Dive Brief:
- Five Below’s “maniacal focus on delivering a great customer experience” drove strong financial results, CEO Winnie Park said on a Q1 2025 earnings call Wednesday.
- The discount retailer is investing in more labor hours for its store associates while simplifying their workload. As a result, workers are better able to keep shelves stocked and spend more time helping customers, according to Park.
- “The Five Below team demonstrated that they can execute at a very high level in service of our customer and will carry this forward into the balance of the year,” Park said during the call. “Our customers have validated our place in the market as a resource for fun and great value.”
Dive Insight:
Five Below brought teams together from across the business to drive its experience improvements.
“What differentiated this past quarter was our heightened focus on the customer and working as a tight knit multidisciplinary team from merchandising, planning and allocations to marketing, store operations and supply chain,” Park said.
Five Below changed gears — and CEOs — in the second half of 2024 following disappointing results during the first part of the year. The strategic shift, including its emphasis on customer service, appears to be paying off.
Comparable sales rose 7.1% year over year in the first quarter of 2025, according to a company earnings report. Net sales were up 19.5% year over year to $970.5 million.
Five Below changed procedures for associates in multiple ways, such as making it easier to close out registers, according to COO Ken Bull. The company updated its shrink procedures to put an emphasis on monitoring customers in high-shrink areas, which had the added benefit of improving customer service for legitimate shoppers.
The retailer also adjusted its inventory to focus on a smaller, curated selection of products at whole dollar price points, Park said on a March earnings call. The more focused product selection simplifies shopping for customers and stocking for associates.
“Our crew is now in a much better position to assist customers while also ensuring our shelves are stocked with trend-right products our customers want and need,” Park said on the earnings call Wednesday. “We remain committed to our crew and to making the store easier and more fun to shop for our customers.”
Marketing is playing a role in the store experience as well, according to Park. After identifying relevant trends, the team tells stories in social media posts and in-store displays.
“We remain committed to our crew and to making the store easier and more fun to shop for our customers,” Park said. “On to marketing, I continue to believe that there's a big opportunity to better connect with our customers both in-store and digitally, and ultimately increase our brand awareness.”
