter of double-digit comp growth with 2-year stacked growth of 26.5%. We opened 52 net new stores compared to 32 net new stores in the second quarter last year, ending the quarter with 2,022 stores. New store productivity again outperformed, and the strong results from our 2025 and 2026 vintages reinforced the benefits of our disciplined real estate strategy. Adjusted gross profit increased 31% to $449 million. As a percentage of sales, gross margin increased approximately 220 basis points year-over-year to 35.6%, despite meaningfully higher fuel costs. These gains were primarily driven by merch margin expansion, fixed cost leverage on the strong comp sales and an improved shrink reserve rate based on 2025 physical inventory results. Adjusted SG&A expenses totaled $336 million or 26.6% in rate of sale or 140 basis points lower than the second quarter last year. This was largely due to fixed cost leverage on the strong comp sales, partially offset by planned higher marketing investments and incremental labor costs associated with the timing of physical inventory counts. Importantly, despite these timing headwinds, we leveraged labor costs year-over-year. Adjusted operating income more than doubled to $113 million and adjusted operating margin increased approximately 360 basis points to 9%. Adjusted net interest income was about $9 million or $4 million higher than last year, due primarily to a higher average cash balance throughout the quarter. Adjusted net income and adjusted earnings per share for the second quarter each more than doubled to $93 million and $1.68 per share, respectively. During the second quarter, we repurchased approximately 311,000 shares at a total cost of about $60 million as part of the $100 million repurchase authorization from November 2023. Subsequently, our Board approved a new $600 million repurchase authorization without an expiration date. This new authorization offers an attractive alternative for the deployment of excess liquidity and reflects our confidence in the underlying strength of our business and ability to continue to generate healthy free cash flow while self-funding our store growth and delivering industry-leading paybacks on our new stores. We ended the second quarter in a strong cash position with approximately $1.2 billion in cash, cash equivalents and investments, inclusive of $170 million in pretax IEEPA refunds. For the first 6 months of fiscal 2026, CapEx levels were just over $110 million and 36% above the same period last year, as we continue to disproportionately invest in new unit growth, where returns on invested capital are most attractive. Inventory was $941 million at the end of the second quarter, an increase of 18%. On an average per-store basis, inventory dollars were up 8% with units slightly down. In summary, as our strategy gains further traction and enterprise execution levels continue to strengthen, we have increased confidence in the long-term value drivers of our business. We are on strong footing entering the second half of the year with clear momentum, a healthy balance sheet and ample liquidity. As such, we are raising our outlook for the back half of the year. As a reminder, our outlook excludes the IEEPA tariff refunds and does not contemplate future share repurchases. For the third quarter, we expect total sales in the range of $1.21 billion to $1.23 billion or growth of about 18% at the midpoint versus last year's third quarter with comparable sales growth between 8% and 10%. We expect to open approximately 40 net new stores in the third quarter compared to 49 net new stores last year. Adjusted operating margin at the midpoint is expected to be about 6%, an increase of 160 basis points versus last year, driven by both gross margin expansion and SG&A leverage. Adjusted gross margin at the midpoint is expected to increase about 100 basis points, reflective of leverage on fixed costs and higher merch margins, in part due to lower tariff costs. This is partially offset by higher fuel costs on outbound transportation and an unfavorable shrink comparison against last year's true-up. Adjusted SG&A for the third quarter is expected to leverage fixed costs on the 9% comp at the midpoint, while funding increased marketing investment. Net interest income is expected to be approximately $8 million for the third quarter and the effective tax rate is expected to be approximately 25%. Adjusted net income is expected to be $59 million at the midpoint or an increase of 57% versus Q3 last year. Adjusted diluted earnings per share at the midpoint is expected to be $1.07 compared to $0.68 in Q3 last year. Turning to the full year. Sales are expected to be in the range of $5.63 billion to $5.71 billion, an increase of 19% at the midpoint versus last year, and comparable sales growth is expected to be between 10% and 12% or 24% at the midpoint on a 2-year stack basis. Adjusted operating margin for the year is now expected to increase 250 basis points to approximately 12.5% at the midpoint with 3/4 of it driven by gross margin expansion and a quarter by leverage over SG&A. We expect adjusted net interest income of approximately $36 million and a full year effective tax rate of approximately 25%. Adjusted diluted earnings per share is expected to be $10.07 at the midpoint on 55.5 million shares outstanding or growth of 51% versus 2025. Capital expenditures are now expected to be between $250 million and $260 million or 4.5% of net sales at the midpoint, excluding the impact of tenant allowances. This reflects 150 net new store openings and investments in our store experience, infrastructure and technology. In summary, we are pleased with the continued strong performance of the business. We are increasingly confident that our strategy for merchandising, marketing and in-store experience will drive durable top and bottom line growth. And with that, I'll hand the call back over to the operator to start the Q&A session. Operator: [Operator Instructions] And today's first question comes from Randy Konik at Jefferies. Randal Konik: I guess, Winnie, first to you -- and I've been doing this for 26 years, I've only seen transformational changes like this very rarely in my career. So congratulations to you guys. I guess what I want to kind of unpack is the word flywheel and the different kind of ingredients that go into that flywheel, let's say, let's kind of focus on two of them in product and marketing. And if you think about the outperformance of your quarter on the top line, maybe kind of give us some perspective and get a little deeper on how much of it you thought came from the strides you're making in product and the balance in marketing. And then really kind of give us some perspective on your journey on how you're thinking about the evolution of product and marketing into '27, '28 and '29 -- 2029, and how you're kind of thinking about that journey and how that kind of leads to more customers coming into the business and then your existing customer cohorts, how they continue to kind of drive more frequency of shop to the box as well. That would be very helpful. Winifred Park: Thanks so much, Randy, and thank you for the congratulations. I just want to one more time thank the crew here at Five Below for a tremendous quarter. And it's actually our fifth consecutive double-digit comp quarter, which makes us all incredibly proud, but what it really reinforces for me is that the strategy that we put into place last year is working and that the customers are really responding. And so there is nothing more gratifying than to see as a merchant and a marketer that things are really, really working. And I would say that we've got this amazing operating flywheel, and it's grounded in a strategy that was reset. And thank you for acknowledging that the transformation happened quickly. I think that it's a testament to our overall value proposition in the marketplace. We are a one of one concept that is a destination for kids the kid in all of us at extreme value. There's really no one like Five Below. And what we did last year was first put that maniacal focus on the customer, who is our customer, and got really intimate with what it means to be Gen Alpha, Gen Z and a millennial parent and what their needs are. And with that, we remerchandised and we really kind of took a step back and up and thought about not just merchandising items and chasing great one-off ideas but how do we do our job telling really great stories and curated product stories that are grounded in what's happening out there, especially in social media. And we've always been a business of trend, but it's exciting to see that products that we've had in the line for 5 years like the Squishy Dumpling, when it gets acknowledged in social, we now can not only build it from a product perspective, but also meet customers where they are from a marketing perspective. And last year, we worked hard to move our working media spend away from traditional commercial and into social media. And with that, at the end of last year, we could really amplify those trends as well as create our own content on those trends. And we saw a lot of goodness come with that, including better brand awareness. And then right now, we're hard at work and in the very early innings of trying to capture customers at the till and capture their records. When I started, we were at roughly 0%, and we're making great progress in the stores. It's a concerted effort with everyone involved. But with those records, we're able to better direct great content to those individuals and start to build a relationship through e-mail marketing. And we're going to refine that even further. But again, very early innings, and what's really great to see is the customers we captured in 2025 are coming back in '26, those that we gained new in the first quarter of '26 are coming back in the second quarter of '26. So really great stuff. And I would say that if you've got the right content and the right value proposition, those messages when they hit, they drive great visits. The third aspect is really around our stores and the store experience. And again, we are just getting started here in some ways. We're so excited to have Rodney lead the troops and our crews. But in terms of store experience, we are beginning a journey of just making it that much more fun, simpler for customers to shop, starting with our price simplification last year. But also just making these product stories come to life and these 6 curtain-up moments really have galvanized the crew to work together. And this is where you see merchandising, you see marketing, and stores as well as our wonderful supply chain and distribution crew come together to deliver goodness to the customer to celebrate these magical moments in the year. So you asked the question with regards to how much further can we take this? We are very much in the early innings. And what is really great is we've just begun and we are seeing nice resonance in terms of getting that repeat growth up in the double digits, new customer counts up in the double digits. Our brand awareness spiking. And it is, again, the operating flywheel in effect. And we have a lot more ahead of us. And you add on all the white space opportunity we've got with new stores. And it's a very nice position to be in as a growth brand. And I'm also going to pass it on to Dan to fill in some of the details here. Daniel Sullivan: Thanks, Winnie. Randy, you asked about the over-delivery against our outlook for Q2. Remember, when we spoke back in June, we had 1 month in the books essentially for the quarter. We were also looking out trying to anticipate and predict a couple of unknowns, one around what would happen as we cycled and anniversaried the pricing of a year ago. And then second was, of course, the trend profile, particularly school would be letting out and trying to be thoughtful about that. So that was the backdrop. I would point to 3 things that really were the catalyst for the over-delivery against our expectations. One, transaction growth was simply more robust than we anticipated. We drove significant traffic to the store, that traffic converted, and we saw transaction growth that was above what we had expected. I think secondly, part and parcel to that, the trend demand continued. And so we were excited. We had new products to offer. We had a better in-stock position. We did some really cool stuff in-store to activate and we saw a really, really strong response from the customer. And then thirdly, and Winnie highlighted some of the special moments -- if you look at the quarter that was, there are some moments in time, 4th of July would be an example, World Cup would be an example, even early back-to-school where we knew we would have great new interesting product. We knew we would execute at a high level. And even with that as the inputs, those moments outperformed what we had expected. So super excited, obviously, about the results and the over-delivery, and we're heading into the back half of the year with clear momentum. Operator: And our next question today comes from Krisztina Katai with Deutsche Bank. Krisztina Katai: Congratulations on yet another very strong quarter. I wanted to ask about the composition of the better-than-expected traffic growth a bit more. I guess Winnie or Dan, can you unpack sort of like the categories and product stories that were the biggest traffic drivers? Are you seeing traffic increasingly concentrated around major trend events, or are the visits becoming more broad-based across the assortment? If I could just throw in a second one. Just when we look at, obviously, quarter-to-date, you gave us an 8% to 10% guidance. Just anything you can comment on as it relates to the exit rate or how maybe August has trended and if anything, from a composition perspective might be changing? Or are you seeing that continue? Winifred Park: Thanks so much, Krisztina. I'll start, and then I'll let Dan speak in terms of the guidance. The traffic growth that we saw and that we experienced in the quarter was consistent with the traffic growth we saw in quarter 1. And what's been really great is to see that actually, we saw broad-based growth across all of our categories. Certainly, we had really, really nice effect of the squishy trend. And it did survive quarter in, quarter out, which has been terrific. And I think what's been very telling about seeing the traffic that's come from the squishy trend is that those customers have converted to -- into broader Five Below. And we're seeing them buy across the assortment. We're also seeing that our aspiration to be America's greatest little toy store is definitely coming to life. That's something that I put out as an aspiration last year. And we certainly highlighted in holiday, and we're following up now. And I think that the squishy trend has made our games, toys, collectibles, and even our create and crafting departments really relevant. And so it's been great. I think the key with any trends now at Five Below is, while there always have been trends, is what we do with them. And I think that we have new ways of managing them, first and foremost, listening to social and seeing what pops up. Secondly, being able to engage with customers really, really fast through social media and amplify and boost those trends. And then thirdly, provide a product assortment where we're dropping newness and continuing to engage the customer. And we're doing that throughout the store. So that's what's been really, really exciting. And again, we saw nice growth across our world and a lot of resonance. And so I think Five Below is just becoming a brand that's known for affordable, great fun for the kid and the kid in all of us, and I'm going to pass it on to Dan to talk about the quarter. Daniel Sullivan: Yes. Thanks, Winnie. Thanks for the question, Krisztina. I'm not going to get into necessarily the in-quarter performance to date or color. What I would say is just maybe to pivot back, as we thought about how we constructed the guide, let me take you through a bit of the thinking. Obviously, we started with a very strong underlying growth rate. You've heard some of the reasons why here already on the call and some of the points that Winnie has made. But certainly, with an 18% growth, half 1, 28% on a 2-year stack -- we've got new store productivity levels that we're super pleased with. We have real increased proof points that the strategy is resonating and the execution is strong. So that was the basis -- we then did factor in, of course, the impact of trend both on a, let's say, a direct comp basis, but also indirect as it continues to drive traffic and brand awareness. And so you put those elements together for the third quarter, we have profiled what we think is a thoughtful outlook, 9% at the midpoint, over 20% on a 2-year stack. And I would say that we would expect the composition of that comp growth to be very similar to the first 2 quarters of the year, which means largely driven by transaction growth. Operator: And our next question today comes from Matthew Boss at JPMorgan. Matthew Boss: Congrats on another great quarter. So, 2 questions. Winnie, could you elaborate on the rolling thunder approach to newness across categories that you cited? And how you see this impacting traffic frequency and new customer acquisition? And then, Dan, you touched on it, but could you speak to the drivers of this new store performance from the recent cohorts? And the new store productivity levels, which, as you said, continue to materially outpace your historical plan. Winifred Park: Thanks so much, Matt. The rolling thunder approach is something that we have worked really, really hard on, and it's across every single world. I think that Five Below has always been about newness and has been about refreshing the assortments at very specific times during the year. But I think what's different about what we're doing today is one, we're acknowledging that newness is what's driving those visits and that excitement from the customers, and we're talking about it. So along with the newness drops, we're actually engaging in marketing, we're messaging it, we're talking about it, and it's working. Customers acknowledge when we have it, it is driving the visits. We're able to communicate with them now with the growth of our e-mail file as well. The other piece of the rolling thunder approach is being intentional about, again, product storytelling and instead of just launching a bunch of new stuff, really build out a story with connective tissue and think about things with the collections mindset. And so this has been a lot of hard work in the background between merchandising, visual merchandising, marketing, stores to get this right. And I really applaud the teams because we see that the customers are picking up on these cues, and it's driving them into the stores. So it's been terrific. Daniel Sullivan: Yes. Matt, picking up on your second question around new store productivity. Look, we're obviously super pleased with the results and the trend that we're on. It makes what was already a very exciting investment profile outstanding for us. I would point to two main drivers. One, I think just the acknowledgment, the reality of the breadth and depth of the growth that we are seeing. When you see this type of growth across all geographies, all income cohorts, all demographics, there's certainly a rising tide element to this that plays out in your NSP. I think more importantly, though, is I think this is a great reflection of the more disciplined real estate strategy that we put in place about 18 months ago and really applied that strategy not only in white space thinking, which you saw in the Pacific Northwest last year, but also as we thought about fill-in. And this strategy is based upon the notion of much more discipline upfront, really engaging from site selection all the way through to grand opening, holding a really high bar on location, on lease terms, on our ability to then activate and execute the minute we open the doors and knowing how to seed the market, both ahead of the entry and as part of the execution. I think we are meaningfully better on all elements of that than we were 18 months ago, and those results are playing out in our new store productivity. Thanks for the question. Operator: And our next question today comes from Robbie Ohmes at Bank of America. Robert Ohmes: I was hoping this might be more for Dan. Just if you could speak to the tariff refunds and how you think about that cash and -- or how we should think about the back half and sort of investing the tariff refunds as expenses in the back half versus expenses because your traffic is so much higher. So sort of spending into the higher comp trends that you guys keep coming up with and how we should think about that in our models? Daniel Sullivan: Yes. Sure, Robbie. Thanks for the question. Look, our focus from an investment standpoint has been and is going to continue to be primarily focused against our customers and in support of our growth. That is at the heart of our strategy. That is how we have prioritized and will continue to. Now I think what the IEEPA refunds offer us is an ability to accelerate that and with some optionality. And so -- the areas that I would expect that we would think to redeploy these funds: first is going to be to continuing to invest in the customer experience in-store and making sure we are offering our customers the best experience possible. And Winnie's talked about that in her prepared remarks around the importance of how we bring our product to life, how we simplify and improve the shopping experience for our customers and really reinforce the treasure hunt aspect of our offering, which is so important. I think the second one, sort of following on that is applying the same thinking and importance to our digital platform as we think about ourselves through the lens of omnichannel and really improving the online shopping experience for our customers and making sure that, that experience lives up to our brand and matches the in-store experience. And then thirdly, I would point to, we're going to continue to invest in the product, in our hunt and our search for newness and in our value proposition. And so I think as you put all 3 of those together, I would expect that it will disproportionately be seen in CapEx, and it will be seen over time. Thanks, Robbie. Operator: And our question today comes from Michael Lasser at UBS. Michael Lasser: Last quarter, you quantified what the flywheel meant to your business in that the underlying run rate was in the high single-digit range, inclusive of some pricing. Now that you've seen second quarter play out as well as having some time to reflect on that number, is that still a good way to think about the underlying run rate for the business? And as you look to next year and the coming quarters, do we take pause that there are any unique factors that we should consider as we model over the next few quarters that are just going to be difficult to repeat and will act as an impediment to Five Below's ability to sustain a positive comp in the periods ahead? Winifred Park: Thanks, Michael. I'm just going to start in terms of taking a step up and back as we look at what's coming for the balance of the year. What's great about the operating flywheel is that the momentum is starting to speed up and carry itself. And I think the aspects that we've been really pleased with are our disciplined approach of delivering great relevant newness at extreme value with a very focused intention of being a destination for kids. And I think that one-of-one concept and that focus on value is going to be even more resonant as we move through the year. We also have the ability this year versus last year, especially as we look forward to holiday, of bringing in products that the tariffs did not allow us to bring in last year. So we have a full assortment of goodness coming through both for Halloween and holiday that we feel really excited about. And we think it's going to be incredibly compelling to the customer. We've seen really nice new customer acquisition both through trend as well as our marketing efforts. And that just continues to grow and I would say that what's nice is to be able to take those customers and see them repeat with us. And so as we capture more customer records and are able to communicate with those customers and build relationships with them over time, I think that, that is going to be a huge tailwind for us in the quarters coming up. So very, very excited about those elements. And again, early innings on those pieces. And I'm going to pass it on to Dan to lean in here. Daniel Sullivan: Thanks, Winnie. Yes, Michael, I would only add a couple of things. I think the operating flywheel that Winnie talks about which is really the heart of a winning strategy that is being executed at a really high level, that's obviously the catalyst here. I'd point out that the result of this is also reflected in a business that is much more about assortment than it is about item. In the quarter itself, Squishy Dumplings, as an example, was a low single-digit contributor to our comp growth. And that's similar to what we saw in the first quarter. Now we recognize, obviously, it had a bigger impact from a halo perspective and from its ability to contribute to our traffic gains. But I think the other point I would highlight here is the importance of our ability as an organization to self amplify this trend. We've almost taken now what's become a commodity item and made it so unique and so compelling and so interesting that it is actually a Five Below item. And so I think these are all examples of durable elements to this growth story. And while we don't underestimate the impact of Squishy Dumplings, the math would tell us it was a low single-digit contributor and our capabilities here to amplify this trend and drive traffic around the trend are new and growing muscles, which we think also play well into the future. Thanks, Michael. Operator: And our next question today comes from David Bellinger with Mizuho. David Bellinger: Two follow-ups on the social media piece. Any data points you can share around the sales uplift maybe from sort of target markets where this has turned on more than others? And then as you look out further, you mentioned being still early innings with the e-mail capture rate. How sophisticated can the marketing program ultimately get? Can we eventually see much more precision on these paid posts, paid sponsorships on even a household-by-household basis? Winifred Park: Thank you so much, David. So on the social media, I can't share exact figures, but what I can share with you is that we like the results we've seen in terms of pivoting our spend from traditional commercials into social. We really look at the media spend in social and digital by cohort of customer and what's most applicable. And we're also seeing some nice results through connected TV for Gen Alpha through YouTube. So we continue to really mix -- modify the mix of media in order to optimize our ROAS but more importantly, to capture customer attention and to engage with them in a relevant way. And yes, I think we are very early innings on e-mail capture, and we're able to batch and blast at this point to a lot of customers. Our ability to really hone in and personalize and dial in our marketing is early stages, and we will be making those investments over time because we know that they will pay off as we try to grow lifetime value of our customers. We've also got a neat value proposition at Five Below in that we capture customers young and we ladder them through their preteen and teen years. And we would love to see them beyond that. But certainly, as they grow up and out and have their own families, they come back. And so the true lifetime journey at Five Below is one that I think is exceptional. And once we build out our marketing toolkit and our tools, we'll be able to do a lot more to bridge those moments for the customers. Thank you, David. Operator: And our next question today comes from Joe Feldman at Telsey Advisory Group. Joseph Feldman: Yes. And also congrats on a strong quarter, amazing quarter really. And question I had was, you talked a bit about the Five Beyond section in the back of the store and sort of tearing down that wall, and allocating some more space. Can you talk a little bit about how that will be rolled out and implemented and like the cost to do it or the effort and the time? I'm just trying to get a better sense of what we should expect to see over the next coming months and couple of quarters. I would assume it's not going to be an overnight thing. So maybe you could share some thoughts on that. Winifred Park: Absolutely. And yes, on Five Beyond, this has been a journey for us, and it really started last year as we started moving the product out of the area and customers were receiving the products better in their own departmental homes -- which left an open space for us to merchandise and try to make more productive. And so we started the work of looking at what could go back there, how do we literally tear down the signage and get the gondolas that are attached to the wall and a pretty high height, down. See what that would do for the stores, see what that would do in terms of productivity and customer acceptance as well as crew and the crew experience. And all of that has been positive. So we've just begun that journey of moving through stores to make these adjustments and we think it's going to do great things from a couple of points: one, we do believe we will make a very productive splash with the world of play. It's part of a broader strategy to, again, really think about our adjacencies of the products, so they make sense for the customer and the customer shopping, so that they can more effectively build their basket. I think secondly, we want to make sure that whatever we do keeps us incredibly flexible because the business changes all the time, trends change, needs change for our customers. So we really want to keep it flexible and agile. And then I think the third thing is from an overall experience, being able to see back to front for store is important, especially if you're shopping as a family and you've got young kids, you want line of sight. For our crew, it's important in terms of being able to track customers and understand what their needs are. So we think there's a lot of goodness that's going to come out of some of these changes but we're being very disciplined in terms of how we roll it out, monitor it and move forward that way. So I'll let Dan talk a little bit more about that. Daniel Sullivan: Yes. Thanks, Winnie. Yes, Joe, we think this is a fairly modest level of capital investment per store. It's probably in the range of $40,000 to $45,000 of CapEx per store -- it is at the heart, though, of what led to us increasing our CapEx outlook for the year, now in a range of $250 million to $260 million is our conviction to start investing in this program. And so that has begun and is the cause for us taking up our guidance. Thanks, Joe. Operator: And our next question today comes from Scot Ciccarelli with Truist Securities. Scot Ciccarelli: I appreciate the time. So based on the midpoint of your 3Q guide and the full year outlook, it looks like you're still embedding a low single-digit comp in the fourth quarter. I think we recognize 4Q always has some pressures because of the amount of volume that has to flow through the box. But just given your -- the momentum of your trends and the ability to bring in products that you couldn't have last year, why wouldn't you expect 4Q comps to be quite a bit higher than what seems to be implied in the guide? And specifically, do you have real concerns around the physical volume limitations of the stores? Or is this just taking more of a prudent or conservative approach in the outlook? Daniel Sullivan: Scot, thanks for the question. Look, as we've constructed the guide, certainly, run rate momentum of the business factored into that. I think you are right. We've talked about certain opportunities that we left on the cutting room floor last year in the fourth quarter, largely as a result of tariff decisions that we had to make around products. We're certainly super excited about the programs and the products that we're bringing in for the holidays and the teams have already begun planning for and executing. So certainly, a lot there to like. The way we've constructed the fourth quarter, which would position at about a 3% comp growth profile for the quarter. I think to be fair, you also have to look at that on a 2-year basis, given that we have now anniversaried the pricing, and we are cycling, as you know, a fairly big 15% quarter a year ago. So on a 2-year stack, this quarter, our biggest quarter of the year, profiles at an 18%. And just we haven't tried to be conservative. We're prudent. We've just been thoughtful here weighing all of the things I just mentioned and also the reality that we're in terms of the competitive set in that time period and the amount of business we and others will do over a very, very short period of time. We just wanted to be thoughtful balancing the obvious underlying run rate of this business, some of the things we're super excited about and the fact that it is the holiday season. That's all that went into the guide. We don't see it as conservative, we see it as thoughtful. Operator: And our next question today comes from Chuck Grom at Gordon Haskett. Charles Grom: When you look at your store fleet and overall sales per store this year, which is going to be about $2.7 million, is it possible to speak to maybe your top 10% to 20% of the store base? And I guess any common themes between those locations, whether it be brand awareness or others that you can apply to the rest of the fleet? I'm trying to sort of approach the comping the comp question for 2027 from a slightly different angle. Winifred Park: So in terms of the store fleet, that's a great question, Chuck, and that's a great way of thinking through it. We don't see a meaningful variance. It is amazing in terms of the performance across the fleet regardless of vintage or geography. We've seen lift throughout and we don't see a huge meaningful swing between the top percentile versus the bottom either in terms of brand awareness or any other factors. It's been kind of like good throughout the system. I think the bigger piece around comping the comp as we look at 2027 is thinking through how we take these new customers that we've acquired and bring them back and then how we continue to acquire new. Both our new store openings but also in existing because we're increasing our brand awareness. And that can be through marketing, but it also can be through a trend and relevance. And I think that's where we're winning currently. Thank you, Chuck. Operator: And our next question today comes from Jeremy Hamblin at Craig-Hallum Capital. Jeremy Hamblin: I'll add my congratulations. And especially on your operating margins flowing right past the 11% to 12% legacy level and hitting mid-teens this year. I wanted to get into the curtain-up moments. And kind of those 6 times a year, I think we recently kind of seen that for your post back-to-school and kind of early Halloween set. In terms of the efficiency around doing those sets, it seems like your labor investment is quite a bit more than what you've put into it in the past. And given that it's kind of a bigger show of the new assortment than what you've done from a historical perspective, do you feel like you have the formula down from a labor scheduling perspective of how many people you need and when? Or is that something that's a future opportunity as you get more efficient in how to have these WOW curtain-up moments and still run the business even if you have maybe comp levels that are a little bit lower than what you're doing currently? Winifred Park: Thanks for the question, Jeremy. So overall, we have invested more labor in the stores. And it started last year, and it started in earnest because we had gotten to the point where we weren't I would say, doing the one-of-one of bringing products from the back to the front in a way that was -- that allowed us to refill shelves and to really feed the unit throughput business that we've got. And so overall, that's kind of where it all started. With the curtain up moment, we actually have always had new sets in the front of store. The difference between the current curtain up moment is the coordination between corporate and stores and it's merchandising, marketing, and supply chain to get it right, get the right product at the right place at the right time to make sure that the stores are educated about what they're seeing to give them an idea of what they're going to see not only in terms of product content, but also in terms of marketing and gearing for let's not wait to set the floor. Let's get it done. So that when we announce, the customer is there. And so it really is how we collaborate and how we work has been the biggest piece. And yes, of course, I think we're going to get more efficient over time. But in general, we have seen that the visual merchandising of product, the movement of product has actually driven a lot of interest and a lot of engagement by customers, and we like those results. Thank you, Jeremy. Operator: And our next question today comes from Edward Kelly at Wells Fargo. Edward Kelly: Maybe just a follow-up to start, a real question. I was hoping that you could clarify traffic versus ticket. I think when you said something about consistent with Q1, I just didn't know if you meant proportionately similar and tickets still up. And then the real question is just around the gross margin, Dan. I was hoping you could maybe unpack it a little bit, fuel versus shrink versus tariffs this quarter. And then looking out into '27, how we start to think about some of those dynamics, particularly if tariff rates go back up? Winifred Park: Great. Okay. And I'm going to start with transaction. So we saw transaction growth in both quarters and both quarters was driven by traffic. And so that was the shape of the transaction growth, which has been terrific to see. And terrific to see the consistency kind of week in, week out. And I'll pass it on to Dan. Daniel Sullivan: Yes. Thanks, Winnie. Yes, look, the gross margin profile in the second quarter, we were super pleased with. We had 220 basis points of accretion. Obviously, leverage played a role there, but it was really led by merch margin expansion. So here you saw the benefit of pricing that we hadn't yet anniversaried and lower tariff costs. And the shrink was solid. It was slightly below year-over-year, which was helpful. And higher fuel cost was absolutely an offset in the quarter. So you put all of those elements together, and obviously pleased with the profile. As we look forward into the tariff environment, and I think we would expect some level of tailwinds moving into the back half of the year just based on the simple reality that the new rates under Section 301 are lower than the rates we had assumed in our outlook previously. We would expect that, that picture slightly reverses as we head into 2027, again, based on everything that we know because the rates that will be in place under Section 301 are actually slightly higher than the rates that have been in place under the temporary Section 122. So what does it all mean? Look, I think it's an evolving picture for sure. We know that. I think in the second half of the year, while we do anticipate lower tariffs, we don't anticipate material flow through to gross margin because fuel costs are likely going to be higher and will likely offset that. And then as we think about next year, it's obviously way too soon for us to start constructing a plan and talking about that plan. But what I would say is just because we may be operating under a slightly higher tariff environment, I wouldn't expect that, that would necessarily mean a dampening to gross margins. This organization has shown it knows how to address tariffs head on, largely through the cost lens as well. So I wouldn't necessarily paint a picture for next year that the negative tariff environment will impact margins. Much more work to do on that, and we'll certainly talk about that as we talk about '27. Operator: And our next question today comes from Kate McShane with Goldman Sachs. Katharine McShane: We always like to ask about licensing. I think I've asked about it in the last couple of calls. It's very obvious that there is a more concerted effort in the stores when it comes to licensing and it's been an important driver of your product transformation. Just wondered if you could provide any more detail about the role of licensing with regards to the comp in the second quarter, kind of what the movie slate looked like this summer versus previous summers. And just as you implement more, are you seeing a measurable impact to traffic as a result of this initiative. Winifred Park: Thanks for your question, Kate. And licensing is definitely growing -- of growing importance to us. And I think I mentioned that -- the big difference for us in terms of how we do licensing is in the past, I think we were really great at infusing relevant licenses into relevant products. So Stitch in the toys and games world, for instance. And we definitely saw some [indiscernible] licensed kind of IP work for us. Today, we're taking a slightly different approach in that, one, we have the ability to deliver a 360 experience with a license in a full collection. And we definitely did that with Toy Story this year. And in fact, the back part of this year, we're excited because we're going to have, again, a rolling thunder of great movie titles coming out. But the other aspect of licensing that we're excited about is to bring new licenses to market. And you'll be seeing more of that as we move through it. But we think that there is a wonderful complement to what we're seeing in terms of toys, games and collectibles. And if you take an idea like Fugglers that was born really in the world of toys and games applying it to tech product and seeing what else we can do with something that really resonates with our customer. So that's really the difference in terms of how we work on this, and you'll see more of that as we roll through this year. And of course, we've already started on thinking through 27 as well. Thanks for your question. Operator: And our next question today comes from John Heinbockel with Guggenheim. John Heinbockel: Winnie, do you guys have good insight into how -- once you get people in the store how they shop the store is changing in terms of how they work their way through the store, how much time they spend? What has happened so far? Where do you think that is going and is that -- how does that influence your thoughts operationally? Winifred Park: Thanks, John. We, I think, have more learning we can do in terms of insights on how the customer shops the store. Right now, it really is through observation and it's observation through our own visits as well as what we hear from our crew in the field. And this is one of the areas that I think we've got a lot of opportunity with Rodney coming on board is really understanding how the customer engages with the full store -- we think there's a lot of opportunity currently. And so like I said, the move towards eliminating Five Beyond is not just so that we can make that area more productive, but also get those sight lines clear from the front to the back. Five Beyond is actually a walled in area. So detaching those fixtures from the wall and creating an ability for our customer to sneak up and down aisles is the way I like to shop, and I think customers will respond really well to that. Finally, I do think that having adjacencies in the store that makes sense and are directed towards a target customer cohort like a Gen Alpha versus a Gen Z is going to help them build their basket. Right now, they're kind of hopping from place to place in the store, and we think we can do better there. There are 2 trip driver categories that we know of that are fairly consistent, which is the world of candy and the world of tech. And so again, making moves to think about putting them in the front of the store, and making them really easy to see for the customer really easy for whoever wants an in-and-out experience. And I think the last area that I think is opportunity for us is our line queue, just adding those last few items in the basket. So everything will be in service of making that experience funner, better, easier, but also helping our customers build the basket, but we're early stages on this. Thanks for your question, John. Operator: And our next question today comes from Zhihan Ma with Bernstein. Zhihan Ma: A quick 2-part follow-up. One, just on the new store side of things, given the very strong results from the new store openings, what does it take for you to consider reaccelerating the pace of store growth from here? And then a follow-up on the reinvestments of the tariff rebounds. How do you think about balancing the reinvestment needs versus returning capital to shareholders? Daniel Sullivan: I'll take them both. Look, on the new store side, we're obviously not capital constrained, so that isn't necessarily a barrier here. I think the balancing act for us is continuing to be able to execute at a really high level, and we are really scaling these muscles in an impactful way such that we're even confident now to expand into a white space like Puerto Rico, so you can see the confidence that we have. But also new stores is also a subject of what's available and what properties and locations are available. And so we have to balance all of those. We're going to continue to operate with pace and urgency simply because the returns are too good, but we're not going to sacrifice the standards that we have set because we've seen the results here, and we're quite pleased. So that was the first part. On the second part, look, we've demonstrated, I think, certainly, in this earnings release, our ability to balance capital both ways, right? One is to lean in and invest in growth and in our customers, and that is going to continue to be our priority, and you see that in our updated outlook for the year. CapEx moves up, and you've heard the reasons why around the store experience and that discussion. At the same time, in the quarter, we just completed buying shares on the original authorization and then subsequently launched a $600 million authorization. So what we are showing here in terms of how we will deploy capital is a reflection of our confidence in this business and its ability to continue to grow, throw off significant cash flow. And it's a capital allocation strategy that is geared in being able to do both, invest in this business to drive growth and, at the same time, return excess liquidity to shareholders where those returns warranted. And we're quite pleased with that outcome, and we'll begin to execute against it. Thanks for the question. Operator: And our final question today comes from Phillip Blee with William Blair. Phillip Blee: As we just start to think about holiday, I think last year, you began to roll out some of your larger omnichannel initiatives like BOPIS, delivery, et cetera. But maybe you had to turn off some of those capabilities due to the high volumes and staffing constraints. So are you planning to have your full suite of omnichannel functions live this holiday? If so, what kind of comp impact do you think that, that could have? And then what are the margin implications there, assuming there's going to be an uptick in-store labor to make that happen? Winifred Park: Thanks for your question. We are hoping to be able to continue with our omni during this holiday season. And we're still working through the details of what that looks like and how we execute against that. So I really can't comment with regards to what it will cost, et cetera. I will tell you that right now, we're seeing nice results with BOPIS, but also third-party delivery. So we've got a couple of different ways to deliver to the customer, their needs and meet them where they are, and we're still working on the details. Thank you. Operator: That concludes our question-and-answer session. I'd like to turn the conference back over to Winnie Park for closing remarks. Winifred Park: So we want to thank you all for your continued support of Five Below. I also want to add a last huge thank you to the crew for making this quarter possible. We literally could not do this without you. And I would like to invite all of you all to come shop our fabulous Halloween curtain-up. We've got some amazing scary and fun treats. So please come and visit, and we look forward to seeing you all. Thank you. Operator: Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy. Five Below (FIVE) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

In the past week, Five Below reported second-quarter 2026 results showing sales rising to US$1,261.49 million and net income to US$221.4 million, alongside sharply higher earnings per share and stronger performance for the first six months of the fiscal year. The company also raised its full-year 2026 guidance, expanded its store opening plans, and authorized a new US$600 million share repurchase program, signaling management’s confidence in its current business trajectory and capital allocation plans. We’ll now examine how Five Below’s upgraded full-year 2026 guidance and profit improvement influence the existing investment narrative for the stock. Invest in the nuclear renaissance through our list of 91 elite nuclear energy infrastructure plays powering the global AI revolution. To own Five Below, you need to believe its value-focused, trend-aware model can keep pulling in younger shoppers while supporting healthy profitability as it grows. Right now, the key near term catalyst is whether the company can sustain recent traffic and comparable sales strength without eroding margins, while the biggest risk is that ongoing tariff and cost pressures could crimp profits; this quarter’s strong results and upgraded guidance meaningfully ease, but do not remove, that concern. The most relevant announcement for this narrative is the sharply higher full year 2026 guidance, with net sales now expected at US$5.63 billion to US$5.71 billion and net income at US$672 million to US$698 million. This outlook, which explicitly factors in current tariff rates, ties directly into the catalyst of operational simplification and store expansion driving higher earnings, while also giving investors clearer guardrails around the margin risk that has been front of mind. But while the upgraded outlook looks reassuring, investors should still be aware of how tariff exposure and cost inflation could affect... Read the full narrative on Five Below (it's free!) Five Below's narrative projects $6.5 billion revenue and $544.7 million earnings by 2029. Uncover how Five Below's forecasts yield a $264.45 fair value, a 5% upside to its current price. Some analysts were already very optimistic, expecting revenue to reach about US$7.5 billion and earnings around US$636 million, yet they also warned that Five Below’s dependence on physical store expansion in an increasingly digital world could backfire if locations underperform. This latest earnings beat and guidance raise might support that bullish case or prompt a rethink, which is why it is worth comparing these more aggressive assumptions with your own expectations. Explore 3 other fair value estimates on Five Below - why the stock might be worth 31% less than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Five Below research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. Our free Five Below research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Five Below's overall financial health at a glance. The market won't wait. These fast-moving stocks are hot now. Grab the list before they run: Uncover the next big thing with 22 elite penny stocks that balance risk and reward. This technology could replace computers: discover 25 stocks that are working to make quantum computing a reality. Find 47 companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FIVE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in Walmart Inc.? Here are five stocks we like better. Retail earnings reveal a K-shaped consumer trend, with wealthier shoppers spending on home improvement while lower-income households cut back further. Home Depot beat estimates with 6% revenue growth and strong comparable sales, while Lowe's grew sales but cut its full-year outlook amid softer DIY demand. Five Below posted 23% sales growth and Walmart raised guidance despite slower growth, showing hidden strengths even as tariff-related pressures persist. Looking back on the latest earnings season for retail stocks, an unusual K-shaped pattern emerges: lower-income households appear to be struggling, with some value stores having a difficult time reconciling their low prices against increasingly costly inventory. At the same time, though, a handful of specialized stores, including homeowner and contractor supply chains, have had unexpected strong quarters in numerous respects. This data helps to support the growing narrative that different groups of consumers are experiencing the economy in vastly different ways, with those with more disposable cash tending to spend freely and those without being forced to tighten belts to even more extreme degrees. → NVIDIA’s Hugging Face Deal Raises a Bigger Question About Its AI Moat Now The situation means that some companies—like The Home Depot Inc. (NYSE: HD) and Lowe's Companies Inc. (NYSE: LOW)—have done better than others, including Walmart (NASDAQ: WMT) and Five Below Inc. (NASDAQ: FIVE), even while the latter have some hidden wins that suggest a more complicated consumer landscape than some may anticipate. Home Depot's Q2 2026 earnings of $4.92 per share came on the back of revenue of nearly $48 billion, which was up about 6% year over year (YOY). → Palo Alto Networks Is Expensive—But Its Growth Is Accelerating Both metrics were ahead of analyst predictions, fueled by comparable store sales growth of 1.7%, a notably high figure for the company. Home improvement projects seem to be fairly robust, particularly among higher-income homeowners with more discretionary income to spend. → Amazon’s Robot Push Raises a Bigger Question About Its Next Margin Lever The company enjoyed strong demand across many of its departments, supported by its new three-hour express delivery service—this service is also one that may appeal to consumers with more disposable income who are willing to spend extra for the convenience. To be sure, uncertainty about consumer sentiment in general, as well as concerns about housing affordability, may negatively impact some types of home improvement projects. Still, Wall Street analysts have rallied behind Home Depot stock, calling it a Moderate Buy overall and predicting about 18% in future upside. On a macro level, Lowe's would seem to benefit from many of the same factors driving Home Depot's growth. The company is also well-suited to providing for those big-ticket home improvement projects that some consumers are still prepared to spend large amounts of money on. This is evidenced by Lowe's sales growth of 8.3% YOY in the latest quarter, as well as strong free cash flow and pro sales growth that reflects strong contractor demand. The issue for Lowe's may be that its overall competitive position is weaker than Home Depot's. Management recently reduced its full-year outlook due to softer DIY demand. Comparable sales increased by just 0.2% YOY—while better than a decline, it's a much slower rate than Home Depot. In addition, the company decided not to leverage tariff refunds to offer strong summer promotions to the same degree as some of its competitors, and performance suffered as a result. Five Below faces challenges to its margins as a result of significant increases to fuel costs, and tariff benefits are disappearing fast. Still, the company has managed to post some crucial wins in key areas: profitability was still up, with merchandise-margin gains and fixed-cost leverage as two important contributing factors. Where Five Below really succeeded in Q2 2026, though, was in sales growth of 23% YOY, including 14% YOY improvement to comparable sales. This may suggest that consumers are still be willing to spend on discretionary items when the price point is compelling, even as economic pressures make them more selective about larger purchases. Five Below may have cracked the code to continuing to see robust traffic and transactions, even as economic pressures mount. Walmart, on the other hand, disappointed investors with its latest earnings, even though it also raised its full-year guidance. The issue may be that the company posted notably slow sales growth compared to other recent quarters. There also may be a concern that the company's results are artificially benefiting from near-term tariff refunds that are not going to last. Still, Walmart's digital business appears to be thriving and building its margins. Advertising remains a high-growth corner of the company's ecosystem, but it is also supported by growth in membership income, e-commerce, and more. This may be why, despite shares falling by about 2.7% year to date (YTD), analysts remain very bullish on WMT stock overall and see the stock gaining 24%. The article "Retail Earnings Just Exposed a Bigger Divide in the U.S. Consumer Economy" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Costco trades at 47x earnings with four straight quarters of declining comps, while Five Below grew net sales 23% and comparable sales 14%. Dollar General posted its fifth straight quarter of traffic growth while Dollar Tree expanded gross margin 850 basis points, each trading near 17x earnings. Cramer warned Costco may be losing younger shoppers as digital sign-ups renew at lower rates than warehouse members, suggesting weakening cultural grip. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Costco didn't make the cut. Enter your email to see the names that beat COST. The report is free. Enter your email and see if any of your stocks made the cut. On CNBC's opening bell on September 3, 2026, Jim Cramer laid out a split that inverts most people's assumptions about American retail. The membership warehouse with the best reputation in the business is stumbling, and the chains people quietly hit for essentials are running away with the story. Costco (NASDAQ:COST) trades near 47 times trailing earnings while its comparable sales have gone the wrong way for four straight reporting periods. Meanwhile, Five Below (NASDAQ:FIVE), Dollar Tree (NASDAQ:DLTR), and Dollar General (NYSE:DG) have each reported quarters that would look strong in any market. Cramer's read is that the trade-down is real, and it is not treating Costco the way loyal shoppers assume it should. Jim Cramer said, "If you want to know what trading down looks like in a positive way, you just look at what Winnie Park has done at Five Below. Still one more amazing quarter." The endorsement lines up with the numbers. Five Below's second quarter delivered net sales of $1.3 billion, up 23%, with comparable sales growth of 14% and adjusted diluted EPS of $1.68. Park raised full-year adjusted EPS guidance to a midpoint of $10.07. Free Report, Just Released Why Didn't COST Make The Top 10 List? 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. And COST didn't make the cut! The report is free, and you can see why we think each stock is a top investment today. Enter Your Email and See the Ten → Trading down describes household dollars migrating toward retailers positioned where the marginal purchase now happens. Park emphasized broad-based growth across all income cohorts, geographies, and categories, which reads as trade-in behavior from higher-income shoppers rather than pure distress buying. At roughly 31 times earnings, Five Below is priced for growth investors, and estimate revisions have moved higher across every forward quarter. That is a materially different proposition than paying 47 times for a warehouse chain whose top line is decelerating. Cramer invoked Charlie Munger's principle that at extreme multiples the price has already paid for the future, and then applied it to Costco. He is right, and the multiple is best read as a symptom of the underlying problem. CNBC noted that Costco's comparable store sales declined across May, June, July, and August, and also flagged weak renewal rates for membership card purchases. Management on the last call reported the worldwide renewal rate at 89.7%, attributing the pressure to a growing mix of online sign-ups that renew at lower rates than warehouse sign-ups. A membership retailer that struggles to keep its members has a structural issue that a rebound in gasoline traffic cannot fix. Costco's operating leverage lives in the fees line, and although membership fees ran $1.37 billion, up 10.7% in the most recent quarter, a slower renewal cadence eventually reaches that growth rate. The stock has noticed. Costco is down 2% over the past year and sits below both its 50-day and 200-day moving averages. Jim Cramer said, "I don't want it to be a generational thing where my generation is Costco and the newer generations don't look at it like that." That is the most interesting thing he said, and the evidence is genuinely mixed. Bullish evidence: paid executive memberships grew 9.6% to 41.2 million, digitally enabled comparable sales rose 21.5%, and site and app traffic increased 37%. A brand losing the internet does not produce those numbers. Bearish evidence: digital sign-ups renew at a lower rate than warehouse sign-ups. The new member is easier to acquire and harder to keep, which is the pattern you would expect if the brand's cultural gravity were weakening at the margins. Cramer's fear is reasonable. The data does not yet confirm it. Jim Cramer said, "I'm just wondering whether the great value isn't in these dollar stores." CNBC reported strong results from both Dollar Tree and Dollar General. Dollar Tree posted comparable sales up 3.7% with gross margin expanding 850 basis points to 42.9%. Dollar General reported 3.5% same-store sales growth in its fifth consecutive quarter of traffic growth, and CEO Todd Vasos cited strong trade-in across middle- and high-income cohorts. The economics are simple. When budgets tighten, the fixed-cost base of a small-box discount format levers hard against small increases in traffic, and a $1 price point does disproportionate merchandising work for a shopper counting pennies. Dollar Tree at 16 times earnings and Dollar General at 17 times are priced as if the trade-down ends tomorrow, which it likely will not, unless real wages accelerate meaningfully at the low end. The trade-down winners look like a cyclical opportunity that investors would size to their own risk tolerance. What ends the trade is a genuine improvement in purchasing power at the bottom two income quintiles. Until that shows up in the data, Five Below and the dollar stores are where the incremental household dollar is going. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And COST wasn't one of them. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and >;elm:context_link;itc:0;sec:content-canvas" data-yga="{"yLinkElement":"context_link","yModuleName":"content-canvas","yLinkText":"see which stocks made the list -->"}" class="link ">see which stocks made the list -->> Contact [email protected] for any questions or corrections.

Five Below, Inc. FIVE used its Q2 fiscal 2026 earnings call to emphasize traffic, repeat visits and a coordinated merchandising, marketing and store model. The company also raised its full-year outlook after revenues of $1.26 billion and adjusted earnings per share (EPS) of $1.68 topped the Zacks Consensus Estimate of $1.22 billion and $1.34, respectively. Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote Chief financial officer Daniel Sullivan said fiscal 2026 sales are now expected at $5.63 billion to $5.71 billion, with comparable sales growth of 10% to 12%. Prior ranges were $5.4 billion to $5.48 billion and 6% to 8%. Daniel Sullivan also raised adjusted EPS guidance to $9.83 to $10.31 from $8.65 to $9.05. Adjusted operating margin is expected at about 12.5% at the midpoint, up 250 basis points. For Q3, Sullivan guided to sales of $1.21 billion to $1.23 billion, comparable sales growth of 8% to 10% and adjusted EPS of $1.07 at the midpoint. Chief executive officer (CEO) Winnie Park said Q2 marked a fifth consecutive quarter of double-digit comparable sales growth, reinforcing the focus on newness, social and digital marketing, and store experience. Comparable sales rose 14.1%, while net sales increased 22.9%. Park said transaction growth was driven by traffic, with gains across customer cohorts, geographies and product categories. Daniel Sullivan said Squishy Dumplings contributed a low-single-digit amount to comparable sales growth while creating a broader traffic halo. He framed the business as increasingly assortment-driven rather than dependent on one item. The CEO described a rolling approach in which new merchandise is paired with marketing and coordinated store execution. Five Below is also using six seasonal curtain-up moments to concentrate product storytelling. Park said working media spending shifted from traditional commercials toward social media, while the customer database is growing from a near-zero starting point. Customers acquired in 2025 and early 2026 have returned in subsequent periods. Licensing is becoming more collection-oriented, the CEO said, with broader presentations around entertainment properties. She added that the holiday assortment will include products the company chose not to bring in last year because of tariffs. Five Below opened 52 net new stores and ended Q2 with 2,022 locations. Sullivan tied strong new-store productivity to tighter site selection, lease terms and market activation. Park said the company is reworking former Five Beyond space into more open areas. Sullivan put the capital requirement at roughly $40,000 to $45,000 per store, helping lift full-year capital spending guidance to $250 million to $260 million. Sullivan added that growth and customer investment remain the capital priorities. Five Below also approved a new $600 million share repurchase authorization, while tariff refunds provide flexibility to accelerate store, digital and product investments. A Truist Securities analyst questioned the roughly 3% Q4 comparable-sales (comps) growth embedded in the outlook. Sullivan said the forecast balances momentum against 15% year-ago comps and the intensity of holiday selling. A Wells Fargo Securities analyst asked about tariff and margin dynamics. Sullivan said lower tariff costs should help in the second half, but higher fuel costs are expected to offset much of that benefit. A William Blair analyst asked about holiday omnichannel capacity. Park said Five Below is working to continue BOPIS and third-party delivery while addressing operating details and related costs. Park kept the customer-focused operating model at the center of the call, with newness, value and tighter coordination across merchandising, marketing, supply chain and stores. Daniel Sullivan paired that operating focus with a higher outlook while retaining caution around holiday execution, tariff costs and store-experience investment. FIVE carries a Zacks Rank #2 (Buy), with a Growth Score of A, Momentum Score of A, VGM Score of A and Value Score of D. The Zacks framework favors top-ranked stocks paired with an A or B style score, while the D Value Score is a weaker signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks Rank can change as earnings estimates are revised after the just-reported results. The current Rank and Style Scores therefore provide near-term indicators rather than fixed or conclusive signals of future performance. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Five Below, Inc. FIVE reported strong second-quarter fiscal 2026 results, with the top and bottom lines beating the Zacks Consensus Estimate and increasing year over year. Robust traffic, double-digit comparable sales growth and new store openings supported the performance, while margin expansion boosted profitability. Following the better-than-expected second-quarter results and continued business momentum, management raised its fiscal 2026 sales and earnings outlook. As a result, shares of FIVE rose approximately 6.2% in after-hours trading on Sept. 2 following the announcement. Five Below, Inc. price-consensus-eps-surprise-chart | Five Below, Inc. Quote FIVE posted adjusted earnings per share of $1.68, surpassing the Zacks Consensus Estimate of $1.34. The bottom line surged 107.4% from 81 cents in the year-ago quarter. Earnings were $3.99 per share compared with 77 cents a year earlier. The adjusted figure excludes tariff refunds and related interest, as well as retention-award expenses, net of tax. Tariff refunds and related interest contributed $2.33 per share to GAAP earnings.Net sales increased 22.9% year over year to $1,261.5 million from $1,026.8 million. The top line exceeded the Zacks Consensus Estimate of $1,192 million.Comparable sales (comps) rose 14.1%, marking the fifth consecutive quarter of double-digit growth. Management reported two-year stacked comp growth of 26.5%. The increase was primarily driven by higher transactions and robust traffic, with broad-based gains across customer groups, geographies and product categories.Trend-focused assortments, licensed merchandise and summer and back-to-school collections supported customer engagement. Management highlighted social and digital marketing, along with improvements in the shopping experience, as drivers of customer acquisition and repeat visits. Adjusted gross profit grew 30.8% year over year to $449.1 million from $343.3 million. The adjusted gross margin expanded approximately 220 basis points (bps) to 35.6%, which beat our estimate of 35.4%. Higher merchandise margins, fixed-cost leverage from strong comps and an improved shrink reserve rate supported the increase, partly offset by higher fuel costs.Adjusted selling, general and administrative (SG&A) expenses, including depreciation and amortization, totaled approximately $336 million, or 26.6% of sales. The expense ratio improved approximately 140 bps year over year as fixed-cost leverage more than offset increased marketing investments and incremental labor costs associated with the timing of physical inventory counts.Adjusted operating income increased 105.3% to $113.2 million from $55.1 million. The adjusted operating margin expanded approximately 360 bps to 9%, which surpassed our estimate of 7%. Adjusted net income more than doubled to $93.4 million from $44.8 million. Five Below opened 52 net new stores during the quarter and ended the period with 2,022 stores across 46 states, representing 8.8% year-over-year store growth. Management highlighted strong new store productivity and continued opportunities to expand the chain.The company entered Idaho, its 47th state, in August and plans to enter Puerto Rico in the second half of 2027. It expects approximately 40 net new stores in the fiscal third quarter and continues to target approximately 150 net new stores for fiscal 2026. Five Below ended the quarter with cash and cash equivalents of $561.1 million and short-term investment securities of $626.8 million. Total shareholders’ equity was $2,476.1 million as of Aug. 1, 2026. Management noted that the approximately $1.2 billion cash and investment balance included about $170 million in pretax tariff refunds.Inventory totaled $941.2 million, up 17.7% year over year. Average inventory dollars per store increased approximately 8%, while units per store were slightly lower. Capital expenditures totaled $110.4 million in the first six months of fiscal 2026.The company repurchased approximately 311,000 shares for about $60 million during the quarter. On Aug. 29, the board authorized a new $600 million share repurchase program, replacing the remaining capacity under the prior authorization. The new program has no fixed expiration date. For the third quarter of fiscal 2026, Five Below expects net sales of $1.21 billion to $1.23 billion, supported by comps growth of 8-10%. Net income is projected at $56 million to $63 million, with EPS of $1.01 to $1.13.Management expects the third-quarter adjusted operating margin to reach approximately 6% at the midpoint, up 160 bps year over year. Adjusted gross margin is projected to expand about 100 bps, supported by fixed-cost leverage and higher merchandise margins, partly reflecting lower tariff costs. Higher outbound transportation fuel costs and an unfavorable shrink comparison are expected to partially offset these benefits.For fiscal 2026, management raised its sales outlook to $5.63 billion to $5.71 billion from $5.40 billion to $5.48 billion. Comps are expected to increase 10-12% compared with the prior forecast of 6-8%. Adjusted operating margin is projected to expand approximately 250 bps year over year to 12.5% at the midpoint.Adjusted net income is expected to range from $546 million to $572 million, up from $482 million to $504 million. Net income is expected to range from $672 million to $698 million, up from $480 million to $502 million. Adjusted EPS is projected at $9.83 to $10.31 compared with the previous range of $8.65 to $9.05.Gross capital expenditures are expected to total $250 million to $260 million, up from $230 million to $250 million, reflecting investments in new stores, the shopping experience, infrastructure and technology. The outlook incorporates tariff rates currently in place and excludes future tariff refunds and share repurchases. Full-year adjusted earnings also exclude tariff refunds and related interest already recorded, as well as retention awards, net of tax. FIVE Stock Past Three-Month Performance Image Source: Zacks Investment Research FIVE’s shares have gained 26.5% over the past three months as compared with the industry’s growth of 3.4%. FIVE currently carries a Zacks Rank #2 (Buy). We have highlighted three other top-ranked stocks, namely, Target Corporation TGT, Macy's, Inc. M and Ross Stores Inc. ROST.Target Corporation offers guests fashionable, differentiated merchandise and everyday essentials at discounted prices. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Target’s current fiscal-year earnings and sales suggests growth of 37.7% and 4.7%, respectively, from the year-ago actuals. TGT delivered a trailing four-quarter average earnings surprise of 10.5%.Macy's sells a wide range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods. The company carries a Zacks Rank #2 at present. The Zacks Consensus Estimate for Macy's current fiscal-year earnings and sales suggests a decline of 4.3% and growth of 0.1%, respectively, from the year-ago actuals. Macy's delivered a trailing four-quarter average earnings surprise of 211%.Ross Stores operates as an off-price retailer of apparel and home accessories. The company also holds a Zacks Rank #2 at present. The Zacks Consensus Estimate for Ross Stores’ current fiscal-year earnings and sales indicates growth of 32.8% and 12%, respectively, from the year-ago actuals. ROST delivered a trailing four-quarter average earnings surprise of 11.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Ross Stores, Inc. (ROST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Five Below (FIVE) came out with quarterly earnings of $1.68 per share, beating the Zacks Consensus Estimate of $1.34 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +25.37%. A quarter ago, it was expected that this discount retailer would post earnings of $1.7 per share when it actually produced earnings of $2.22, delivering a surprise of +30.59%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Five Below, which belongs to the Zacks Retail - Miscellaneous industry, posted revenues of $1.26 billion for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 3.79%. This compares to year-ago revenues of $1.03 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Five Below shares have added about 30.1% since the beginning of the year versus the S&P 500's gain of 11.5%. While Five Below has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Five Below was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.86 on $1.13 billion in revenues for the coming quarter and $9.19 on $5.5 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Miscellaneous is currently in the bottom 15% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Retail-Wholesale sector, AutoZone (AZO), has yet to report results for the quarter ended August 2026. The results are expected to be released on September 22. This auto parts retailer is expected to post quarterly earnings of $54.97 per share in its upcoming report, which represents a year-over-year change of +12.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. AutoZone's revenues are expected to be $6.71 billion, up 7.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE) : Free Stock Analysis Report AutoZone, Inc. (AZO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research