Five Below Plans Puerto Rico Stores for 2027 Expansion

Five Below Plans Puerto Rico Stores for 2027 Expansion · CRE Daily

Nina Dale

Sat, September 5, 2026 at 8:46 PM GMT+3 4 min read

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Key Takeaways

Five Below plans to enter Puerto Rico in the second half of 2027 with a handful of initial stores.
Second-quarter net sales rose 22.9% to $1.26B, while comparable sales increased 14.1%.
The retailer ended the quarter with 2,022 stores and is keeping its 2026 plan for about 150 net new locations.

Five Below is preparing to enter Puerto Rico as its store fleet moves beyond 2,000 locations. CoStar's report on the retailer's next expansion market says the chain plans a handful of Puerto Rico stores in the second half of 2027. Management described the territory as a strong customer fit with attractive real estate opportunities. The rollout will remain measured.

Sales Momentum Supports Expansion

Five Below reported second-quarter fiscal 2026 net sales of $1.26B. That was up 22.9% from $1.03B a year earlier. Comparable sales increased 14.1%, and the company said results exceeded its expectations.

CEO Winnie Park credited a customer-focused strategy and operating-model changes. She said merchandise trends across room decor, toys, technology, and snacks performed well. Trend-driven products included squishy dumplings, collectible fidget toys sold in mystery packages.

Park said the company has built a repeatable process for spotting merchandise trends, marketing them, and carrying those themes through the store experience. Management also said new stores continue to perform strongly.

Five Below's concept centers on toys, candy, home decor, sporting goods, party items, and other trend-driven merchandise. Most items are priced from $1 to $5.

The Store Base Passes 2,000 Locations

Five Below opened 52 net new stores during the quarter and ended with 2,022 locations in 46 states. That was an 8.8% increase from the end of the prior-year quarter.

Five Below's discount store expansion continues after its fleet passed 2,000 locations in July.

The 2,000th store opened in July at 299 Commerce Ave. in LaGrange, Georgia. In August, the retailer entered Idaho, its 47th state, with a store at Nez Perce Plaza in Lewiston.

The state expansion shows how the chain is still filling geographic gaps even before Puerto Rico. By late summer, Five Below had reached 47 states while continuing to add locations inside existing markets.

Puerto Rico Opens New White Space

Park said Puerto Rico offers a customer base that fits Five Below's mix of kid-focused merchandise and value pricing. The company sees no direct local retail concept offering the same combination.

The chain expects to open only a handful of stores at first. Management plans to build its presence carefully and evaluate performance before accelerating.

Puerto Rico is therefore being treated as a new-market test rather than an immediate large-scale rollout. The company sees the territory as white space for its combination of youth-oriented products and low price points.

Store Growth Remains Disciplined

Five Below raised its full-year sales guidance after the quarter, but it did not increase its 2026 new-store target. The company still expects about 150 net new locations this year.

Chief Financial Officer Dan Sullivan said capital is not the constraint. The company is balancing execution quality, operating capacity, and real estate availability. Management does not want faster growth to lower the standards it has set for new locations.

Sullivan said the company is scaling the capabilities needed to support more stores without sacrificing execution. That includes the ability to select sites, open stores, and maintain the operating standards behind recent sales gains.

The unchanged opening target shows that strong comparable sales are not automatically translating into a faster construction and leasing schedule. Management is keeping the real estate pipeline tied to execution capacity.

Real Estate Availability Shapes the Pace

Sullivan emphasized that expansion depends on finding the right properties and locations. Site availability can limit growth even when sales and capital support more openings.

For landlords and retail owners, the Puerto Rico plan adds another growth market for a chain that has already reached 47 states.

Five Below sells toys, candy, home decor, sporting goods, party merchandise, and other products. Much of the assortment is priced from $1 to $5.

The company's decision to keep its 2026 opening target at about 150 stores suggests management is prioritizing location quality over simply accelerating unit count after a strong quarter.