Five Below Faces Sales Slump Amid Inflation and Overstock Issues

Discount retailer struggles as lower-income consumers cut back on spending and outdated inventory piles up

Five Below's first-quarter revenue and earnings missed expectations, leading to a downward revision of its annual forecast.
Comparable store sales dropped 2.3% year-over-year, significantly impacting overall performance.
CEO Joel Anderson highlighted that inflation has made lower-income customers more selective with their purchases, focusing on essentials.
The retailer's overstock of Squishmallows contributed to its financial troubles, as demand for non-essential items declined.
Shares of Five Below have fallen over 45% in 2024, reflecting broader economic challenges faced by the company.