Five Below Investors Concerned About Losing 'Squish' Toy Momentum, Truist Says

03:13 PM EST, 11/05/2026 (MT Newswires) -- Five Below's (FIVE) "squish" product trend raised investor concerns, but the discount retailer is seeing more benefits from its process changes, which should drive stronger growth, Truist Securities said Thursday in a note. Truist's data indicates that Five Below's August and early September sales were particularly strong. While the trend seemed to decline by a few hundred basis points from its early September peak, the robust start should allow the company to beat Truist's prior Q3 forecast, the note added. Five Below is looking to attract older Gen Z customers by tapping into nostalgia, Truist said. The strategy's success suggests the company could turn the momentum of "squishy dumplings" into a series of smaller, more consistent wins in the toy category, it added. Back-to-school season could also boost Q3 results, the brokerage added. Truist raised its Q3 comparable sales growth estimate to 15% from 10% and its 2026 and 2027 EPS estimates to $10.45 and $11.15, respectively, from $10.20 and $11.00. Truist kept a buy rating on Five Below and raised its price target to $302 from $297. Price: 243.88, Change: -8.13, Percent Change: -3.23