Five Below Stock Breaking Out Into Earnings – Can the Rally Continue?

Five Below Inc. (NASDAQ: FIVE), the discount retailer known for its trendy and affordable merchandise, is has seen it's stock price pull back below $160 ahead of earnings, following a breakout to new highs. This latest dip comes amidst a backdrop of otherwise strong performance throughout 2025, leaving investors wondering if the company can sustain its momentum as it heads into its Q4 2025 earnings today.

The current quarter (Q4 2025) estimate stands at $0.22 per share. More significantly, analysts are projecting substantial growth in the coming quarters, with Q1 2026 estimated at $3.21 per share, Fiscal Year 2026 at $5.10 per share, and Fiscal Year 2027 at $5.54 per share.

These estimates suggest year-over-year growth, but the market will be keenly watching to see if Five Below can deliver on these expectations, especially given the current economic climate.

The stock has demonstrated considerable resilience, particularly when viewed against its moving averages. The current price comfortably sits above both the 50-day ($152.91) and 200-day ($119.38) Simple Moving Averages, a technical indicator often interpreted as a bullish signal.

2025 has been a year of notable developments for Five Below. Early in the year, the company raised its Q1 fiscal 2025 guidance, projecting net sales of approximately $967 million, a significant increase from the previous estimate. This positive revision, coupled with a projected rise in comparable sales, spurred an impressive surge in the company's stock price. The momentum continued into the second quarter, with Five Below reporting record results. Net sales increased substantially, and comparable sales rose by double digits. This strong performance led to an increased full-year 2025 guidance and plans to open approximately 150 new stores, highlighting the company's aggressive growth strategy. The stock reached a 52-week high in August, reflecting investor confidence in the company's financial health and revenue growth.

However, recent headwinds have emerged. Concerns about weakening consumer spending, fueled by reports of declining retail card spending and a dip in consumer sentiment, have weighed on the stock. Furthermore, disappointing results from peer company RH, citing tariff uncertainty and a struggling housing market, have cast a shadow over the entire retail sector, impacting Five Below's shares.

The recent appointments of Daniel Sullivan as CFO and Michelle Israel as Chief Merchandising Officer could be interpreted in different ways. On one hand, bringing in seasoned executives with extensive experience in finance and retail suggests a focus on strengthening the company's operational and financial foundation. On the other hand, major executive changes can sometimes create uncertainty and raise questions about the company's strategic direction.

A move back above $160 could signify a continued breakout for Five Below, but the stock will need support from fundamentals. Earnings, and guidance, will prove critical in determining what happens from here. Either way, expect volatility.