Click to view the earnings moves in FIVE
Five Below's Post-Earnings Drop: Just a Blip or Sign of More?
Five Below (NASDAQ: FIVE) announced its latest earnings today, sending the stock down -1.3% to $193.19, despite delivering blowout holiday sales and raising its full-year outlook. If you’re wondering whether this move is business as usual or the start of a new trend, you’re not alone. There’s a lot to unpack in the data—and some surprises.
Holiday Results Sizzle, but Stock Simmers
The numbers from Five Below’s holiday quarter were strong: net sales surged 23.2% to $1.47 billion and comparable sales jumped 14.5%. CEO Winnie Park highlighted the “broad-based results” and improved customer experience, pushing management to boost their full-year forecast. You’d think with results like that, the stock would soar. Yet, options traders had braced for a much bigger move (±7.7%), and reality delivered only a modest drop.
So, why the muted reaction? To understand, let’s dive into how FIVE’s stock historically reacts around earnings.
What the Numbers Say: FIVE's Wild Earnings Ride
Looking back over the last 12 quarters, Five Below’s stock is anything but predictable around earnings. Here’s how the numbers shake out:
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Average Return | +0.2% | +1.1% | +3.1% | -3.8% | -0.8% |
| % of Moves Up | 58.3% | 58.3% | 25.0% | ||
| % of Moves Down | 41.7% | 41.7% | 75.0% |
Even though the average move on earnings day is a paltry +0.2%, the Open Gap (move from previous close to next open) is a touch stronger at +1.1%. But the action during the day tends to favor the downside, averaging -0.8% from open to close, with the stock finishing lower 75% of the time after the open. Clearly, earnings day for Five Below can be full of twists.
How Big Could the Swings Get?
| Stock Performance | Earnings Move | Open Gap | Open to High | Open to Low | Open to Close |
|---|---|---|---|---|---|
| Absolute Average Return | 5.8% | 7.5% | 3.1% | 3.8% | 3.2% |
| Max Absolute Return | 15.4% | 18.8% | 10.8% | 7.6% | 10.1% |
| Min Absolute Return | 0.2% | 1.2% | 0.3% | 1.2% | 0.0% |
Volatility has a starring role: the average absolute move is 5.8% on earnings day, with maximum swings topping 15.4%. So, even when the average appears tame, massive moves aren’t exactly rare.
What Happens After Earnings? Watch for the Drift
What about the days after earnings? History reveals a cautious trend. Here’s how the numbers play out over the two weeks following reports:
| Stock Performance | 1 Day After Earnings | 2 Days After Earnings | 3 Days After Earnings | 1 Week After Earnings | 2 Weeks After Earnings |
|---|---|---|---|---|---|
| Average Return | -0.7% | -0.4% | -0.6% | -0.4% | +0.4% |
| % of Moves Up | 27.3% | 27.3% | 54.5% | 54.5% | 36.4% |
| % of Moves Down | 72.7% | 72.7% | 45.5% | 45.5% | 63.6% |
The stock has a habit of losing steam, with negative average returns one day, two days, three days, and a week out from earnings. Only after two weeks does the average turn slightly positive (+0.4%), but even then, only 36.4% of those periods ended higher.
For more granular data and deeper analysis, explore the full historical earnings stock performance here.
Should You Expect More Volatility Ahead?
Today’s modest drop stands in contrast to both Five Below’s impressive holiday results and the steeper moves options traders had been betting on. With a history of big swings and a stock that tends to drift lower after earnings, traders will be watching closely to see if the outstanding sales numbers can break the usual post-earnings slump.
While history suggests the odds tilt toward more muted or negative movement in the days ahead, Five Below’s upgraded guidance and sales acceleration could prove to be a gamechanger. Will the rally finally stick, or is another earnings drift on deck?
Only time (and perhaps the next quarterly report) will tell.
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