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Five Below's Store Expansion Strategy Accelerates Revenue Growth
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Key Takeaways
Five Below added 150 net new stores in fiscal 2025, expanding its footprint to 46 states.
FIVE posted 15.4% fourth-quarter comparable sales growth across all districts and income cohorts.
Five Below plans another 150 net new stores in fiscal 2026 to support continued growth.
Five Below, Inc. (FIVE - Free Report) continued to strengthen its long-term growth profile in fiscal 2025 through an aggressive yet disciplined store expansion strategy that significantly contributed to revenue growth. The company increased sales 23% to more than $4.7 billion while expanding its store base by 8.5%, highlighting the strong connection between new store productivity and overall business momentum.
In fiscal 2025, Five Below opened 150 net new stores and ended the year with 1,921 locations across 46 states, including entry into Oregon and Washington. In the fiscal fourth quarter alone, the company added 14 net new stores across eight states. Management highlighted that eight grand openings in the Pacific Northwest delivered record-breaking performances, reinforcing confidence in the company’s ability to successfully penetrate new markets.
Store growth worked alongside strong comparable sales momentum to fuel revenue acceleration. Comparable sales increased 12.8% in fiscal 2025, while fourth-quarter comparable sales surged 15.4%, supported by growth across all 170 districts, all store vintages and all income cohorts. Strong merchandising execution, improved in-stock levels and enhanced marketing efforts helped drive customer traffic and higher ticket sizes across the chain.
Five Below is also investing heavily to support expansion. Capital expenditure totaled approximately $175 million in fiscal 2025, funding new stores, technology upgrades and infrastructure improvements. Five Below plans to maintain aggressive expansion in fiscal 2026, with approximately 150 additional net new stores and the capital expenditure projected between $230 million and $250 million.
Management remains highly optimistic about the company’s long-term white-space opportunity. FIVE highlighted accelerating new store productivity, durable comparable sales growth and strong performance in newly entered markets as evidence that the expansion strategy can continue driving revenue growth for years ahead. The company expects fiscal 2026 sales to rise to $5.2-$5.3 billion, indicating 10% growth at the mid-point.
BBWI & BBW’s Store Expansion Strategy vs. FIVE
Bath & Body Works, Inc. (BBWI - Free Report) is guiding for 1% square footage growth in 2026, reflecting a disciplined and productivity-focused store expansion strategy. In 2025, Bath & Body Works opened 32 net new stores in North America, while international partners added 44 net new stores, taking the international store base to 573 locations.
Management expects international partners to accelerate expansion with at least 60 net new store openings. In contrast, store optimization initiatives, such as a 10% SKU reduction and improved in-store navigation, are expected to support Bath & Body Works’ stronger traffic and productivity, with benefits building in the back half of 2026 and into 2027.
Build-A-Bear Workshop, Inc. (BBW - Free Report) is accelerating its global expansion through a mix of corporate, partner-operated and franchise stores, with plans to open at least 50 net new locations in 2026, mostly via its asset-light international partner-operated model.
Build-A-Bear has already expanded to 36 countries, underscoring its strong global growth runway. At the same time, Build-A-Bear is enhancing its store strategy with next-generation experiential formats, including the upcoming multi-level ICON Park store in Orlando focused on customization and immersive guest experiences, which should support stronger traffic and long-term productivity.
FIVE’s Price Performance, Valuation & Estimates
Five Below has seen its shares skyrocket 96.2% in the past year against the industry’s decline of 1.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, Five Below is trading at a forward 12-month price-to-sales ratio of 2.17X, up from the industry average of 1.51X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Five Below’s fiscal 2026 earnings implies year-over-year growth of 19.2%, whereas the same for fiscal 2027 indicates an uptick of 14.3%. Estimates for fiscal 2026 and 2027 have been revised upward by 95 cents and $1.60, respectively, in the past 60 days.
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Image: Bigstock
Five Below's Store Expansion Strategy Accelerates Revenue Growth
Key Takeaways
Five Below, Inc. (FIVE - Free Report) continued to strengthen its long-term growth profile in fiscal 2025 through an aggressive yet disciplined store expansion strategy that significantly contributed to revenue growth. The company increased sales 23% to more than $4.7 billion while expanding its store base by 8.5%, highlighting the strong connection between new store productivity and overall business momentum.
In fiscal 2025, Five Below opened 150 net new stores and ended the year with 1,921 locations across 46 states, including entry into Oregon and Washington. In the fiscal fourth quarter alone, the company added 14 net new stores across eight states. Management highlighted that eight grand openings in the Pacific Northwest delivered record-breaking performances, reinforcing confidence in the company’s ability to successfully penetrate new markets.
Store growth worked alongside strong comparable sales momentum to fuel revenue acceleration. Comparable sales increased 12.8% in fiscal 2025, while fourth-quarter comparable sales surged 15.4%, supported by growth across all 170 districts, all store vintages and all income cohorts. Strong merchandising execution, improved in-stock levels and enhanced marketing efforts helped drive customer traffic and higher ticket sizes across the chain.
Five Below is also investing heavily to support expansion. Capital expenditure totaled approximately $175 million in fiscal 2025, funding new stores, technology upgrades and infrastructure improvements. Five Below plans to maintain aggressive expansion in fiscal 2026, with approximately 150 additional net new stores and the capital expenditure projected between $230 million and $250 million.
Management remains highly optimistic about the company’s long-term white-space opportunity. FIVE highlighted accelerating new store productivity, durable comparable sales growth and strong performance in newly entered markets as evidence that the expansion strategy can continue driving revenue growth for years ahead. The company expects fiscal 2026 sales to rise to $5.2-$5.3 billion, indicating 10% growth at the mid-point.
BBWI & BBW’s Store Expansion Strategy vs. FIVE
Bath & Body Works, Inc. (BBWI - Free Report) is guiding for 1% square footage growth in 2026, reflecting a disciplined and productivity-focused store expansion strategy. In 2025, Bath & Body Works opened 32 net new stores in North America, while international partners added 44 net new stores, taking the international store base to 573 locations.
Management expects international partners to accelerate expansion with at least 60 net new store openings. In contrast, store optimization initiatives, such as a 10% SKU reduction and improved in-store navigation, are expected to support Bath & Body Works’ stronger traffic and productivity, with benefits building in the back half of 2026 and into 2027.
Build-A-Bear Workshop, Inc. (BBW - Free Report) is accelerating its global expansion through a mix of corporate, partner-operated and franchise stores, with plans to open at least 50 net new locations in 2026, mostly via its asset-light international partner-operated model.
Build-A-Bear has already expanded to 36 countries, underscoring its strong global growth runway. At the same time, Build-A-Bear is enhancing its store strategy with next-generation experiential formats, including the upcoming multi-level ICON Park store in Orlando focused on customization and immersive guest experiences, which should support stronger traffic and long-term productivity.
FIVE’s Price Performance, Valuation & Estimates
Five Below has seen its shares skyrocket 96.2% in the past year against the industry’s decline of 1.7%.
Image Source: Zacks Investment Research
From a valuation standpoint, Five Below is trading at a forward 12-month price-to-sales ratio of 2.17X, up from the industry average of 1.51X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Five Below’s fiscal 2026 earnings implies year-over-year growth of 19.2%, whereas the same for fiscal 2027 indicates an uptick of 14.3%. Estimates for fiscal 2026 and 2027 have been revised upward by 95 cents and $1.60, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Five Below currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.