Five Below looks to triple store count by 2030

Dive Brief:

In its latest earnings release, discounter Five Below laid out long-term goals to grow its sales and footprint.
The retailer set a goal of tripling its store count to more than 3,500 locations by 2030, up from 1,190 stores at the end of 2021.
Roughly 1,000 of those stores Five Below plans to open by the end of fiscal 2025. Also by that time Five Below is aiming to double its sales and earnings per share.

Dive Insight:

Five Below dubbed its plan a "Triple-Double" plan for growth, after the doubled sales and tripled store count that the plan aims for.

The strategic plan follows a year of strong growth for the retailer, with 2021 net sales up 45.2% year over year to about $2.8 billion, with comparable sales up over 30%. Net sales were also up more than 54% from 2019, showing the retailer has surpassed its pre-pandemic performance.

The company also added to its store count during that time, with 170 net new stores in 2021 — 50 more than it opened the year before. Looking ahead, Five Below plans to open up to 400 stores over the next two years and up to 600 during the 2024 and 2025 fiscal years.

In a press release, CEO Joel Anderson called 2021 "a record year," capped off by fourth quarter comp sales growth of 3.4%, which Anderson noted came against a difficult comparison to "stimulus-fueled" growth in Q4 2020.

For the current year, Anderson said the retailer plans to grow its Five Beyond store prototype — which features a broadened assortment at price points over $5 — expand its categories and pilot new services. Those new areas include ear piercings and balloons at select stores, executives said at the company's analyst meeting.

Management's guidance anticipates a possible decline of comps early in the year, for Q1, as the retailer laps a boom in consumer spending in early 2021, but executives expect sales to improve over the year.

Telsey Advisory Group analysts led by Joe Feldman said in a research note that they had confidence in Five Below's "sustainable long-term growth trajectory — driven by continued strong execution and the test-and-learn culture."

Five Below's peers in the value space are also growing their footprints. Dollar General plans to add 1,110 new stores this year after adding more than 1,000 in 2021. It is also growing its Popshelf concept, which launched in 2020 and which some analysts have compared to a Five Below for an older demographic. Big Lots, Burlington and others also have big opening plans this year.