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Five Below's Higher Spending per Visit Supports Sales Momentum

Five Below, Inc. FIVE continues to benefit from customers spending more during each store visit, supporting the retailer’s strong sales performance and reinforcing the effectiveness of its merchandising strategy. The value retailer reported net sales of nearly $1.3 billion in the first quarter of f…

Five Below, Inc. FIVE continues to benefit from customers spending more during each store visit, supporting the retailer’s strong sales performance and reinforcing the effectiveness of its merchandising strategy. The value retailer reported net sales of nearly $1.3 billion in the first quarter of fiscal 2026, up almost 33% year over year, fueled by a 23% increase in comparable sales and strong contributions from newly opened stores.

A key driver behind this momentum was the combination of rising customer traffic and higher average ticket sizes. Management noted that comparable sales growth was supported by a 19% increase in transactions and a 4% rise in ticket value, reflecting healthy consumer engagement and the company’s ability to offer compelling products across multiple price points.

Five Below’s merchandising strategy continues to resonate with shoppers. The retailer has expanded its assortment while maintaining a strong value perception, with more than 80% of its products still priced at $5 and below. At the same time, customers have responded positively to higher-priced items that offer strong perceived value, helping increase spending per visit without sacrificing traffic.

The company also benefited from successful trend-driven merchandising and targeted marketing initiatives. Popular categories such as toys, collectibles, candy, beauty and seasonal products attracted shoppers, while social media-driven campaigns helped bring new customers into stores. Management highlighted strong growth in both new and repeat customers, reinforcing the effectiveness of its evolving customer engagement strategy.

Encouraged by its first-quarter performance, Five Below raised its fiscal 2026 outlook. The company now expects fiscal 2026 sales of $5.4 billion to $5.48 billion and comparable sales growth of 6% to 8%. As customers continue to embrace the retailer’s value-focused assortment and spend more per visit, higher ticket growth is expected to remain an important contributor to overall sales momentum.

ULTA & BBWI’s Sales Picture vs. FIVE

Ulta Beauty, Inc.’s ULTA sales momentum remained strong in the first quarter of fiscal 2026, supported by broad-based growth across channels and categories. Ulta Beauty’s net sales increased 11.1% year over year to $3.16 billion, while comparable sales rose 5.3%, driven by a 3.7% increase in average ticket and a 1.6% gain in transactions.

Stores and digital operations contributed to growth, with e-commerce delivering mid-teen sales gains. Fragrance, prestige beauty and haircare were among the strongest-performing categories, highlighting healthy consumer demand across the portfolio. Ulta Beauty reported positive contributions from all major categories and channels, underscoring the resilience of its business model and reinforcing confidence in its ability to sustain growth in a dynamic retail environment.

Bath & Body Works, Inc.’s BBWI sales performance remained challenged in the first quarter of fiscal 2026, though results came in ahead of expectations. The company reported net sales of $1.38 billion, down 3% year over year, as underlying business trends remained pressured and largely consistent with those of recent quarters.

Despite these headwinds, Bath & Body Works is beginning to see encouraging signs from its Consumer First Formula strategy. Soaps & Sanitizers recorded low-single-digit sales growth, while international retail sales increased at a double-digit pace, partially offsetting weakness in Body Care and Home Fragrance. Bath & Body Works noted that investments in product innovation, brand revitalization and marketplace expansion are starting to resonate with consumers, providing early evidence that these initiatives could support a return to sustainable growth over time.

FIVE’s Price Performance, Valuation & Estimates

FIVE shares have rallied 41.1% over the past year against the industry’s decline of 9.6%.

From a valuation standpoint, Five Below is trading at a trailing 12-month price-to-sales ratio of 2.00X, up from the industry average of 1.62X. It has a Value Score of B.

The Zacks Consensus Estimate for Five Below’s fiscal 2026 earnings implies year-over-year growth of 34.3%, whereas the same for fiscal 2027 indicates an uptick of 9.3%. Estimates for fiscal 2026 and 2027 have been revised upward by 45 cents and 36 cents, respectively, over the past 30 days.

Five Below currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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