Five Below Inc (NASDAQ:FIVE) stock fell 0.96% (As on December 4, 11:32:09 AM UTC-4, Source: Google Finance) after the company reported third-quarter earnings that significantly exceeded analyst expectations, driven by robust comparable sales growth and successful store expansion. The company has raised its profit outlook for the third time in its fiscal year, lifted by demand for budget-friendly trendy goods as US consumer sentiment wanes amid high prices and a weaker labor market. Comparable sales increased by 14.3% compared to the same period last year. The company opened 49 net new stores during the quarter, bringing its total store count to 1,907 locations across 44 states, representing a 9.0% increase from the same period last year. Operating income for the third quarter was $43.3 million, compared to an operating loss of $0.6 million in the third quarter of fiscal 2024. The company’s effective tax rate was 25.7% compared to 23.4% in the same period last year. Five Below’s strong performance comes as the retailer heads into the crucial holiday shopping season, with management expressing confidence in its positioning to capitalize on seasonal demand with its value-oriented merchandise strategy. Adjusted net income was $37.8 million compared to $23.3 million in the third quarter of fiscal 2024.

FIVE in the third quarter of FY25 has reported the adjusted earnings per share of 68 cents, beating the analysts’ estimates for the adjusted earnings per share of 23 cents. The company had reported the adjusted revenue growth of 23.1 percent to $1.038 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $972.43 million.

Five Below also raised its full-year outlook, now expecting fiscal 2025 revenue between $4.62 billion and $4.65 billion, with adjusted earnings per share in the range of $5.71 to $5.89 above its previous guidance of $4.76 and $5.16. FY25 Adjusted net income is expected to be in the range of $317 million to $327 million and Gross capital expenditures are expected to be approximately $200 million. The Philadelphia-based company now sees comparable sales rising about 9.4% to 10.1% in the fiscal year, up from roughly 5% to 7% it saw previously.

For the fourth quarter, the company forecasts revenue of $1.58-$1.61 billion, higher than expectations of $1.55 billion and adjusted EPS of $3.36-$3.54, above the consensus estimate of $3.28. Q4 FY25 Adjusted net income is expected to be in the range of $187 million to $197 million.