Why Is FIVE Stock Cratering Over 10% In Overnight Trading?

• Five Below’s revenue increased 32% to $1.29 billion, while net income tripled.
• “We have assumed for the back half of the year tariff rates that return to levels that they were at, at the start of our fiscal year,” said CFO Daniel Sullivan.
• Stocktwits sentiment for FIVE turned ‘extremely bullish’ from ‘bullish,’ with retail traders viewing the drop as an exaggerated reaction.

Five Below, Inc. raised its fiscal 2027 outlook after posting blowout first-quarter results on Wednesday, but shares fell 13% in overnight trading as some investors viewed the discount retailer’s guidance with skepticism, given that it assumes President Donald Trump’s tariffs will be rolled back.

The company raised its sales forecast to $5.40 billion to $5.48 billion, up from a prior forecast for $5.2 billion to $5.3 billion. Adjusted earnings view was raised to an $8.65 to $9.05 per share range, up from a $7.74 to $8.25 per share range previously projected.

“We have assumed for the back half of the year … tariff rates that return to levels that they were … at the start of our fiscal year,” CFO Daniel Sullivan said on the earnings call.

“We have now flowed through the estimated benefits from the 10% global tariff rate that is in place through July 24, and we continue to assume that the tariffs will then revert to the rates that were in place at the beginning of the fiscal year. I'd like to also point out that our guidance does not assume any impact from IEEPA tariff refunds,” Sullivan said.

FIVE’s Q1 Report

In the first quarter, Five Below’s sales jumped more than 32% to $1.29 billion, ahead of analyst estimates for $1.23 billion. The company opened 49 net new stores, while the comparable sales were up 22.7% versus an estimate of 19.6% growth.

Five Below’s profit tripled to $123.1 million from $41.1 million last year. On an adjusted basis, earnings of $2.22 per share handily topped analyst expectations of $1.77.

CEO Winnie Park called it an “outstanding quarter” and said the company saw “broad-based growth across our merchandising worlds, new and existing customers, and all demographic and geographic segments.”

Five Below sells trendy products for $5 or less, targeting teens and tweens. It operates over 1,700 stores, offering toys, tech accessories, beauty items, and seasonal goods. China is the company's largest source of imported merchandise.

Retail View On FIVE Stock

On Stocktwits, the retail sentiment for FIVE turned ‘extremely bullish’ from ‘bullish’ the previous day, with traders voicing frustration over the stock move despite what they believe were stellar results.

“$FIVE Very low liquidity after hours, so I am not concerned.  Big money doesn't typically buy shares of this size company after hours due to that very reason.  Fantastic earnings and growth - no issues here,” said a trader. Another said they are “hoping [for] a nice recovery tomorrow.”

As of their last close, FIVE shares had gained 18.3% year to date. Low-cost retail peers Dollar Tree Inc. and Dollar General Corp. also recently posted stronger-than-expected results for the last quarter.

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