FIVE

Five Below has snapped back to its high-growth form. After a soft fiscal 2024 (comps -2.7%), comparable sales rose 12.8% in fiscal 2025 and total revenue grew 22.9% to $4.76B. Profitability scaled even faster: operating income and net income both rose ~41% (to $457M and $359M), and diluted EPS climbed 40.7% to $6.47. This is the company's proven specialty-value model — trend-right merchandise mostly at $5 and below — working again across diverse geographies.

The growth runway is the core of the thesis. Five Below operated 1,921 stores in 46 states at fiscal year-end and believes it can expand to more than 3,500 locations over time, with ~150 net new stores planned in fiscal 2026. The unit economics are excellent: a new store costs ~$0.4M, generates ~$2M of sales in year one, and pays back in roughly one year — a self-funding expansion engine. That shows in the financials: operating cash flow rose 36.2% to $586M, capex actually fell 46.1% to $175M, cash more than doubled to $724M, and there is no debt (current debt $0.00). Return on equity is a healthy 16.4%.