Why Five Below Stock Tumbled by More Than 3% Today

Youth-focused retailer Five Below (NASDAQ: FIVE) wasn't looking young and spry on Monday, at least not on the stock exchange. Although there was no direct news affecting the company, a new analysis concerning the impact of the upcoming presidential election on selected stocks dinged its share price. Five Below's market value fell by over 3% as a result, a sharper fall than the S&P 500 index's 0.2% decline.

Potential trouble with tariffs

With barely over two weeks until the U.S. presidential election, Citigroup elected to write a report on the potential impact of the vote on familiar consumer goods stocks.

In particular, the bank's analysts feel that shifts in the political landscape could lead to changes in corporate taxation, trade, and immigration that affect the sector.

Citi flagged Five Below as being particularly vulnerable to tariff increases, which have been promised by Republican presidential candidate Donald Trump. These hikes would directly affect goods made in China, and the impact would be significant. Since many of the wares sold by Five Below are made in that factory of the world, the retailer would likely be hurt by such moves.

An already vulnerable stock

Investors might be sensitive about such a take on Five Below, as the company has had some notable struggles this year. Its same-store sales, an important metric in the retail world, sagged by 4% in the first half of this year compared to the same period of 2023. It also had to cope with the sudden resignation of CEO Joel Anderson this summer.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy.