Five Below’s turnaround relies on marketing, merchandising, and chasing trends

In 2024, Five Below’s reputation as an innovative, fast-growing player in the discount space seemed under threat. A combination of declining same-store sales in the last quarter, the departure of its longtime CEO, and rising losses from shrink placed the company on its backfoot.

Two years later, the discount chain is taking a victory lap. Net sales jumped 22.9% in Q2 this year from 2025, and same-store sales were up 14.1% year over year.

The “flywheel” driving these results, as CEO Winifried Park told shareholders during an earnings call in September, is a combination of merchants hunting down trends, marketing teams amplifying their story, and store associates executing through merchandising.

“As our capabilities grow, the flywheel becomes more powerful, driving continued customer engagement and durable growth,” Park said during an earnings call.

Making sure each part of the flywheel works, however, is a balancing act requiring close collaboration with brands, aggressive marketing, and active merchandising in stores to move product.

“While each stands on its own in terms of importance to the model, the relationship and connectivity between all three is key to unleashing the full power of the Five Below brand and driving durable growth,” Park said.

Staying on trend: On the product side, Sakar International, a global electronics company, has worked with Five Below for the last 16 years with its electronics department, Stefan Betesh, senior vice president and director of business development at Sakar, told Retail Brew.

“They are a very aggressive buying team,” he said. “They want the hottest thing and they want it yesterday.”

• Retail Brew reached out to Five Below multiple times for comment, but did not hear back in time for publication.

Betesh said mass retailers can be more prone to setting and forgetting a product and sticking to their planograms, which has not been his experience with Five Below.

“They find a hot item, they can put it in,” Betesh said. “They make room. They figure it out.”

In the latest earnings call, Park noted that newness has always been key to Five Below’s strategy, but that what’s new now is the additional focus on marketing. “Along with the newness drops, we’re actually engaging in marketing,” she said. “We’re messaging it. We’re talking about it, and it’s working.”

Moving product: Once the products are picked and the marketing money spent, retailers still have to merchandise, and store associates are essential to this part of the process, Melissa Wong, CEO of Zipline, told Retail Brew.

Zipline provides software to retailers that communicates corporate directives to employees across their footprint, and contracts with Five Below.

Wong says that Zipline is the infrastructure that companies like Five Below can use to “communicate with and align the frontline teams.”

“If you can get your store teams involved in a product launch, that enthusiasm, that loyalty, that excitement totally translates into a better customer experience,” she said.