Five Below reported second-quarter net sales up 22.9% year over year to $1.26 billion, with comparable sales rising 14.1% and adjusted earnings more than doubling to $1.68 per share. Adjusted operating income increased 105.3% to $113.2 million, and adjusted operating margin expanded about 360 basis points to 9%, helped by higher merchandise margins and fixed-cost leverage. The stock trades at 21.84X forward 12-month earnings, above 14.41X for its Zacks sub-industry and 19.54X for the S&P 500, though below its five-year median of 27.55X, while adjusted earnings are projected to rise 51.7% in fiscal 2026. Inventory reached $941.2 million at the end of the second quarter, up 17.7% year over year, and the company faces tariff, freight, competition and litigation risks. Competitors Dollar General and Dollar Tree posted same-store sales growth of 3.5% and 3.7%, respectively, in their fiscal second quarters. Five Below carries a Zacks Rank #1 (Strong Buy), a VGM Score of B and a Growth Score of B, alongside a Value Score of D and Momentum Score of C.
Dollar General Corporation
Dollar Tree IncFive Below IncQ2 net sales rose 22.9% to $1.26B with adjusted EPS more than doubling to $1.68 and operating margin expanding 360bp.
