Five Below reported a solid Q4 2024, delivering revenue of $1.39 billion, up 7.8% year over year, while comps declined 3.0% as the holiday period contained five fewer shopping days. Adjusted gross margin was 40.5% (down ~60 bps YoY) with fixed-cost deleverage and higher SG&A pressuring profitability; however, adjusted operating margin held at 18.2% with an 18.2% operating income of $246.8 million. The company closed the year with 1,771 stores after opening 228 in 2024 and generated strong cash flow ($363.5 million operating cash flow; $311.4 million free cash flow) and net cash positions with approximately $529 million in cash and short-term investments and no net debt, enabling a robust balance sheet to fund growth initiatives. Full-year 2024 results showed revenue of about $3.88 billion (+10.4% YoY) with a negative comp of 2.7% and adjusted net income of $277.8 million ($5.04 adjusted EPS). Management emphasized a reset in H2 2024 focused on improving product, value, store experience, and in-stock positions, leading to improved second-half performance and positive early signs of scale-driven efficiency.
Looking ahead, Five Below guided to 2025 sales of $4.21â$4.33 billion (+~10% at the midpoint) with flat-to-positive 3% comparable sales and an adjusted operating margin around 7.3% (midpoint), implying roughly 180 bps of deleverage driven by tariffs, partially offset by mitigations including pricing actions, vendor diversification, and increased product newness. Adjusted diluted EPS is guided to $4.10â$4.72 for the year. The company plans to open roughly 150 new stores in 2025 (vs. ~228 in 2024) and capex of $210â$230 million, signaling a matured pace of expansion alongside ongoing investments in labor, systems, and infrastructure. Management highlighted a clear strategic pivot to $1â$5 price points with stronger value messaging above $5, a renewed marketing emphasis following the hiring of a Chief Marketing Officer, and potential further expansion in growth markets (e.g., Pacific Northwest) to accelerate unit growth toward the long-run target of ~3,500 stores.