Five Below (FIVE) investor relations material

Executive summary

• Achieved $1.03 billion in Q2 net sales, up 23.7% year-over-year, with comparable sales rising 12.4% and transaction volume up 8.7%.

• Opened 32 net new stores in Q2, ending with 1,858 stores, an 11.5% increase from last year, with new locations performing at target productivity.

• Net income for Q2 was $42.8 million, up 29.6% year-over-year; adjusted net income was $44.8 million, with adjusted EPS of $0.81.

• Focused on operational simplification, improved inventory flow, and enhanced in-store experience, contributing to better in-stock positions and customer satisfaction.

• Strong product assortment, pricing simplification, and effective marketing drove both new and repeat customer growth.

Financial highlights

• Gross profit for Q2 increased 26% to $342.4 million, with gross margin up to 33.4% (+70 bps); adjusted operating income was $55.1 million, and adjusted operating margin rose to 5.4%.

• Q2 net income was $42.8 million, up from $33.0 million; adjusted net income was $44.8 million.

• Ended the quarter with $562.7 million in cash and no debt; inventory per store up 12% year-over-year.

• Year-to-date net sales were $1.99 billion, up 21.6%, and net income was $83.9 million, up 30.2%.

• Total shareholders’ equity at quarter-end was $1.91 billion, up from $1.61 billion a year ago.

Outlook and guidance

• Q3 net sales expected between $950 million and $970 million, with comparable sales growth of 5–7% and adjusted operating margin at 1%.

• Full-year net sales guidance raised to $4.44–$4.52 billion, with 150 net new stores, comparable sales growth of 5–7%, and operating margin at 7.9%.

• Full-year adjusted EPS expected between $4.76 and $5.16.

• Gross capital expenditures for the year expected to be $210 million, focused on new stores and infrastructure.

• Management believes cash and credit facility are sufficient to fund growth and capital needs.