Five Below raises its guidance despite 145% China tariffs, sending shares up

Well this doesn’t make much sense: Five Below, which imports 60% of its total cost of goods from China, is raising its first-quarter guidance in spite of the 145% tariffs. Investors seem to be buying what the company is selling, though, and the stock is up more than 7% as of 10:30 a.m. ET.

The discount store now expects first-quarter sales to hit $967 million, up from between $905 million and $925 million. Comparable sales are now forecast to rise 6.7%, up from previous guidance of between flat and up 2%.

Five Below plans to build 55 new stores in its first quarter, five more than previously anticipated.

Last month, it was reported that Five Below had paused orders from China “given the escalation in the tariffs.”