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With just three months as CEO, Winnie Park is receiving plenty of high-fives today after leading Five Below (FIVE +7%) to a solid Q4 (Jan) report, posting comps near the high end of its previous forecast and projecting Q1 (Apr) numbers firmly above consensus. However, there were a few sticking points, as FIVE projected FY26 EPS to be markedly below consensus and revenue merely in line with estimates. The ambiguity surrounding tariffs also remains, which the company noted did its best to embed in its current FY26 outlook. Nevertheless, with shares hovering near seven-month lows over the past few trading sessions, results were ultimately better than the market feared.

• Headline Q4 numbers were not too surprising given that FIVE issued guidance in mid-January, which already encompassed the all-important holiday shopping season. However, delivering a 3% drop in same-store sales, landing at the high end of FIVE's negative 3-5% forecast issued at the time, was a welcomed development. The comp decline was fueled by transactions ticking 1.9% lower and average ticket sliding by 1.0%.
• While there were no startling developments from Q4, it is worth noting that the company finished FY25 significantly stronger than it started. During the front half of the year, FIVE hit the reset button, shifting focus to improving product value and in-store experience. By the time FIVE entered the holiday period, it could lean into newness, emphasizing value, a strategy that clearly demonstrated success.
• Under its new leader, FIVE is looking to capitalize on its upward momentum from Q4, illustrated by its upbeat guidance for Q1, projecting adjusted EPS of $0.50-0.61 and revs of $905-925 mln. FIVE also anticipates comparable store sales of flat to +2.0%, its best quarter since 4Q24 and far better than the -2.3% comps registered in 1Q25.
• However, looking out at the year, the situation becomes less clear, illuminated by FIVE's downbeat FY26 earnings outlook of $4.10-4.72. Revenue is expected to land around $4.21-4.33 bln based on flat to +3% comp growth.
• The issue revolves around tariffs and their yet-to-be-seen impacts. In 2018 and 2019, FIVE was able to mitigate tariffs, passing along costs while still registering healthy low to mid-single-digit comp growth. This time around, consumers are more price-sensitive, given the past few years of elevated inflation. As such, FIVE is taking a strategic approach to price adjustments.

With experience as the former CEO of Forever 21 and a Board member of Dollar Tree (DLTR), Winnie Park is thus far successfully steering through an onslaught of uncertainty and sticky macroeconomic issues. While FIVE's FY26 outlook is not as rosy as its Q1 guidance indicates, it is good enough given the stock's nearly 30% tumble to start the year. There are too many variables to account for, making it possible that FIVE guided too conservatively. However, by that same token, if consumer sentiment continues to weaken, FIVE may need to trim its initial forecast. This give-and-take highlights the degree of uncertainty encompassing FIVE, which may keep a lid on further appreciation over the next few months.