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Bull of the Day: Five Below (FIVE)

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Key Takeaways

  • FIVE has enjoyed strong sales and earnings growth, with shares benefiting as a result.
  • Estimates for its upcoming release maintain the bright growth outlook.

Five Below (FIVE - Free Report) is a specialty value chain retailer that offers a wide range of premium-quality, trendy merchandise typically priced at $5 or less. The company primarily targets teenage and pre-teen shoppers with its products, which include certain brands and licensed merchandise.

The stock sports the highly coveted Zacks Rank #1 (Strong Buy), with bullish EPS revisions present across the board.

Zacks Investment Research
Image Source: Zacks Investment Research

Five Below Reports Outsized Sales Growth

Five Below posted a double-beat relative to our consensus expectations in the latest quarterly release, with revenues increasing nearly 32% alongside a 160% jump in adjusted EPS. The YoY sales growth rate was the highest we’ve seen from the company in years, with it also raising its FY26 EPS and sales guidance following the release. 

Comparable store sales increased by an impressive 22.7% YoY, with FIVE also expanding its footprint by opening 49 new stores throughout the above-mentioned quarter. Please note that the chart below tracks the YoY% change in sales, not actual sales figures.

Zacks Investment Research
Image Source: Zacks Investment Research

The growth picture remains solid, with earnings forecasted to grow 36% in its current fiscal year on 15% higher sales. Keep an eye out for the company’s next quarterly release expected in late August, with current consensus expectations suggesting a 58% climb in earnings on 18% higher sales.

Both EPS and sales expectations have been trending nicely higher over recent months, with upward revisions for both even coming in at the end of July.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Five Below (FIVE - Free Report) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy). 

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