By Jennifer Williams
Five Below isn't always five and below.
The company's ethos is in the name: Toys, games, party decorations and more sell for $5 or less. But lately, more price tags are pushing above that threshold and the pricier items are no longer relegated to a back corner of stores.
It is a significant shift for a value retailer whose executives describe the company as hardwired to keep prices at or below $5. And yet, as new management simplifies pricing and focuses marketing efforts on younger shoppers, items sell for $6, $7, even $10. A Halloween skeleton recently retailed for $35.
"We believe it's all about relative value," said Chief Financial Officer Dan Sullivan. "And so we have the opportunity to go above $5 as long as we jam that item with value."
Five Below's shift to include more items above $5 comes as retailers broadly have lifted prices in recent months in an effort to offset tariffs. Americans have continued to spend, but many say they are feeling the squeeze after five years of persistent inflation and as consumers remain anxious about affordability and sluggish hiring. Value retailers such as dollar-store chains have benefited from Americans' search for discounts, even as some focus less on the $1 price point.
The pricing changes at Five Below came after the appointment of Chief Executive Winnie Park over a year ago. There are fewer price points now -- stores used to have close to 80, executives have said -- and most are in whole dollars. Five Below, which sources around 55% of its products from China, adjusted prices on about 20% of its products last year, in part to offset tariffs.
Shoppers now find pricier items mixed in with products sold for $5 or less, a change executives started rolling out in the second half of last year. "You don't typically see stores organized [with] the highest priced stuff in the back," Sullivan said. "You shop by category. You shop by need. You don't shop by price."
A bedroom mirror that might retail for $20, for instance, used to be in the back of stores, he said. This meant shoppers had to scope out two sections of the store to outfit their rooms. Now the higher-priced mirror is with the other room decor, which is boosting sales.
"We've seen a significant uplift in sales," he said of the pricier items.
The company has seen at least 12 consecutive quarters of sales growth, with net sales in each of the latest three quarters up roughly 20% or more. Net sales of $1.04 billion in the three months ended Nov. 1 were up about 23% compared with a year earlier.
While Five Below shoppers have options well above $5, such as a floor mirror and a fridge for skin-care items, each priced at $35, and a $25 scooter, Sullivan said the sweet spot above $5 is probably below $10. Roughly 80% of items sold at Five Below were $5 and under, executives said in December.
That share hasn't dropped dramatically in recent years -- in 2023 it was around 85%, said Phillip Blee, a consumer sector analyst at William Blair. But much of the decline seems to have occurred in recent months, he said. The share of items priced above $5 increased by 6 percentage points in the three months starting in early April, according to a William Blair assessment of 50 Five Below items.
Blee expects to see more items priced above $5 this year, estimating they could account for as much as 25% of products. The ones above $5 are more likely to be in the $6 to $10 range versus $20 or more, he said, adding that executives haven't shared where a price ceiling might be.
"I don't think that they're suddenly going to offer $100 items," Blee said. "But I think there are opportunities for them here and there to have a $40 toy," he offered as an example.
Five Below's shoppers tend to be tweens, or children age 8-12, and teens, though the stores also attract adults and younger children, analysts said. And they span income groups. So far, they aren't balking at the pricing changes, according to Anthony Chukumba, an equity research analyst at Loop Capital Markets. The focus on new products, particularly items featuring popular franchises such as Netflix's " KPop Demon Hunters" and "Wicked," helps keep their interest.
Plus, Five Below items priced above the $5 mark tend to cost less than the same products at other retailers, according to a Loop Capital pricing study.
"Obviously the name of the company is Five Below, but at the end of the day, you can go above $5," Chukumba said. "It's not about the absolute price point. It's about the relative value."
Write to Jennifer Williams at jennifer.williams@wsj.com
(END) Dow Jones Newswires
February 02, 2026 06:00 ET (11:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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