Shares of Five Below (FIVE) surged 12.12% in pre-market trading on Thursday following the release of the company's fourth-quarter financial results and optimistic outlook for the upcoming fiscal year. The discount retailer exceeded analyst expectations, demonstrating resilience in a challenging retail environment.

Five Below reported adjusted earnings per share of $3.48 for the fourth quarter, surpassing the analyst consensus of $3.38. The company's net sales reached $1.39 billion, up 3.7% from a year earlier and slightly above analyst estimates. Notably, comparable sales declined by 3.0%, which was better than the expected 3.3% drop, indicating improved performance in existing stores.

Adding to the positive sentiment, Five Below provided an upbeat outlook for fiscal 2025. The company's mid-2024 reset, which focused on emphasizing new products and optimizing labor and workflows, resulted in a better-than-expected end to the year. This momentum is anticipated to continue, with Five Below projecting full-year net sales between $4.21 billion and $4.33 billion. The retailer's focus on product newness, value, and store experience, along with its expanding store base, suggests continued growth and profitability, contributing to the stock's significant pre-market rally.