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FIVE BELOW, INC (FIVE)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 (quarter ended Feb 1, 2025) modestly beat Street: revenue $1.39B vs $1.387B consensus* and adjusted EPS $3.48 vs $3.37 consensus*; comps fell 3.0% and margins compressed, but results were above company outlook .
  • Management highlighted product “newness,” sharpened value in $1–$5, and improved in-store execution; CEO Winnie Park signaled a clearer brand focus on the “kid and the kid in all of us” and simplified pricing .
  • FY25 guide embeds tariff headwinds: net sales $4.21–$4.33B, flat–+3% comps, adjusted EPS $4.10–$4.72; Q1 FY25 revenue $905–$925M, adjusted EPS $0.50–$0.61 .
  • Key catalyst: credible operational reset is gaining traction, but near-term tariff-driven gross margin pressure (~100 bps for FY, ~200 bps in 2H) and SG&A deleverage temper earnings power; any evidence of sustained shrink improvement and traffic/product momentum could drive estimate revisions and sentiment .

What Went Well and What Went Wrong

  • What Went Well

    • Sales and EPS exceeded internal outlook; operational execution improved (staffing, workflow, in-stock rates), and leaning into trend-right value items worked in holiday .
    • Clearer focus on core $1–$5 value and simplified pricing; curated “newness” and ability to chase winning trends (e.g., exclusive beauty) emphasized as competitive advantages .
    • Early signs of shrink improvement following higher store labor and engagement; per-store inventory down ~2% YoY; balance sheet remains strong with ~$529M in cash/investments and no debt at year-end .

  • What Went Wrong

    • Comps declined 3.0% in Q4; adjusted gross margin fell ~60 bps (fixed-cost deleverage, timing of product costs), and adjusted operating margin declined ~170 bps .
    • Tariff headwinds expected to reduce FY25 gross margin by ~100 bps (about double in 2H); price increases (mainly at $1–$5) and vendor/sourcing mitigation only partially offset .
    • Management “left sales on the table” after trimming orders midyear and then chasing improving demand; store remodel conversions remain largely paused as focus shifts to new store openings .

Financial Results

MetricQ4 2024 (YoY Prior)Q3 2025Q4 2025
Revenue ($USD Millions)$1,337.7 $843.7 $1,390.9
Adjusted Diluted EPS ($)$3.65 $0.42 $3.48
Adjusted Operating Income ($USD Millions)$268.4 $27.6 $253.3
Comparable Sales (%)n/a+0.6% -3.0%
Net New Stores (Quarter)n/a82 22
Ending Store Countn/a1,749 1,771
Adjusted Operating Margin (%)n/a3.3% 18.2%

Notes:

  • Q4 2025 refers to quarter ended Feb 1, 2025; Q4 2024 refers to quarter ended Feb 3, 2024 (13 vs 14 weeks prior year) .
  • Adjusted figures per company reconciliation .

Estimates vs Actuals (Wall Street – S&P Global)

PeriodRevenue Estimate ($M)*Revenue Actual ($M)Beat/MissEPS Estimate ($)*EPS Actual ($)Beat/Miss
Q2 2025822.1*830.1 Bold Beat0.54*0.54 Inline
Q3 2025801.0*843.7 Bold Beat0.17*0.42 Bold Beat
Q4 20251,387.3*1,390.9 Bold Beat3.37*3.48 Bold Beat
  • Values with asterisks are retrieved from S&P Global.
  • “Bold Beat” denotes a meaningful positive surprise relative to consensus.

KPI details (Q4 2025):

  • Comp transactions -1.9%, average ticket -1.0% (drivers of -3.0% comp) .
  • Adjusted gross margin down ~60 bps to ~40.5% (fixed cost deleverage, timing of certain product costs; partially offset by lower shrink) .
  • Adjusted operating margin 18.2% .

Non-GAAP adjustments (Q4/FY): retention awards, cost-optimization charges, inventory write-off, and other items; see reconciliations for gross profit, operating income, net income, and diluted EPS .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance (3/19/25)Change
Net Sales ($B)Q1 FY25n/a$0.905–$0.925 New
Comparable Sales (%)Q1 FY25n/a~Flat to +2% New
Adjusted Diluted EPS ($)Q1 FY25n/a$0.50–$0.61 New
Net Sales ($B)FY25n/a$4.21–$4.33 New
Comparable Sales (%)FY25n/a~Flat to +3% New
Adjusted Diluted EPS ($)FY25n/a$4.10–$4.72 New
CapEx ($M, gross)FY25n/a~$210–$230 New
New Stores (count)FY25n/a~150 New
Tax Rate (%)FY25n/a~25% New

Note: Management explicitly includes current tariffs in guidance; mitigation assumed but not full offset .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 call, Dec 4, 2024)Previous Mentions (Q2 FY25 8-K, Aug 27, 2025)Current Period (Q4 2025 call)Trend
Tariffs impact/mitigationPlaybook from 2018–19; vendor collaboration, sourcing shifts, price where needed; ~60% COGS from China Guide raised later, but tariff environment “ever-changing”; strategy execution cited ~100 bps FY GM headwind; ~200 bps in 2H; selective price adj. (mainly $1–$5), vendor negotiations, India sourcing office Worsening near term (headwind)
Store experience & laborAdded store labor; manned self-checkout; ~50 bps SG&A in Q3; improved execution and in-stocks n/aContinued labor investments; shrink improved in most cohorts; cautious until sustained Improving
ShrinkLapped prior-year reserve; improvement contributed to Q3 GM; still elevated accrual vs 2019 n/aShrink improved in January counts; accrual ~100 bps higher than 2019; won’t change rate until sustained Improving, but cautious
Pricing strategy / $1–$5 focusEmphasized $1–$3 for holiday; SKU rationalization planned Simplifying pricing while maintaining extreme value Simplify to whole $1–$5 price points; selective price moves (some down, mostly up); ensure “packed value” above $5 Sharpening positioning
Product newness & chasing trendsBroader category improvement (beauty, Halloween, tech, games/toys); reset underway Strong momentum; results exceeded expectations Chased exclusive beauty; 6 “curtain up” floor sets; tech value examples; back-to-school focus Improving
Real estate growth150–180 store cadence; be selective; DC expansions completed; remodel conversions paused 32 net adds in Q2; 1,858 total stores FY25 ~150 new stores; long runway to 3,500 potential; leverage market dislocations Steady
Marketing/CMOCMO role not yet filled; focus on social/creators n/aHired CMO Jacob Hawkins; elevate awareness, omnichannel journey, creators/social Improving

Management Commentary

  • “We were pleased to end the year with fourth quarter sales and EPS above our outlook… showcasing more newness… improving our operational execution and in-store experience.” – Ken Bull, COO .
  • “We are executing our key strategies around product, value and store experience… simplified pricing… a promise… WOW prices.” – Winnie Park, CEO .
  • “Adjusted gross margin decreased ~60 bps to 40.5%… driven primarily by fixed cost deleverage… offset in part by lower shrink… Adjusted operating margin declined 170 bps to 18.2%.” – Kristy Chipman, CFO .
  • “We are assuming about a 100 basis point impact from tariffs for the full year… mitigation through price, vendor negotiations and diversification (India sourcing).” – Management .
  • “Average inventory per store decreased ~2%… shrink rates improved in almost every cohort of stores” – CFO .

Q&A Highlights

  • Tariffs: FY25 gross margin -~100 bps; ~2H double that impact; mitigation via vendor deals, selective pricing (mainly $1–$5), and sourcing diversification (India); elasticity modeled in guidance .
  • Pricing: Mix of up and down pricing below $5; above $5 must “pack value”; selective moves to preserve relative value .
  • Labor/shrink: Increased labor aids throughput and shrink; accrual still ~100 bps above 2019; further sustained improvement needed before reducing accrual .
  • Merchandising cadence: Opportunity acknowledged to chase more into holiday; product newness momentum expected into summer and back-to-school .
  • Remodels: Conversions largely paused; selective only; focus on 150 new stores in FY25 .

Estimates Context

  • Q4 2025: Revenue $1,390.9M vs $1,387.3M consensus*; Adjusted EPS $3.48 vs $3.37 consensus* – both a beat .
  • Q3 2025: Revenue $843.7M vs $801.0M consensus*; Adjusted EPS $0.42 vs $0.17 consensus* – significant beat .
  • Q2 2025: Revenue $830.1M vs $822.1M consensus*; EPS inline at $0.54 vs $0.54* .

Values with asterisks are retrieved from S&P Global.

PeriodRevenue Estimate ($M)*Revenue Actual ($M)EPS Estimate ($)*EPS Actual ($)
Q2 2025822.1*830.1 0.54*0.54
Q3 2025801.0*843.7 0.17*0.42
Q4 20251,387.3*1,390.9 3.37*3.48

Values with asterisks are retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Q4 beat and above-outlook execution are positives, but FY25 margin headwinds (tariffs, labor, normalized incentives) cap EPS; watch 2H tariff impact cadence and shrink trend for potential upside .
  • Medium-term: Reset around $1–$5 value and “newness” plus marketing relaunch aims to reaccelerate traffic and comps; clear merchandising/test-and-chase playbook can compound as assortments tighten and SKU productivity improves .
  • Gross margin sensitivity: Guidance embeds ~100 bps FY tariff drag (about double in 2H); faster vendor/sourcing mitigation and/or better elasticity could ease pressure .
  • Shrink inflection watch: Store labor and front-end engagement showed early shrink improvement; if sustained by August counts, accrual reductions could boost margins into late FY25/FY26 .
  • Real estate runway intact: ~150 FY25 openings, long-term path to ~3,500 stores; remodels paused to prioritize new unit economics and capital efficiency .
  • Estimate risk skew: Momentum in Q3/Q4 beats vs consensus* and improving execution support near-term revisions, but tariff uncertainty and comp trajectory (flat to +3% guide) argue for measured expectations .
  • Stock drivers: Evidence of sustained comp reacceleration (traffic + ticket), continued shrink improvement, and clarity on tariff mitigation pace are likely to move the stock around prints and monthly checks .

Values with asterisks are retrieved from S&P Global.