Five Below (NASDAQ:FIVE) shares fell about 11% at Thursday’s market open, as investors looked past a stronger-than-expected first quarter earnings report and instead focused on the assumptions underlying the company’s raised full-year guidance.
Five Below raised its full-year fiscal 2026 guidance, projecting net sales of $5.40 billion to $5.48 billion and adjusted diluted earnings per share of $8.65 to $9.05
The discount retailer said its fiscal 2026 outlook reflects tariff rates currently in place through July 24 and assumes they will revert to levels that existed at the start of the fiscal year for the remainder of the year. The guidance also excludes any potential benefit from tariff refunds or share repurchases. For the first quarter ended May 2, Five Below reported adjusted diluted earnings per share of $2.22, exceeding the Wall Street consensus estimate of $1.69.
Revenue increased 32.5% year over year to $1.29 billion, above analysts’ expectations of approximately $1.20 billion. Comparable sales rose 22.7% during the quarter, while operating income climbed to $154.2 million from $50.8 million a year earlier. Operating margin expanded to 12% from 5.2% in the prior-year period.