FIVE BELOW, INC (FIVE): Results of Operations and Financial Condition
FIVE BELOW, INC (FIVE) filed an SEC Form 8-K — Results of Operations and Financial Condition. NEWS RELEASE Five Below, Inc. Announces Second Quarter Fiscal 2026 Financial Results Q2 Net Sales Increase of 22.9% to $1.3 Billion; Comparable Sales Increase of 14.1% Q2 GAAP Diluted EPS of $3.99, Q2 Adjusted Diluted EPS of $1.68 Increases Full Year 2026 Sales and EPS Outlook PH
How this was made
The 30-second read
Why it matters
The earnings beat and guidance raise are likely to drive buying pressure, while the buyback adds a catalyst for price support.
Market read
Strong earnings and capital return signal bullish momentum for Five Below and may lift the broader discount‑retail sector.
What to watch
Potential tariff impacts and higher operating costs could compress margins despite top‑line growth.
Q2 Net Sales Increase of 22.9% to $1.3 Billion; Comparable Sales Increase of 14.1%; Q2 GAAP Diluted EPS of $3.99, Q2 Adjusted Diluted EPS of $1.68; Increases Full Year 2026 Sales and EPS Outlook
Second-quarter net sales increased 22.9%, comparable sales increased 14.1%, adjusted operating income increased to $113.2 million from $55.1 million, and the company raised full-year sales, comparable-sales, net-income and EPS outlooks. Reported GAAP profit also included IEEPA tariff refunds.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, thirteen weeks ended August 1, 2026GAAP | $ 1,261,493 (in thousands) | – | 22.9% |
| Comparable sales, thirteen weeks ended August 1, 2026other | 14.1% | – | – |
| Gross profit, thirteen weeks ended August 1, 2026non-GAAP | $ 612,423 (in thousands) | – | – |
| Adjusted gross profit, thirteen weeks ended August 1, 2026non-GAAP | $ 449,095 (in thousands) | – | – |
| Cost of goods sold, thirteen weeks ended August 1, 2026GAAP | $ 649,070 (in thousands) | – | – |
| Selling, general and administrative expenses, thirteen weeks ended August 1, 2026GAAP | $ 285,870 (in thousands) | – | – |
| Depreciation and amortization, thirteen weeks ended August 1, 2026GAAP | $ 51,203 (in thousands) | – | – |
| Operating income, thirteen weeks ended August 1, 2026GAAP | $ 275,350 (in thousands) | – | – |
| Adjusted operating income, thirteen weeks ended August 1, 2026non-GAAP | $ 113,180 (in thousands) | – | – |
| Interest income and other income, net, thirteen weeks ended August 1, 2026GAAP | $ 15,418 (in thousands) | – | – |
| Income before income taxes, thirteen weeks ended August 1, 2026GAAP | $ 290,768 (in thousands) | – | – |
| Income tax expense, thirteen weeks ended August 1, 2026GAAP | $ 69,373 (in thousands) | – | – |
| Effective tax rate, thirteen weeks ended August 1, 2026GAAP | 23.9% | – | – |
| Net income, thirteen weeks ended August 1, 2026GAAP | $ 221,395 (in thousands) | – | – |
| Adjusted net income, thirteen weeks ended August 1, 2026non-GAAP | $ 93,397 (in thousands) | – | – |
| Basic income per common share, thirteen weeks ended August 1, 2026GAAP | $ 4.02 | – | – |
| Diluted income per common share, thirteen weeks ended August 1, 2026GAAP | $ 3.99 | – | – |
| Adjusted diluted income per common share, thirteen weeks ended August 1, 2026non-GAAP | $ 1.68 | – | – |
| Diluted weighted average shares outstanding, thirteen weeks ended August 1, 2026GAAP | 55,474,573 | – | – |
| Net sales, twenty-six weeks ended August 1, 2026GAAP | $ 2,547,095 (in thousands) | – | 27.5% |
| Comparable sales, twenty-six weeks ended August 1, 2026other | 18.3% | – | – |
| Operating income, twenty-six weeks ended August 1, 2026GAAP | $ 429,593 (in thousands) | – | – |
| Adjusted operating income, twenty-six weeks ended August 1, 2026non-GAAP | $ 267,964 (in thousands) | – | – |
| Net income, twenty-six weeks ended August 1, 2026GAAP | $ 344,451 (in thousands) | – | – |
| Adjusted net income, twenty-six weeks ended August 1, 2026non-GAAP | $ 217,114 (in thousands) | – | – |
| Diluted income per common share, twenty-six weeks ended August 1, 2026GAAP | $ 6.20 | – | – |
| Adjusted diluted income per common share, twenty-six weeks ended August 1, 2026non-GAAP | $ 3.91 | – | – |
Third Quarter and Full Year Fiscal 2026 outlook
- RevenueThird quarter net sales: $1.21 billion to $1.23 billion; full year net sales: $5.63 billion to $5.71 billion
- NoteThird quarter net new stores: approximately 40
- NoteThird quarter comparable sales: +8% to +10%
- NoteThird quarter net income: $56 million to $63 million
- NoteThird quarter diluted income per common share: $1.01 to $1.13
- NoteThird quarter diluted weighted average shares outstanding: 55.4 million
- NoteFull year net new stores: approximately 150
- NoteFull year comparable sales: +10% to +12%
- NoteFull year net income: $672 million to $698 million
- NoteFull year adjusted net income: $546 million to $572 million
- NoteFull year diluted income per common share: $12.10 to $12.58
- NoteFull year adjusted diluted income per common share: $9.83 to $10.31
- NoteFull year diluted weighted average shares outstanding: 55.5 million
- NoteFull year gross capital expenditures: $250 million to $260 million
- NoteOutlook includes the expected impact of tariff rates currently in place and excludes the impact of future tariff refunds and share repurchases, if any.
Capital returns
- The Company repurchased approximately 311,000 shares in the second quarter of fiscal 2026 at a cost of approximately $60.0 million.
- Repurchase and retirement of common stock was $ 60,363 (in thousands) for the twenty-six weeks ended August 1, 2026.
- On August 29, 2026, the Board of Directors approved a new share repurchase program authorizing the repurchase of up to $600 million of the Company's common stock.
- The new share repurchase program replaces and supersedes the remaining capacity under the prior program authorized on November 27, 2023.
- The new repurchase program has no fixed expiration date.
What drove it
- Net sales increased by 22.9% and comparable sales increased by 14.1% in the second quarter.
- The company opened 52 net new stores in the second quarter and ended the quarter with 2,022 stores in 46 states. Store count increased 8.8% from the end of the second quarter of fiscal 2025.
- The company opened 101 net new stores in the year to date period, compared with 87 net new stores in the year to date period of fiscal 2025.
- Adjusted operating income was $ 113,180 (in thousands) in the second quarter, compared with $ 55,119 (in thousands) in the prior-year quarter.
- IEEPA tariff refunds were $(163,583) (in thousands) in the second-quarter gross-profit and operating-income reconciliations and $(129,075) (in thousands), net of tax, in the adjusted-net-income reconciliation.
Concerns
- Reported GAAP operating income and net income included IEEPA tariff refunds. The company stated that full-year adjusted net income and adjusted diluted income per common share exclude the impact of tariff refunds and related interest recorded through the year to date period ended August 1, 2026.
- Third-quarter outlook includes the expected impact of tariff rates currently in place, while excluding the impact of future tariff refunds and share repurchases, if any.
- Inventories were 941,162 (in thousands) as of August 1, 2026, compared with 846,609 (in thousands) as of January 31, 2026.
- The filing identifies risks related to tariffs, supply-chain disruption, freight costs, consumer preferences and economic conditions, inventory balance and shrinkage, store expansion, information technology systems and competition.
What to watch
- Third-quarter comparable-sales outlook of +8% to +10% versus second-quarter comparable-sales growth of 14.1%.
- Delivery of full-year net sales outlook of $5.63 billion to $5.71 billion and comparable-sales outlook of +10% to +12%.
- Delivery of approximately 40 net new stores in the third quarter and approximately 150 net new stores for fiscal 2026.
- The effect of tariff rates currently in place and any future tariff refunds, which are excluded from the outlook.
- Full-year gross capital expenditures of $250 million to $260 million and the development of inventories.
Balance sheet and cash flow
- Cash and cash equivalents were $ 561,083 (in thousands) as of August 1, 2026, compared with $ 723,699 (in thousands) as of January 31, 2026 and $ 562,746 (in thousands) as of August 2, 2025.
- Short-term investment securities were 626,821 (in thousands) as of August 1, 2026, compared with 208,508 (in thousands) as of January 31, 2026 and 107,418 (in thousands) as of August 2, 2025.
- Inventories were 941,162 (in thousands) as of August 1, 2026, compared with 846,609 (in thousands) as of January 31, 2026 and 799,602 (in thousands) as of August 2, 2025.
- Line of credit was $ — as of August 1, 2026, January 31, 2026 and August 2, 2025.
- Net cash provided by operating activities was $ 442,710 (in thousands) for the twenty-six weeks ended August 1, 2026, compared with $ 225,658 (in thousands) for the twenty-six weeks ended August 2, 2025.
- Capital expenditures were $ 110,417 (in thousands) for the twenty-six weeks ended August 1, 2026, compared with $ 80,928 (in thousands) for the twenty-six weeks ended August 2, 2025.
- Net cash used in investing activities was $ 528,729 (in thousands) for the twenty-six weeks ended August 1, 2026, compared with net cash provided by investing activities of $ 8,727 (in thousands) for the twenty-six weeks ended August 2, 2025.
- Net cash used in financing activities was $ 76,597 (in thousands) for the twenty-six weeks ended August 1, 2026, compared with $ 3,357 (in thousands) for the twenty-six weeks ended August 2, 2025.
- Net decrease in cash and cash equivalents was $ 162,616 (in thousands) for the twenty-six weeks ended August 1, 2026, compared with net increase in cash and cash equivalents of $ 231,028 (in thousands) for the twenty-six weeks ended August 2, 2025.
Analysis
Five Below reported a strong second quarter, with net sales of $ 1,261,493 (in thousands), up 22.9% from $ 1,026,847 (in thousands), and comparable sales growth of 14.1%. Store growth complemented the comparable-sales performance: the company opened 52 net new stores, ended with 2,022 stores in 46 states, and reported an 8.8% increase in store count from the end of the second quarter of fiscal 2025. For the twenty-six weeks ended August 1, 2026, net sales were $ 2,547,095 (in thousands), up 27.5%, while comparable sales increased 18.3%.
Profitability increased substantially, but the reported GAAP figures were affected by IEEPA tariff refunds. Second-quarter GAAP operating income was $ 275,350 (in thousands), compared with $ 52,365 (in thousands), while adjusted operating income was $ 113,180 (in thousands), compared with $ 55,119 (in thousands). The reconciliation identifies $(163,583) (in thousands) of IEEPA tariff refunds in both gross profit and operating income. GAAP net income was $ 221,395 (in thousands) and diluted income per common share was $ 3.99; adjusted net income was $ 93,397 (in thousands) and adjusted diluted income per common share was $ 1.68.
First-half operating cash flow was $ 442,710 (in thousands), compared with $ 225,658 (in thousands) in the prior-year period. The company spent $ 110,417 (in thousands) on capital expenditures and $ 60,363 (in thousands) on repurchase and retirement of common stock during the twenty-six weeks. Cash and cash equivalents were $ 561,083 (in thousands) at August 1, 2026, short-term investment securities were 626,821 (in thousands), and the line of credit was $ —. Inventory was 941,162 (in thousands), compared with 846,609 (in thousands) at January 31, 2026.
Management raised its full-year fiscal 2026 outlook. Full-year net sales are now expected at $5.63 billion to $5.71 billion, compared with the stated prior outlook of $5.40 billion to $5.48 billion, and comparable sales are expected at +10% to +12%, compared with +6% to +8%. Full-year GAAP diluted income per common share is expected at $12.10 to $12.58 and adjusted diluted income per common share at $9.83 to $10.31. The company expects third-quarter net sales of $1.21 billion to $1.23 billion, comparable-sales growth of +8% to +10%, and approximately 40 net new stores.
The central figures to monitor are the planned moderation in third-quarter comparable-sales growth relative to the 14.1% second-quarter increase, execution against approximately 150 full-year net new stores, inventory development, and tariff effects. The company states that its outlook incorporates tariff rates currently in place but excludes the effect of future tariff refunds and share repurchases, if any. The difference between GAAP and adjusted results is particularly important because tariff refunds and related interest materially affected reported profit in the first half.
Management, verbatim
We are thrilled with our second quarter performance and the continued momentum of our customer-centric strategy. Our Crew delivered strong results by collaborating on trend-right product stories at amazing value in stores that are fun and easy to shop. We remain maniacally focused on delivering our brand promise to be THE destination for the KID and the KID in all of us.
Winnie Park, CEO of Five Below
Just as importantly, our Crew continues to drive new store growth at a higher level of executional excellence to bring Five Below to new communities. The balance between new store growth and double-digit comparable sales growth for the past five quarters is a testament to our operating flywheel gaining momentum. With a strong first half behind us and significant opportunities ahead, we are raising our full year outlook and look forward to delivering special curtain up moments for our customers through the holiday season and beyond.
Winnie Park, CEO of Five Below
Not in the filing
stated, not guessed- Segment revenue, segment comparable-sales metrics and segment profit metrics were not reported because the filing did not present operating segments.
- Gross margin and adjusted gross margin were not reported.
- Quarterly operating cash flow, quarterly capital expenditures and quarterly free cash flow were not reported.
- Free cash flow was not reported.
- Dividends were not reported.
- Third-quarter gross-margin, operating-expense and tax-rate guidance were not reported.
- Full-year gross-margin, operating-expense and tax-rate guidance were not reported.
- A separately provided previous-release outlook was not provided; therefore, no actual-versus-prior-guidance comparison is presented.
- Prior-quarter comparisons for reported second-quarter income-statement metrics were not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Five Below (NASDAQ:FIVE) filed an 8‑K announcing Q2 FY2026 results, raising its full‑year sales and EPS outlook and launching a $600 M share‑repurchase program.
Ticker impact
SEC Form 8‑K reports Q2 FY2026 results, strong sales growth, raised full‑year outlook and a $600 M share‑repurchase authorization.
Potential short‑term price rally, target upside of 5‑8% over the next weeks.
Revenue +22.9% YoY, EPS up from $0.77 to $3.99, and a sizable repurchase program indicate strong momentum and capital return to shareholders.
Market effects
Retail discount sector may see broader optimism as Five Below demonstrates robust same‑store growth and expansion capability.
U.S. consumer discretionary stocks could benefit from the upbeat outlook, especially other value‑oriented retailers.
Limited to U.S. markets; however, international discount chains may be watched for comparable performance.
Counterpoint
If the sales growth slows in Q3 or the new stores underperform, the recent rally could be overstated.
Key entities
- CEOWinnie Park
Chief Executive Officer of Five Below, quoted on performance and outlook.
- Corporate GovernanceBoard of Directors
Approved the new $600 M share‑repurchase authorization.
