Five Below has had a rough year so far. Here’s why

Since going public in 2012, discount retailer Five Below has grown its nationwide store count from less than 250 locations to more than 1,600. 

“It’s been one of the success stories of U.S. retail over the past five or so years,” said Neil Saunders, managing director of GlobalData Retail.

Five Below’s net sales surpassed $3.5 billion in 2023, more than double those of just five years prior. Analysts attribute much of the company’s success to its ability to stay on trend and offer value to the consumer.

Despite an impressive few years of growth, things have taken a turn for the worse in 2024. The company’s share price fell to a 52-week low in the first week of June as the company grapples with mounting shrink, or inventory losses from various sources; inflationary pressure; and overseas competition.

“You’re paying a premium to get the growth that they’re providing you,” said Joe Feldman, senior managing director of Telsey Advisory Group. “But that premium, when things don’t go your way, like the shrink issue, it can hurt you. And you see a big give up in the stock.”

Watch the video to find out why Wall Street is still bullish on Five Below.