Five Below raises full-year outlook after strong second-quarter sales growth

Investing.com -- Five Below raised its full-year sales and adjusted earnings outlook on Wednesday, betting that strong customer demand and continued store expansion will sustain momentum through the holiday season.

The discount retailer now expects fiscal 2026 net sales of $5.63 billion to $5.71 billion, up from its previous forecast of $5.40 billion to $5.48 billion. It raised its adjusted net income forecast to $546 million to $572 million, from $482 million to $504 million, while adjusted diluted earnings per share are now expected at $9.83 to $10.31, versus $8.65 to $9.05 previously.

The upgraded outlook follows a strong second quarter in which Five Below delivered a 22.9% increase in net sales and a 14.1% rise in comparable sales, extending its streak of double-digit comparable sales growth to five quarters. The company is also expanding its store base rapidly and has authorized a new $600 million share repurchase program.

For the third quarter, the company expects net sales of $1.21 billion to $1.23 billion, with comparable sales growth of 8% to 10%. It expects adjusted earnings per share of $1.01 to $1.13 on a diluted basis.

In the second quarter ended Aug. 1, net sales rose to $1.26 billion from $1.03 billion a year earlier. Adjusted net income increased to $93.4 million, or $1.68 per diluted share, from $44.8 million, or $0.81 per share.

The retailer opened 52 net new stores during the quarter, ending the period with 2,022 stores across 46 states. Its store count increased 8.8% from a year earlier.

For the first half, net sales increased 27.5% to $2.55 billion, while adjusted net income climbed to $217.1 million, or $3.91 per diluted share, from $92.3 million, or $1.67 per share, a year earlier.

Management said the combination of new-store growth and double-digit comparable sales gains demonstrated increasing momentum in its operating strategy and pointed to further opportunities during the holiday season.

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