Five Below shares have gained 26.9% over the past three months, helped by improving operating momentum, rising earnings expectations and management's upgraded fiscal 2026 outlook. The Zacks Consensus Estimate for fiscal 2026 earnings has increased 15.2% in the past four weeks. Comparable sales rose 14.1% in the fiscal second quarter, a fifth consecutive quarter of double-digit growth, driven by a 13.6% rise in transactions and a 0.4% increase in average transaction value, while the two-year comparable-sales stack reached 26.5%. Adjusted gross margin expanded about 220 basis points to 35.6%, adjusted operating margin rose about 360 basis points to 9%, and adjusted operating income increased 105.3% to $113.2 million. Management raised fiscal 2026 net sales guidance to $5.63-$5.71 billion and comparable-sales growth guidance to 10%-12%, and lifted adjusted earnings per share guidance to $9.83-$10.31 from $8.65-$9.05 previously, with adjusted operating margin expected to expand about 250 basis points to roughly 12.5% at the midpoint. FIVE trades at 21.8X forward 12-month earnings, above 14.3X for its Zacks sub-industry and 19.5X for the S&P 500, while inventory stood at $941.2 million, up 17.7% year over year, and the stock carries a Zacks Rank #1 (Strong Buy).
Dollar General Corporation
Dollar Tree IncFive Below IncRaised fiscal 2026 sales, comps and EPS guidance plus margin expansion lifted consensus earnings estimates.
