Five Below Sinks on Lower-Income Shopper Struggles: What To Know
Five Below stock is lower after the discount retailer said "underperformance in the lower-income demographic" is weighing on its financial results.


Five Below (FIVE) stock is down sharply in Thursday's session after the discount retailer disclosed lower-than-anticipated fiscal first-quarter results and slashed its full-year outlook.
In the 13 weeks ended May 4, Five Below's net sales increased 11.8% year-over-year to $811.9 million, driven by the opening of 61 new stores. However, same-store sales decreased 2.3%. FIVE also said its earnings per share (EPS) fell 10.4% to 60 cents from the year-ago period.
"While our first-quarter sales were disappointing, disciplined cost management enabled us to deliver adjusted EPS within our earnings outlook," Five Below CEO Joel Anderson said in a statement. However, the executive notes that "needs-based items" helped drive a revenue gain.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"[W]e achieved positive comparisons in our higher-income cohorts, suggesting some trade-down of these customers seeking value at our stores," Anderson said in the company's earnings call. "However, we saw underperformance in the lower-income demographic that more than offset these results."
The executive added that the quarter "solidified that consumers are feeling the impact of multiple years of inflation across many key categories such as food, fuel, and rent and are, therefore, far more deliberate with their discretionary dollars."
The results came up short of analysts' expectations. According to Barron's, Wall Street was anticipating net sales of $834.3 million and earnings of 63 cents per share.
For its fiscal second quarter, Five Below expects net sales in the range of $830 million to $850 million and earnings in the range of 57 cents to 69 cents per share.
According to Yahoo Finance, analysts are forecasting revenue of $882.8 million and earnings of 99 cents for the company's second quarter.
Given the lackluster start to the year and its outlook on the second quarter, Five Below lowered its full-year outlook. Here’s what the company now expects versus its previous expectations:
Metric | New Outlook | Previous Outlook |
---|---|---|
Revenue | $3.79 billion to $3.87 billion | $3.97 billion to $4.07 billion |
Same-store sales | (3%) to (5%) | Flat to 3% |
EPS | $5 to $5.40 | $5.71 to $6.22 |
For the full year, analysts are anticipating revenue of $4 billion and earnings of $6 per share.
"Five Below remains an extreme value, high growth retailer," Anderson said. "We are excited to open approximately 230 new stores by the end of this year and bring Five Below to more neighborhoods, offering trend-right, WOW items at amazing value."
Is Five Below stock a buy, sell or hold?
Most analysts remain upbeat toward the consumer discretionary stock, even though it's down more than 45% for the year to date. According to S&P Global Market Intelligence, analysts' consensus target price for FIVE is $167.39, representing implied upside of more than 40% to current levels. Meanwhile, the consensus recommendation is a Buy.
However, Oppenheimer analyst Brian Nagel has a Neutral (Hold) rating on FIVE. While Nagel is "upbeat" on the company's longer-term strategic positioning, "we are hard-pressed to envision a meaningful rebound in FIVE shares until much clearer signals of sustained sales expansion emerge," he says.
As such, Nagel believes "are best served remaining on the sidelines with FIVE shares, at least for now."
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Is ESPN’s New Streaming Service Worth It?
ESPN will release its standalone streaming service this fall for $29.99 per month for one year. Is it worth the cost? We'll break it down.
-
Why Shark Tank’s Barbara Corcoran Is Selling Her $12 Million NYC Dream Home
Real estate mogul Barbara Corcoran is trading her luxurious NYC penthouse for a more age-friendly space that will fit her future lifestyle — here’s what to consider when planning for the long term.
-
Stock Market Today: Nasdaq Outperforms as Big Tech Rallies
The Dow Jones Industrial Average closed lower for a second day as Amgen and Merck fell.
-
The Three Retirement Tax Issues I Nag My Clients About
A financial professional highlights areas of tax planning that retirees should have on their radar as they finalize their retirement plan.
-
Do You Need Disability Insurance? Three Things to Know
Disability insurance can help replace some of your income during unexpected life events. Here are the basics, courtesy of a financial professional.
-
Stock Market Today: UnitedHealth Drags on Dow After CEO Splits
UNH created headwinds for the price-weighted Dow on news that its embattled CEO, Andrew Witty, is stepping down.
-
April CPI Keeps Fed Rate Cuts on Hold for Now: What the Experts Say
The April CPI report is unlikely to change the Fed's wait-and-see approach to interest rates.
-
How to Turn Education Planning Into Retirement Planning
Nervous about investing in a 529 plan? If college doesn't pan out, the money can now be rolled over into a Roth IRA, which will grow tax-free until retirement.
-
We Took Them in After the Fire, and Now They Won't Leave
A well-meaning older couple responded to a young couple's plea for help. Now they're looking at having to evict tenants rather than simply asking houseguests to go. How could this happen?
-
How Financial Advisers Can Help Clients Navigate the SSFA
The Social Security Fairness Act's big changes and new opportunities could require adjustments in tax strategy for some Social Security recipients.