Five Below Inc. Reports Mixed Financial Results for Fiscal 2024

For the fourth quarter of fiscal 2024, Five Below reported net sales of $1.39 billion, a 4.0% increase from $1.34 billion in the same period of fiscal 2023. When excluding the impact of the 53rd week from the prior year, the increase in sales would have been approximately 7.8%. However, comparable sales saw a decline of 3.0%, reflecting some headwinds in consumer spending.

The company successfully opened 22 net new stores, bringing its total store count to 1,771 across 44 states, representing a 14.7% growth in store count year over year.

Operating income for the quarter was reported at $246.8 million, down from $268.4 million in the prior year. Adjusted operating income, which takes into account the 53rd week in fiscal 2023, saw a decrease of 1.5%, coming in at $253.3 million.

The effective tax rate for the quarter was 25.2%, slightly lower than the 25.8% reported in the prior year. Net income decreased to $187.5 million from $202.2 million, while adjusted net income was $192.4 million, a 0.7% decrease when adjusted for the prior year’s 53rd week.

Earnings per share (EPS) also reflected this trend, with diluted EPS at $3.39, compared to $3.65 in the previous year. Adjusted diluted EPS was $3.48, down 0.6% year over year.

For the full year ending February 1, 2025, Five Below reported net sales of $3.88 billion, marking an 8.9% increase from $3.56 billion in fiscal 2023, or a 10.4% increase when excluding the 53rd week. Comparable sales for the year fell by 2.7%.

The company opened 227 new stores throughout the year, up from 204 in fiscal 2023. Operating income for the fiscal year decreased to $323.8 million from $385.6 million in the previous year, with adjusted operating income at $356.1 million, a 4.8% decrease year over year when accounting for the additional week.

Net income for fiscal 2024 was $253.6 million, down from $301.1 million, with adjusted net income at $277.8 million, reflecting a 5.1% decrease when adjusted for the comparative week. Diluted EPS for the year was reported at $4.60, down from $5.41 in fiscal 2023, with an adjusted diluted EPS of $5.04, a decrease of 4.2%.

The company also executed a share repurchase program, buying back approximately 267,000 shares at a cost of $40 million during the fiscal year.

Ken Bull, COO of Five Below, expressed optimism about the fourth quarter results, stating, "We were pleased to end the year with fourth quarter sales and EPS above our outlook." He highlighted the company’s efforts to enhance in-store experiences and operational execution as key factors driving early positive results.

Winnie Park, CEO, noted the busy quarter as the team focused on product, value, and store experience. "We have a unique opportunity to deliver amazing value across a curated assortment featuring consistent newness with simplified pricing," Park said. She reaffirmed the company's commitment to affordability and value, emphasizing that Five Below is a destination for customers seeking joy and excitement at "WOW prices."

For the first quarter of fiscal 2025, Five Below anticipates net sales between $905 million and $925 million, projecting a flat to 2% increase in comparable sales. The company expects net income to range from $25 million to $31 million, with an adjusted net income forecast of $28 million to $34 million.

For the full year of fiscal 2025, Five Below anticipates net sales between $4.21 billion and $4.33 billion, assuming a flat to 3% increase in comparable sales, with a projected net income range of $216 million to $250 million.

While Five Below's fourth quarter and fiscal year results indicate a mixed performance with some positive growth in sales and store openings, the decline in comparable sales and profitability metrics presents challenges. The management's focus on enhancing customer experience and maintaining affordability will be crucial as the company navigates the upcoming fiscal year amidst a dynamic retail landscape.