Five Below (FIVE) investor relations material

Executive summary

• Net sales for Q3 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 increased to $36.5 million from $1.7 million last year, with adjusted diluted EPS up 62% to $0.68.

• Opened 49 net new stores in Q3, ending with over 1,900 locations, and saw record grand openings in new markets.

• Customer-centric strategy focused on Gen Alpha, Gen Z, and Millennials, with marketing spend shifted to social and digital channels, driving increased traffic and engagement.

• Gross margin expanded to 33.8% from 30.6% year-over-year, aided by lower merchandise costs and reduced inventory shrinkage.

Financial highlights

• Q3 net sales increased 23.1% to $1.04 billion, with comparable sales up 14.3%.

• Q3 adjusted gross profit was $351.8 million, with gross margin up to 33.9%.

• Q3 adjusted operating income rose 63% to $45 million, with operating margin up 110 basis points to 4.3%.

• Q3 adjusted net income was $38 million and adjusted EPS was $0.68, both up 62% year-over-year.

• Ended the quarter with $536 million in cash and investments; inventory per store up nearly 25% year-over-year.

Outlook and guidance

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

• Q4 adjusted operating margin expected at 15.8%; adjusted net income of $192 million and EPS of $3.45.

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

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

• Capital expenditures projected at $200 million for 150 net new stores and infrastructure investments.