Q1 Net Sales Increase of 32.5% to
Q1 GAAP Diluted EPS of
Increases Full Year 2026 Sales and EPS Outlook
For the first quarter ended
- Net sales increased by 32.5% to
$1,285.6 million from$970.5 million in the first quarter of fiscal 2025; comparable sales increased by 22.7%. - The Company opened 49 net new stores and ended the quarter with 1,970 stores in 46 states. This represents an increase in stores of 7.9% from the end of the first quarter of fiscal 2025.
- Operating income was
$154.2 million compared to$50.8 million in the first quarter of fiscal 2025. Adjusted operating income(1) was$154.8 million compared to$59.6 million in the first quarter of fiscal 2025. - The effective tax rate was 24.3% compared to 27.2% in the first quarter of fiscal 2025.
- Net income was
$123.1 million compared to$41.1 million in the first quarter of fiscal 2025. Adjusted net income(1) was$123.5 million compared to$47.5 million in the first quarter of fiscal 2025. - Diluted income per common share was
$2.21 compared to$0.75 in the first quarter of fiscal 2025. Adjusted diluted income per common share(1) was$2.22 compared to$0.86 in the first quarter of fiscal 2025.
(1) A reconciliation of adjusted operating income, adjusted net income, and adjusted diluted income per common share to the most directly comparable financial measure presented in accordance with generally accepted accounting principles in
Second Quarter and Fiscal 2026 Outlook:
The Company expects the following results for the second quarter and full year of fiscal 2026. This outlook includes the expected impact of tariff rates currently in place through
For the second quarter of Fiscal 2026:
- Net sales are expected to be in the range of
$1.18 billion to$1.20 billion based on opening approximately 50 new stores and assumes an approximate 7% to 9% increase in comparable sales. - Net income is expected to be in the range of
$64 million to$71 million . Adjusted net income(2) is expected to be in the range of$65 million to$72 million . - Diluted income per common share is expected to be in the range of
$1.15 to$1.27 on approximately 55.7 million diluted weighted average shares outstanding. Adjusted diluted income per common share(2) is expected to be in the range of$1.17 to$1.29 .
(2) Adjusted net income and adjusted diluted income per common share exclude the impact of retention awards granted in fiscal 2024, net of income tax impact.
For the full year of Fiscal 2026:
- Net sales are expected to be in the range of
$5.40 billion to$5.48 billion based on opening approximately 150 net new stores and assumes an approximate 6% to 8% increase in comparable sales. - Net income is expected to be in the range of
$480 million to$502 million . Adjusted net income(3) is expected to be in the range of$482 million to$504 million . - Diluted income per common share is expected to be in the range of
$8.62 to$9.02 on approximately 55.7 million diluted weighted average shares outstanding. Adjusted diluted income per common share(3) is expected to be in the range of$8.65 to$9.05 . - Gross capital expenditures are expected to be in the range of
$230 million to$250 million .
(3) Adjusted net income and adjusted diluted income per common share exclude the impact of retention awards granted in fiscal 2024, net of income tax impact.
Conference Call Information:
A conference call to discuss the financial results for the first quarter of fiscal 2026 is scheduled for today,
Non-GAAP Information:
This press release includes the following non-GAAP financial measures: gross profit, adjusted gross profit, adjusted operating income, adjusted net income, and adjusted diluted income per common share. The Company has reconciled these non-GAAP financial measures, with respect to the first quarter ended
Forward-Looking Statements:
This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be protected by the “safe harbor” provisions therein. Such statements reflect management’s current views and estimates regarding the Company’s industry, business strategy, goals, expectations and outlook concerning its market position, operations, margins, profitability, capital expenditures, liquidity and capital resources, store count potential and other financial and operating information. Investors can identify these statements by the fact that they use words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future” and similar terms and phrases. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Although we believe there is a reasonable basis for such forward-looking statements, our actual results may differ materially from these expectations due to risks that include, but are not limited to, risks related to disruption to the global supply chain, increased cost of freight, constraints on shipping capacity to transport inventory or the timely receipt of inventory, risks related to the Company’s strategy and expansion plans, risks related to our ability to attract, retain, and motivate qualified executive talent, risks related to disruptions in our information technology systems and our ability to maintain and upgrade those systems, risks related to our ability to successfully implement our online retail operations, risks related to cyberattacks or other cyber incidents, such as the failure to secure customers’ confidential or credit card information, or other private data relating to our crew or the Company, including the costs associated with protection against or remediation of such incidents, risks related to increased usage of machine learning and other types of artificial intelligence in our business, and challenges with properly managing its use, risks related to our ability to select, obtain, distribute and market merchandise profitably, risks related to our reliance on merchandise manufactured outside of
About Five Below:
Five Below is a leading growth retailer offering trend-right, extreme value, high-quality products loved by the kid and the kid in all of us. We believe life is better when customers are free to "let go & have fun" in an amazing experience filled with unlimited possibilities. With most items priced between
Investor Contact:
Vice President, Investor Relations
InvestorRelations@fivebelow.com
Consolidated Balance Sheets (Unaudited) (in thousands) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 638,892 | $ | 723,699 | $ | 427,462 | ||
| Short-term investment securities | 474,370 | 208,508 | 196,529 | |||||
| Inventories | 813,300 | 846,609 | 702,053 | |||||
| Prepaid income taxes and tax receivable | 5,210 | 5,210 | 4,649 | |||||
| Prepaid expenses and other current assets | 130,176 | 132,697 | 142,429 | |||||
| Total current assets | 2,061,948 | 1,916,723 | 1,473,122 | |||||
| Property and equipment, net | 1,242,449 | 1,234,331 | 1,260,795 | |||||
| Operating lease assets | 1,725,210 | 1,765,704 | 1,696,917 | |||||
| Other assets | 25,396 | 20,261 | 21,968 | |||||
| $ | 5,055,003 | $ | 4,937,019 | $ | 4,452,802 | |||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Line of credit | $ | — | $ | — | $ | — | ||
| Accounts payable | 351,544 | 368,381 | 276,505 | |||||
| Income taxes payable | 95,234 | 56,644 | 72,365 | |||||
| Accrued salaries and wages | 46,704 | 67,505 | 31,179 | |||||
| Other accrued expenses | 188,684 | 160,328 | 176,750 | |||||
| Operating lease liabilities | 300,545 | 301,148 | 304,950 | |||||
| Total current liabilities | 982,711 | 954,006 | 861,749 | |||||
| Other long-term liabilities | 10,890 | 8,667 | 8,049 | |||||
| Long-term operating lease liabilities | 1,698,164 | 1,731,041 | 1,670,168 | |||||
| Deferred income taxes | 50,767 | 50,015 | 54,774 | |||||
| Total liabilities | 2,742,532 | 2,743,729 | 2,594,740 | |||||
| Shareholders’ equity: | ||||||||
| Common stock | 552 | 551 | 549 | |||||
| Additional paid-in capital | 174,915 | 178,791 | 161,058 | |||||
| Retained earnings | 2,137,004 | 2,013,948 | 1,696,455 | |||||
| Total shareholders’ equity | 2,312,471 | 2,193,290 | 1,858,062 | |||||
| $ | 5,055,003 | $ | 4,937,019 | $ | 4,452,802 | |||
Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) | |||||
| Thirteen Weeks Ended | |||||
| Net sales | $ | 1,285,602 | $ | 970,527 | |
| Cost of goods sold (exclusive of items shown separately below) | 806,960 | 646,614 | |||
| Selling, general and administrative expenses | 273,276 | 226,502 | |||
| Depreciation and amortization | 51,123 | 46,564 | |||
| Operating income | 154,243 | 50,847 | |||
| Interest income and other income, net | 8,255 | 5,647 | |||
| Income before income taxes | 162,498 | 56,494 | |||
| Income tax expense | 39,442 | 15,346 | |||
| Net income | $ | 123,056 | $ | 41,148 | |
| Basic income per common share | $ | 2.23 | $ | 0.75 | |
| Diluted income per common share | $ | 2.21 | $ | 0.75 | |
| Weighted average shares outstanding: | |||||
| Basic shares | 55,262,924 | 55,045,966 | |||
| Diluted shares | 55,607,222 | 55,189,813 | |||
Consolidated Statements of Cash Flows (Unaudited) (in thousands) | |||||||
| Thirteen Weeks Ended | |||||||
| Operating activities: | |||||||
| Net income | $ | 123,056 | $ | 41,148 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 51,123 | 46,564 | |||||
| Share-based compensation expense | 5,132 | 9,859 | |||||
| Deferred income tax expense (benefit) | 752 | (5,117 | ) | ||||
| Other non-cash expenses | 1,588 | 94 | |||||
| Changes in operating assets and liabilities: | |||||||
| Inventories | 33,309 | (42,553 | ) | ||||
| Prepaid expenses and other assets | (2,650 | ) | 13,931 | ||||
| Accounts payable | (20,238 | ) | 14,733 | ||||
| Income taxes payable | 38,590 | 20,367 | |||||
| Accrued salaries and wages | (20,801 | ) | 11,436 | ||||
| Operating leases | 7,014 | 3,176 | |||||
| Other accrued expenses | 10,349 | 19,024 | |||||
| Net cash provided by operating activities | 227,224 | 132,662 | |||||
| Investing activities: | |||||||
| Purchases of investment securities and other investments | (271,833 | ) | (82,393 | ) | |||
| Sales, maturities, and redemptions of investment securities | 5,971 | 82,938 | |||||
| Capital expenditures | (37,189 | ) | (36,209 | ) | |||
| Net cash used in investing activities | (303,051 | ) | (35,664 | ) | |||
| Financing activities: | |||||||
| Proceeds from exercise of options to purchase common stock and vesting of restricted and performance-based restricted stock units | 1 | — | |||||
| Common shares withheld for taxes | (8,981 | ) | (1,254 | ) | |||
| Net cash used in financing activities | (8,980 | ) | (1,254 | ) | |||
| Net (decrease) increase in cash and cash equivalents | (84,807 | ) | 95,744 | ||||
| Cash and cash equivalents at beginning of period | 723,699 | 331,718 | |||||
| Cash and cash equivalents at end of period | $ | 638,892 | $ | 427,462 | |||
GAAP to Non-GAAP Reconciliation of Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share data) |
Reconciliation of gross profit to adjusted gross profit
| Thirteen Weeks Ended | |||||
| Gross profit(4) | $ | 478,642 | $ | 323,913 | |
| Adjustments: | |||||
| Retention awards(5) | — | 390 | |||
| Cost-optimization initiatives(6) | — | 4,100 | |||
| Adjusted gross profit(7) | $ | 478,642 | $ | 328,403 | |
Reconciliation of operating income, as reported, to adjusted operating income
| Thirteen Weeks Ended | |||||
| Operating income, as reported | $ | 154,243 | $ | 50,847 | |
| Adjustments: | |||||
| Retention awards(5) | 541 | 2,937 | |||
| Cost-optimization initiatives(6) | — | 4,960 | |||
| Non-recurring inventory write-off | — | 830 | |||
| Adjusted operating income(7) | $ | 154,784 | $ | 59,574 | |
Reconciliation of net income, as reported, to adjusted net income
| Thirteen Weeks Ended | |||||
| Net income, as reported | $ | 123,056 | $ | 41,148 | |
| Adjustments: | |||||
| Retention awards, net of tax(5) | 410 | 2,139 | |||
| Cost-optimization initiatives, net of tax(6) | — | 3,612 | |||
| Non-recurring inventory write-off, net of tax | — | 605 | |||
| Adjusted net income(7) | $ | 123,465 | $ | 47,505 | |
Reconciliation of diluted income per common share, as reported, to adjusted diluted income per common share
| Thirteen Weeks Ended | |||||
| Diluted income per common share, as reported | $ | 2.21 | $ | 0.75 | |
| Adjustments: | |||||
| Retention awards per share(5) | 0.01 | 0.04 | |||
| Cost-optimization initiatives per share(6) | — | 0.07 | |||
| Non-recurring inventory write-off per share | — | 0.01 | |||
| Adjusted diluted income per common share(7) | $ | 2.22 | $ | 0.86 | |
(4) Gross profit, a non-GAAP financial measure, is equal to our net sales less our cost of goods sold.
(5) Retention awards relate to the on-going expense recognition of cash and equity granted to certain individuals in fiscal 2024 during the CEO transition that will be earned and will vest through fiscal 2026.
(6) Represents charges related to the cost-optimization of certain functions.
(7) Components may not add to total due to rounding.
