Five Below's (FIVE) effective promotional strategies, improved product merchandising, and enhanced store operations may continue attracting customers and supporting steady sales growth for the discount retailer, BofA Securities said in a Thursday note.

Looking ahead, BofA expects Five Below to report about $8.10 in adjusted earnings per share for 2026, within the company's $7.74 to $8.25 guidance, assuming roughly 5% comparable sales growth, with margin expansion supported by pricing actions, lower tariff rates, and reduced shrink.

Analysts said marketing and merchandising efforts could drive future traffic, including social media creator content, targeted digital outreach, and "Curtain Up" events designed to introduce new products and tap into viral trends.

The bank said initiatives such as expanding price points above $5, reducing SKUs, improving in-stock levels, and strengthening seasonal merchandising could help boost average unit retail and comparable sales at Five Below over time.

BofA maintained its buy rating on the stock and raised its price target to $305 from $260.

Shares of the company were up about 8% in Thursday trading.

Price: 230.00, Change: +17.53, Percent Change: +8.25