Five Below (FIVE) investor relations material

Executive summary

• Q3 net sales rose 23.1% year-over-year to $1.04 billion, with comparable sales up 14.3% and growth driven by both transactions and ticket increases.

• Net income for Q3 was $36.5 million, up from $1.7 million last year; adjusted net income was $38 million, reflecting improved gross margin and sales growth.

• Store count grew 9% year-over-year to 1,907, with 49 net new openings in Q3 and 136 year-to-date, including record launches in new markets.

• Customer-centric strategy focused on Gen Alpha, Gen Z, and Millennials, with marketing spend shifting to social and digital channels to drive engagement.

• Broad-based growth across most merchandising departments and income cohorts, with strong performance in both new and retained customers.

Financial highlights

• Net sales increased 23.1% year-over-year to $1.04 billion in Q3, with comparable sales up 14.3%.

• Adjusted gross profit rose to $352 million, with gross margin up to 33.9%.

• Adjusted operating income grew to $45 million, with operating margin up to 4.3%.

• Adjusted net income was $38 million and adjusted EPS was $0.68, both up over 60% year-over-year.

• Ended Q3 with $536 million in cash and investments; inventory at $1.1 billion, up 25% per store.

Outlook and guidance

• Q4 net sales expected at $1.58–$1.61 billion, with comparable sales up 6–8%.

• Full-year net sales forecasted at $4.62–$4.65 billion, with comparable sales growth of 9.4–10.1%.

• Full-year adjusted diluted EPS expected between $5.71 and $5.89, up 15%.

• Capital expenditures projected at $200 million, supporting 150 net new store openings and infrastructure investments.

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