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Bull of the Day: Five Below (FIVE)

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Key Takeaways

  • Five Below raised guidance in its latest report, reflecting back-to-back guidance upgrades.
  • The company is rapidly opening new stores while also seeing strong growth in existing locations.
  • FIVE has reported at least 20% YoY sales growth in five consecutive periods.

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 Raises Guidance Again

Five Below posted a double-beat versus our consensus expectations in its latest quarterly release, with revenues up nearly 23% and earnings up nearly 110%. The company has been a stellar earnings performer as of late, exceeding the Zacks Consensus EPS estimate by an average of 68% across its last four releases.

Comparable store sales increased by an impressive 14% YoY, with FIVE also expanding its footprint by opening 52 new stores throughout the period. The company raised its FY26 sales and EPS outlook as well, reflecting back-to-back guidance upgrades in its last two releases.

Zacks Investment Research
Image Source: Zacks Investment Research

The growth picture for the retailer remains highly favorable, with earnings forecasted to grow nearly 60% in its current fiscal year on 20% higher sales. The stock currently sports a Style Score of ‘B’ for Growth.

Zacks Investment Research
Image Source: Zacks Investment Research

It’s worth noting that FIVE is no stranger to holding a favorable Zacks Rank, as it’s been either a #2 (Buy) or #1 (Strong Buy) for nearly a year now, dating back to last October, with shares up 36% over the timeframe and more than doubling the S&P 500’s 17% return over the same period.

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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