Five Below Q2 Results Beat Expectations

Five Below, Inc. (NASDAQ: FIVE) reported second-quarter results that exceeded expectations. On Sept. 2, 2026, the company raised its full-year sales and earnings outlook, citing continued momentum from higher traffic and store expansion.

Quarter Results and Outlook

In a Sept. 2 press release and Form 8-K filing, Five Below said net sales for the quarter ended Aug. 1, 2026, rose 22.9% to about $1.26 billion. Comparable sales increased 14.1%, marking the fifth consecutive quarter of double-digit growth. GAAP diluted earnings per share (EPS) reached $3.99, while adjusted diluted EPS more than doubled to $1.68.

Operating income climbed to $275.4 million from $52.4 million a year earlier. Adjusted operating income rose to $113.2 million from $55.1 million, lifting the adjusted operating margin to about 9.0%, up roughly 360 basis points. Gross margin expanded about 220 basis points to 35.6%. The effective tax rate declined to 23.9% from 26.2% in the prior-year quarter.

Year to date through Q2, net sales increased 27.5% to $2.55 billion, with comparable sales up 18.3%. Adjusted diluted EPS more than doubled to $3.91. The company raised its full-year fiscal 2026 guidance to net sales between $5.63 billion and $5.71 billion and GAAP diluted EPS between $12.10 and $12.58. Adjusted EPS guidance was updated to roughly $9.83 to $10.31. Management expects full-year comparable sales growth of about 10% to 12%, driven by continued traffic gains and store expansion.

Capital Allocation and Store Growth

Five Below opened 52 net new stores during the quarter, ending with 2,022 locations across 46 states. This represents an 8.8% increase in store count year over year, which management cited as contributing roughly 9% to sales growth.

The company repurchased about 311,000 shares for approximately $60 million. Its board authorized a new $600 million share repurchase program with no fixed expiration, replacing the prior program’s remaining capacity. At quarter end, Five Below held about $1.2 billion in cash, cash equivalents, and investments, including $170 million in pretax tariff refunds under the International Emergency Economic Powers Act (IEEPA). These refunds and certain retention awards accounted for most adjustments between GAAP and adjusted results.

The stronger comparable sales, margin expansion, and open-ended repurchase authorization, supported by a robust cash position, provide management flexibility to balance further store growth with returning capital to shareholders.