Five Below shares drop 11% despite Q1 earnings beat due to tariff assumptions in guidance

Five Below reported a strong first quarter with earnings per share of $2.22, beating estimates, and revenue up 32.5% to $1.29 billion. The company raised its full-year 2026 guidance, projecting net sales between $5.40 billion and $5.48 billion and adjusted EPS between $8.65 and $9.05. However, shares fell 11% as investors focused on the tariff assumptions in the guidance, which assume current tariffs until July 24 then a reversion to earlier levels, excluding potential tariff refunds or share buybacks. The company opened 49 new stores, ending the quarter with 1,970 locations, driven by strong merchandising and value strategies.