Five Below (Five Below (FIVE)) shares are taking a hit in extended trading Wednesday, even though the company just delivered a solid first-quarter earnings beat. It's one of those moments where good news isn't good enough for the market.

Q1 Results: Beating Expectations

For the quarter ended May 2, Five Below reported revenue of $1.29 billion, topping the $1.22 billion analysts were looking for. Adjusted earnings came in at $2.22 per share, well above the $1.74 consensus estimate. Net sales jumped 32.5% year-over-year, with comparable sales up 22.7%. The retailer also opened 49 net new stores during the quarter, bringing its total to 1,970 locations.

CEO Winnie Park credited the company's focus on "compelling newness at amazing value" and strong store execution. "We successfully amplified social media trends and drove outsized traffic through coordinated merchandising and marketing efforts," Park said in the earnings release.

Guidance: A Raised Outlook

Looking ahead, Five Below guided for second-quarter revenue between $1.18 billion and $1.20 billion, with adjusted earnings of $1.17 to $1.29 per share. Analysts had been expecting $1.14 billion and $1.12 per share, respectively. For the full year, the company raised its revenue guidance from $5.2-$5.3 billion to $5.4-$5.48 billion, above the $5.38 billion consensus. It also lifted its adjusted earnings forecast from $7.74-$8.25 per share to $8.65-$9.05 per share, versus estimates of $8.29.

Why the Stock Is Falling

So why is Five Below stock down 6.06% in after-hours trading, sitting at $209.38? It could be a case of "buy the rumor, sell the news." The stock had rallied ahead of the report, and even a beat may not have been enough to satisfy traders looking for a blowout. Alternatively, some investors might be concerned about the second-quarter guidance, which, while above estimates, implies a slowdown from Q1's torrid pace. The company's management is discussing the quarter on an earnings call that started at 4:30 p.m. ET, so more color could emerge.

For now, Five Below's fundamentals look strong, but the market's reaction is a reminder that even good news can lead to short-term pain.