Five Below Inc (FIVE)
Profitability ratios
Return on sales
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 34.89% | 10.32% | 35.79% | 35.61% | 35.61% |
| Operating profit margin | 8.35% | 10.83% | 10.83% | 11.22% | 11.22% |
| Pretax margin | 8.74% | 11.27% | 11.27% | 11.30% | 11.30% |
| Net profit margin | 6.54% | 8.46% | 8.46% | 8.50% | 8.50% |
Five Below Inc's profitability ratios have shown some fluctuations in recent years.
1. Gross Profit Margin: The company's gross profit margin remained relatively stable around 35% from January 28, 2023, to January 31, 2024. However, there was a sudden decrease to 10.32% on February 3, 2024, before recovering slightly to 34.89% by January 31, 2025. This sudden drop in the gross profit margin in February 2024 may indicate operational challenges or changes impacting the company's ability to generate profit from its sales.
2. Operating Profit Margin: Five Below Inc's operating profit margin hovered around 11-12% from January 28, 2023, to January 31, 2024. There was no significant change in this ratio during this period. However, by January 31, 2025, the operating profit margin declined to 8.35%. This decline suggests that the company's operational efficiency may have declined, resulting in lower profitability from its core business activities.
3. Pre-tax Margin: The pre-tax margin remained relatively consistent around 11% from January 28, 2023, to February 3, 2024, indicating stable profitability before dropping to 8.74% by January 31, 2025. This decline in pre-tax margin suggests that the company's overall profitability before tax decreased in the last period analyzed, potentially due to higher expenses impacting the bottom line.
4. Net Profit Margin: Five Below Inc's net profit margin also exhibited a downward trend, decreasing from 8.50% on January 28, 2023, to 6.54% on January 31, 2025. This decline in net profit margin indicates that the company's bottom line profitability has decreased over the years, potentially due to increasing costs or other factors impacting the company's ability to generate profits after all expenses are accounted for.
Overall, while Five Below Inc has maintained relatively healthy profitability margins in the past, the recent declines in operating profit margin, pre-tax margin, and net profit margin raise some concerns about the company's ability to sustain its profitability levels in the future. Further analysis of the company's operations and cost structures may be necessary to understand the drivers behind these changes and to take appropriate corrective actions.
Return on investment
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.46% | 9.96% | 9.96% | 10.38% | 10.38% |
| Return on assets (ROA) | 5.84% | 7.78% | 7.78% | 7.87% | 7.87% |
| Return on total capital | 0.06% | 24.33% | 24.33% | 25.33% | 25.33% |
| Return on equity (ROE) | 0.04% | 19.00% | 19.00% | 19.20% | 19.20% |
Five Below Inc's profitability ratios have shown a declining trend over the years. The Operating return on assets (Operating ROA) has declined from 10.38% in January 2023 to 7.46% in January 2025, indicating a decrease in the company's operating efficiency in generating profits from its assets.
The Return on assets (ROA) has also decreased from 7.87% in January 2023 to 5.84% in January 2025, reflecting a decrease in the company's overall profitability in relation to its total assets.
The Return on total capital has shown a significant decline from 25.33% in January 2023 to only 0.06% in January 2025, indicating a sharp decrease in the company's ability to generate returns on its total capital employed.
Similarly, the Return on equity (ROE) has also decreased from 19.20% in January 2023 to 0.04% in January 2025, signifying a decline in the company's ability to generate profits for its shareholders.
Overall, the downward trend in profitability ratios for Five Below Inc raises concerns about its efficiency in generating returns for both its assets and capital, as well as its ability to deliver value to its shareholders.