Five Below Is Using AI to Generate Its TV Ads

Five Below CEO Winifred Park used the company's Q1 2026 earnings call in June to confirm that AI-generated content is now running in the company's connected TV advertising, a specific production deployment that sits inside a broader marketing transformation that has contributed to four consecutive quarters of double-digit comparable sales growth.

"We also deployed amazing AI content in connected TV commercials focused on seasonal moments," Park said in her prepared remarks.

In the Q&A, she elaborated on why the format matters specifically for Five Below's audience."We are doing more AI-generated content that just allows us to be fast, nimble, but also really use our imagination and touch kids and really in terms of the channels they're looking at like YouTube."

Five Below's marketing strategy has pivoted from traditional media, where production timelines are long and content is planned quarters in advance, to social and digital channels where relevance requires speed.

AI-generated content removes the production bottleneck that would otherwise prevent the company from keeping pace with the social trends it is trying to amplify.

The Marketing Transformation

The AI advertising deployment sits inside a marketing overhaul that Park described across the call as one of the foundational drivers of Five Below's Q1 performance.

The company shifted its media spend toward social and digital, rapidly expanded a customer email database, and deployed creator content and social listening capabilities to identify and amplify emerging trends, most visibly the Squishy Dumpling cultural moment that drove significant traffic in the quarter.

Transactions grew 19% in Q1, the primary driver of the 23% comparable sales increase. Double-digit growth in both new and retained customer cohorts was confirmed.

Park described brand awareness as still low relative to competitors, framing the marketing investment as early innings rather than a mature program. Park also named AI trend detection as the next frontier for the company's marketing capabilities.

"I also think there's a lot more opportunity in terms of leveraging AI and trend detection, and we're excited to keep exploring those options," she said, pointing toward a future in which AI identifies the next viral moment before Five Below's buying and marketing teams have to rely on social listening alone.

Five Below reported Q1 2026 net sales of $1.3 billion, up nearly 33%, with adjusted EPS of $2.22 up 158% and adjusted operating margin of 12%, up approximately 600 basis points year on year.

The company raised its full-year guidance to sales of $5.4 billion to $5.48 billion, implying 14% growth at the midpoint, with comparable sales growth of 6% to 8% and operating margin expansion of 170 basis points to 11.6%.