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Five Below (FIVE) is heading modestly lower despite raising its Q4 (Jan) holiday guidance, typically its largest quarter of the year. The value retailer now sees EPS of $3.95-$4.00 and revenue of about $1.71 bln, both above expectations, along with comps of about +14.5%.

• The Q4 guide is notably better than expected, as on the Q3 call management had expected sales of $1.58-$1.61 bln (about +14.7% growth at the midpoint), EPS of $3.36-$3.54, and comp growth of +6-8%, implying a materially stronger holiday season.
• While +14.5% comps are strong, they are essentially in line with the run-rate from Q3 (+14.3%), which may be tempering enthusiasm given comps had been accelerating throughout the year (+7.1% in Q1; +12.4% in Q2).
• The company has been working to stay more trend-right while sharpening value across a wider range of price points, improving the customer journey, and tightening cross-functional execution, which management said drove strong, broad-based holiday results.
• Looking ahead, management plans to build on the momentum through 2026 through its focus on the "kid" customer, a more digitally led engagement model, and a test-and-ramp approach to keep product and seasonal launches fresh and repeatable.

Briefing.com Analyst Insight

FIVE's updated Q4 guidance points to a strong holiday season and continued momentum for the value retailer, with revenue, EPS, and comps all coming in well above prior guidance. Despite that, shares are trading modestly lower. We think this reflects expectations that were already elevated following the stock's strong run and broader strength across value retail, along with the fact that comps, while very strong, were relatively steady versus Q3 rather than re-accelerating. That said, the update is another reminder that value is still winning with shoppers, and FIVE is executing well to capture that demand.