Five Below Inc (0IPD.L) Q1 2025 Earnings Report

QQ1 2025 highlights and trend context:
- Revenue: $970.5 million, up 19.5% YoY (vs. $811.9 million in QQ1 2024); QoQ revenue moved down meaningfully due to seasonality (Q4 2024 revenue was $1.39 billion; QQ1 QoQ change -30% approx.).
- Gross profit: $323.9 million, gross margin 33.38% (up ~140 bps YoY); improved inventory health reduced reserves for aged inventory and supported fixed‑cost leverage.
- Operating income: $50.85 million, operating margin 5.24% (adjusted margin +140 bps to 6.1%).
- Net income and EPS: Net income $41.15 million; diluted EPS $0.75 GAAP; adjusted net income $47.5 million; adjusted diluted EPS $0.86 (vs. $0.60 prior year).
- Cash flow and liquidity: Net cash provided by operating activities $132.66 million; free cash flow (FCF) $96.45 million; cash and investments ~$427.46 million; management indicated no debt on the operating line (per call) notwithstanding reported debt data in the balance sheet data provided.
- Store growth and productivity: Opened 55 net new stores in QQ1 (out of a target cadence that supports a roughly 150 net new stores for the year), total stores ~1,826 at quarter end; new store productivity ~87% (above the mid‑80s target).
- Tariffs and guidance: Management reaffirmed a tariff‑mitigation program (vendor diversification, sourcing diversification, value‑oriented pricing) and raised full‑year net revenue guidance to $4.33–$4.42 billion; adjusted diluted EPS guidance $4.25–$4.72; gross margin pressure is expected in the near term with offsetting fixed‑cost leverage. The company signaled a ~10 percentage point reduction in China sourcing in the back half of the year and ongoing inventory optimization to support the plan.