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- Five Below's sales were hurt due to overstock of Squishmallows and price-sensitive customers.
- Inflation has made customers prioritize food and drink items, said Five Below CEO.
- Low-cost retailers say they're seeing a slowdown in discretionary spending.
Five Below said its sales were hurt this quarter because it bought far more Squishmallows than its customers wanted.
The popular soft toys went viral in the years after their 2017 launch, becoming "Gen Z's Beanie Babies," Business Insider reported in 2020.