Why Five Below Inc. (FIVE) Went Down On Thursday?

We recently published a list of 10 Firms Take a Beating on Tariff Worries. In this article, we are going to take a look at where Five Below Inc. (NASDAQ:FIVE) stands against other Thursday’s worst performers.

Wall Street’s three major indices suffered a bloodbath on Thursday as investors continued to digest news of President Donald Trump’s tariff rollout on imports.

The tech-heavy Nasdaq fell the heaviest, down by nearly 6 percent. The S&P 500 dropped by 4.84 percent and the Dow Jones was down by 3.98 percent.

Ten individual stocks, predominantly under the retail sector, mirrored a broader market pessimism, finishing the day in the negative territory as investors sold off positions to mitigate risks.

In this article, we named Thursday’s worst performers and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2-billion market capitalization and $5 million in trading volume.

A family happily shopping for everyday items in a specialty retail store.

Five Below Inc. (NASDAQ:FIVE)

Five Below fell back to the $50 level on Thursday, shedding 27.81 percent to close at $58.83 apiece as investors disposed of its stocks following news that it recalled one of its products over fire hazards.

According to the US Consumer Product Safety Commission, FIVE recalled some 29,000 units of its Room2Room LED Iridescent Bear Lights due to the risk of overheating and melting on its USB cord, which could lead to fire and burn hazards.

The firm has received 28 reports of its USB cord overheating and melting, while six said they burned their fingers, and two reported property damage on walls and headboards.

The bear lights were sold online and at Five Below at $12 apiece in locations throughout the US from September 2024 to February 2025.

Prior to President Donald Trump’s return to the White House, an analyst warned last year that FIVE, Best Buy, and Wayfair would be especially at risk from the tariffs, which could result in a plunge in earnings performance.

Overall, FIVE ranks 3rd on our list of Thursday’s worst performers. While we acknowledge the potential of FIVE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than FIVE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.