Five Below Stock

Five Below, Inc. operates as a specialty value retailer offering merchandise targeted at the tween and teen demographic.

The company offers a dynamic, edited assortment of exciting products, most priced at $5 and below, including select brands and licensed merchandise across eight worlds: Style, Room, Sports, Tech, Create, Party, Candy and New & Now.

The company offers its merchandise on the internet, through its fivebelow.com e-commerce website, as well as with an on demand third party delivery service to enable its customers to shop online and receive convenient same day delivery. All e-commerce sales, which includes shipping and handling revenue, are included in net sales and are included in comparable sales.

Strategy

The company’s strategy predominantly includes the use of digital marketing, streaming video, television, philanthropic and local community marketing to support existing and new market entries. The key elements of the company’s strategy are to grow its store base; drive comparable sales; and increase brand awareness.

The company offers a dynamic, edited assortment of trend-right, high-quality products, with most priced at $5 or below, including select brands and licensed merchandise, targeted at the tween and teen customer. The company is transforming the shopping experience of its target demographic with a unique merchandising strategy and high-energy retail concept that its customers consider fun and exciting.

The company’s typical store features in excess of 4,000 products across a number of its category worlds, including Style, Room, Sports, Tech, Create, Party, Candy and New & Now. The company focuses its merchandising strategy on maintaining core categories within its stores, but aim to generate high item velocity and sell-through to keep its assortment fresh and drive repeat visits.

The company offers a compelling value proposition to its customers across all of its core product categories. The common element of the company’s dynamic merchandise selection is the consistent delivery of exceptional value to the consumer, with most products offered at or below the $5 price point. Many of the products the company sells can also be found in mall specialty stores, department stores, mass merchandisers and drug stores.

Product Mix

The company organizes the merchandise in its stores into the following category worlds:

Style: Consists primarily of accessories, such as novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms and attitude t-shirts. The company’s style offering also includes products, such as nail polish, lip gloss, fragrance, and branded cosmetics.

Room: Consists of items used to complete and personalize the company’s customer’s living space, including glitter lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty decor, accent furniture and related items. The company also offers storage options for the customer’s room.

Sports: Consists of an assortment of sport balls, team sports merchandise and fitness accessories, including hand weights, jump ropes and gym balls. The company also offers a variety of games, including name brand board games, puzzles, collectibles and toys, including remote control. In the summer season, its sports offering also includes pool, beach and outdoor toys, games and accessories.

Tech: Consists of a selection of accessories for cell phones, tablets, audio and computers. The offering includes cases, chargers, headphones and other related items. The company also carries a range of media products, including books, video games and DVDs.

Create: The company offers an assortment of craft activity kits, as well as arts and crafts supplies, such as crayons, markers and stickers. The company also offers trend-right items for school such as backpacks, fashion notebooks and journals, novelty pens and pencils, locker accessories, as well as everyday name brand items.

Party: Consists of party goods, decorations, gag gifts and greeting cards, as well as every day and special occasion merchandise.

Candy: Consists of branded items that appeal to tweens and teens. This category includes an assortment of classic and novelty candy bars and movie-size box candy, seasonal-related candy, as well as gum and snack food. The company also sells chilled drinks via coolers.

New & Now: Consists of seasonally-specific items used to celebrate and decorate for events such as Christmas, Easter, Halloween and St. Patrick’s Day. These products are most often placed at the front of the store.

Marketing and Advertising

The company’s marketing strategy is designed to promote brand awareness and drive store and website traffic with its target demographic, as well as other value-oriented customers. The company’s strategy includes highlighting its brand, exceptional value and quality proposition predominantly through the use of digital advertising, commercials (on television and through streaming), affiliate marketing, social influencers, content creators, syndicated talk show integrations and local marketing, with a focus on peak selling seasons. Additionally, the company relies on the strong visibility and the presence of its store locations, email messaging and philanthropic community fundraising to promote and further its brand image and drive traffic. The company’s digital experience, anchored by its mobile e-commerce website, app and social media presence is growing rapidly as it utilizes TikTok, Instagram, Facebook, YouTube and Snapchat to engage its customers with compelling digital content on a frequent basis.

For new store openings, the company seeks to create community awareness and consumer excitement predominantly through digital advertising, public relations, community outreach and events promoting the grand opening. In addition to its marketing and advertising efforts, the company maintains an e-commerce website (www.fivebelow.com) and, over the last few years, its online following has grown substantially. The company uses both its website and social media channels to highlight its featured products, value/quality proposition, store locations, employment opportunities, and grand openings.

Trademarks and Other Intellectual Property

The company owns several trademarks that have been registered with the U.S. Patent and Trademark Office, including Five Below, Five Beyond and Five Below Hot Stuff. Cool Prices. The company also owns domain names, including www.fivebelow.com, and unregistered copyrights in its website content.

Seasonality

The company’s business is seasonal in nature with the highest level of net sales and net income generated in the fourth fiscal quarter due to the year-end holiday season and, therefore, operating results for any fiscal quarter are not necessarily indicative of results for the full fiscal year. To prepare for the holiday season, the company must order and keep in stock more merchandise than it carries during other parts of the year. The company expects inventory levels, along with an increase in accounts payable and accrued expenses, generally to reach their highest levels in the third and fourth fiscal quarters in anticipation of the increased net sales during the year-end holiday season. As a result of this seasonality, and generally because of variation in consumer spending habits, the company experiences fluctuations in net sales, net income and working capital requirements during the year (year ended January 28, 2023).

History

The company was founded in 2002. It was incorporated in Pennsylvania in January 2002. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002