Five Below to open 150 stores, names marketing chief; focusing on core price points
Five Below reported fourth-quarter earnings that topped Street estimates, offered a mixed outlook going forward and said it is returning its focus to its $5-and-under price points.
On the company’s earnings call, new CEO Winnie Park said Five Below is returning to its core focus at whole $1 to $5 price points and “raising the bar on adding value to our highly edited assortment of product above $5.”
"Ultimately, this will serve to simplify the shopping experience for our customers and streamline our operations,” said Park, who took the helm of Five Below in December after serving as CEO of Forever 21 since January 2022. “Our priority is to keep prices low and our offering accessible to ensure we maintain the trust and loyalty of our customers and attract new customers to the brand.”
The move comes as the value-oriented chain, which targets tweens and teens, has been adding in-store shops featuring higher-priced items to its locations.
In other news, Five Below hired a new chief marketing officer, Jacob Hawkins. He previously worked with Park at Forever 21, where he served as chief marketing, digital and omni officer since 2022. Prior to that, Hawkins spent some four years at Belk, including as chief marketing and digital officer.
Five Below is continuing its expansion, with plans to open 150 new stores this year. The company opened a record 228 stores across 39 states in 2024, including entry into its 44th state, Wyoming. It ended the year with 1,771 stores across the U.S. Executives told analysts on the earnings call that the company still sees the opportunity for a total of 3,500 stores.
Fourth Quarter
Five Below’s net income totaled $187.5 million for the quarter ended Feb. 1, compared to $202.2 million in the year-ago period. Adjusted earnings came to $3.48 per share, topping analysts’ estimates of $3.38 per share.
Net sales rose 4.0% to $1.39 billion from $1.34 billion (with an increase of 7.8% when excluding the impact of the 53rd week in fiscal 2023, the company said), just ahead of estimates. Comparable sales decreased by 3.0%, which was better than the expected 3.3% decline.
"We have a unique opportunity to deliver amazing value across a curated assortment featuring consistent newness with simplified pricing," Park said in the earnings release. "Our focus on affordability and value is not just a strategy; it’s a promise to our customers that Five Below is a place where they can find joy and excitement at wow prices. This is the true magic of Five Below.”
For its current quarter, Five Below expects revenue of $905 million to $925 million, and earnings per share in the range of of $0.50 and $0.61, above Street estimates of $897.8 million and $0.48, respectively.
For the full fiscal year, the company expects adjusted earnings per share of $4.10 to $4.72, below estimates for $5.04
Five Below ended the quarter with 1,771 stores in 44 states.
