Inflation and rising commodity prices
Higher input and freight costs can reduce gross margin if price increases do not fully offset them.
- Scope
- Merchandise sourcing, inbound freight and tariffs
- Materiality
- high
Five Below, Inc
Five Below is a U.S. specialty value retailer built around trend-right, low-priced merchandise for tweens, teens and shoppers beyond that core age group. The company sells a rotating assortment across its eight merchandise worlds through a growing store base and an omnichannel platform that includes its website, mobile app, buy-online-pickup-in-store and third-party delivery.
13,6 %
36,0 %
7,5 %
+22,9 %
2.01
1.12
| % | |
|---|---|
| Core value merchandise | 70% Low-priced, trend-right general merchandise sold mostly at $5 and below. |
| Branded and licensed products | 10% Select national brands and licensed items used to broaden appeal and traffic. |
| Seasonal and impulse categories | 10% Party, candy, holiday and other fast-turn items that drive frequent visits. |
| Tech and accessories | 5% Affordable electronics, accessories and novelty tech products. |
| E-commerce and fulfillment services | 5% Online sales, shipping and handling revenue, BOPIS and delivery services. |
Five Below primarily serves tweens and teens who shop for self-expression, entertainment and affordable impulse...
- Tweens and teensprimary
Core target shoppers buying trend-right items for self-expression, fun and frequent small purchases.
- Parents and gift buyersprimary
Adults purchasing gifts, seasonal items and affordable products for children and teens.
- Value-oriented general shopperssecondary
Broader customer base attracted by low prices, novelty and a changing assortment.
- Digital and omnichannel shopperssecondary
Customers using the website, app, BOPIS and delivery for convenience and access.
Five Below operates entirely in the United States and had 1,771 stores in 44 states at fiscal 2024 year-end, rising to...
- •All revenue is generated in the United States
- •Store base spans 44 states and continues to expand
- •New stores are placed in power, community and lifestyle centers
- •Shipcenters in GA, TX, AZ and IN support inventory flow
- •Omnichannel sales extend reach beyond physical stores
Five Below is focused on expanding its store base, improving brand awareness and using its edited assortment to keep...
01
Store expansionshort-term
New stores are the main growth engine and increase brand reach and sales density.
02
Brand and traffic generationshort-term
Digital and seasonal marketing support customer acquisition and repeat visits.
03
Margin expansionmedium-term
Scale and supply chain efficiency are intended to offset cost pressure and support profitability.
04
Omnichannel conveniencemedium-term
Online and delivery options extend the brand and improve customer access without abandoning the low-price model.
The business is exposed to discretionary spending swings, inflation and commodity cost pressure because most products...
Weak discretionary spending
The assortment depends on impulse and non-essential purchases that can slow when consumers tighten budgets.
- Scope
- Tween/teen and value-oriented shoppers
- Materiality
- high
Distribution network disruption
Shipcenters and inventory flow are critical to keeping stores stocked and supporting growth.
- Scope
- Forsyth, Conroe, Buckeye and Indianapolis facilities
- Materiality
- high
Store expansion execution and cannibalization
Opening stores near existing locations or in weak trade areas can dilute productivity.
- Scope
- New store rollout across 44 states
- Materiality
- medium
Competitive pricing pressure
Discount, mass and online retailers can pressure traffic and force promotional activity.
- Scope
- Physical stores and e-commerce
- Materiality
- high
Revenue recognition and gift cards
Net sales and quarterly comparability
Seasonality
Quarterly revenue and margin patterns
Inventory valuation and markdowns
Gross margin and inventory carrying value
Lease accounting
Operating expenses, leverage and cash flow presentation
Impairment of distribution and store assets
Operating income and balance sheet values
: 28.4.2026