Five Below: Comparable Sales Slip as Inflation Continues

Joel Anderson, CEO of Five Below, attributed the decline in comparable sales among lower-income consumers to several factors. Primarily, he pointed to consumers being "more discerning with their dollars, increasingly buying to need." He explained that while the company achieved positive comps in higher-income cohorts, there was underperformance in the lower-income demographic that offset these results. Anderson also stated that the quarter solidified the fact that consumers are feeling the impact of multiple years of inflation across key categories such as food, fuel, and rent, making them more cautious with their discretionary spending.

Five Below observed positive trends among higher-income consumers as they achieved positive comparable sales in this demographic. This suggests that some trade-down of higher-income customers seeking value at Five Below stores occurred. CEO Joel Anderson mentioned that consumers are becoming more discerning with their dollars and increasingly buying to need due to the impact of inflation on key categories such as food, fuel, and rent.