Five Below Considering 'Price Adjustments'

Five Below, a popular chain of specialty discount stores named for pricing most of its products at $5 or less, had a difficult 2024 holiday season. 

The company's fourth-quarter earnings report for 2024 showed that even with opening 22 new stores during that usually busy last quarter of the year, its comparable sales were down by 3% year-over-year.

Now, Five Below has a new CEO in Winnie Park, who came to the company from Forever 21, where he had served as CEO since January 2022.

On Five Below's latest earnings call, Park said that Five Below is going back to its main focus at whole $1 to $5 price points and "raising the bar on adding value to our highly edited assortment of product above $5."

"Our priority is to keep prices low and our offering accessible to ensure we maintain the trust and loyalty of our customers and attract new customers to the brand," he added.

Also during the call, the topic of possible tariffs on goods imported from Mexico and Canada came up.

"We've navigated tariffs before," Five Below chief financial officer Kristy Chipman said, adding that the "breadth and magnitude" of the new tariffs, though, "are significant given that approximately 60% of our total cost of goods are imported from China, either directly or through our domestic vendors."

So, Chipman said that one of the initiatives to deal with the tariffs is "selective price adjustments."

"These initiatives include vendor collaboration, selective price adjustments, primarily within our $1 to $5 price points, diversification of sourcing, and increasing our focus on product newness," Chipman explained.

Park added that the company has "been very, very careful and surgical about where we are looking at price adjustments both up and down," and that they want to "simplify the price position so that the customer begins to see more of those whole price points."

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