Five Below (NASDAQ: FIVE) has reported a significant decline in its Q1 2024 earnings, leading to an 11% drop in its stock price. The company missed its earnings per share (EPS) and revenue estimates, and lowered its 2024 outlook due to reduced consumer spending, particularly among lower-income demographics. Comparable sales fell by 2.3% for the quarter, driven by weakness in discretionary categories. Five Below's CEO highlighted that the low-end consumer is being severely impacted by inflation and higher mortgage rates, resulting in more cautious spending. The company also pointed to a fading TikTok trend and a disappointing Easter week as factors in the lower sales. Additionally, consumers are feeling the impact of multiple years of inflation across many key categories, leading to more deliberate spending of discretionary dollars.