Five Below (FIVE) 6 Sep 182018 Q2 Earnings call transcript

Good day, and welcome to the Five Below Second Quarter Fiscal 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Christiane Pelz, VP of Investor Relations. ahead. go Please

Harbor Chief afternoon, for Good conference thanks joining Treasurer. President for On Chief Ken Thank Officer Financial release Below’s everyone, second do from are the that known Below’s today and uncertainties Reform and Anderson, Joel forward-looking forward-looking update statements. such Five any call results Officer; quarter and as are us of as and our statements risks today’s Bull, Safe described Five you. are and Executive pursuant XXXX of Such The call. statements After this and materially press call of remind and open and not risks statements. certain you to call management could provisions comments formal we are may Those Litigation questions. of date to made the cause in will made call we their this the made constitute Private that statements forward-looking and I amended. forward-looking both uncertainties made and unknown has Act during undertake of meaning the actual today Securities remarks, filings. the SEC need within to are and obligation financial to the results to subject differ XXXX to

of was more will turn quarters year do to our shift in his see last year, website over release our please of by fiscal page press Joel. week. this you information. now One this review remarks which one one I a release, housekeeping the shifted call fiscal for Ken XX-week the copy note, not year’s and will press Relations Investor by today’s at If have you visiting may obtain a quick fivebelow.com.

discuss joining for you, of to the Thank call. over and financials will then we the quarter I thanks quarter call and questions. review open earnings will to and the before highlights Ken for our it outlook, us for handing second everyone our Christiane,

with guidance. grew our and by pleased comps comp share stores very Earnings to our earnings, to are all performance. the XX% from strong sales continued Sales, new $XXX driven Total our and XX% second per X.X%. We of of quarter and a surpassed $X.XX. increased end results outperformed high million,

in store against tirelessly teams know, you new further achievement strength, reflected second distribution to results from our strong. The confidence I’d possible. ability and XXXX of The successful XXXX and up plan. a to entire we’re stores performance acknowledge quarter’s thank continues year together an driver moment remains quarter these make stores, incredibly all As home like our us results to our the last and be to to new our of XXXX our and both flexibility to stores who is take this work office our consistency, by Five and gives through of biggest in growth our plus Below potential our and achieve and

range the quarter, the second lists. XX summer it top-XX new a opened these of all-time grand During made stores in markets XX of across states. diverse to stores Nine opening we

a believe new markets XXXX. planned XXXX, of first our the We new opened of state. over the and entered XXX stores total we XXrd also We success for of a across the of representing half store testament of our appeal geographies is In Below. Arkansas, XX half just our Five universal to stores openings

do Our job the a traffic vibrant in great high solid level XXth them. already Two California which Glendale, us store stores. also we opened and real was at with in terrific to of we we open. California, design are shopping be and store locations planning a opening a on finding team very XX In XXXth opened teams preparing for continues our opening centers approximately construction, execute stores estate would QX, ago, while our This weeks have our to store. XX record

transaction-driven recall X.X%, second Moving delivered comp will comp, last in since the Tech, are year, broad strong with very Create, year a to performance we results. ourselves We and thrilled you we comp our and of of our this quarter going Once highest worlds led our to across public. comp again, QX Handy, challenged based on quarterly Room. comp experienced by Style

departments our talked trend-right merchants summer stores infused about We’ve of customers previously three the incredible in values Our broad with at responded. business. fresh, products our and types across trends

all second, because sales, third, embrace First, a and increase licenses like Star drive we’ve Wars, of And said, and very constitutes as brands Spinners, can of trends, Below, brand each Frozen relevancy. crazes and core and types we like and Five customer value return customers loyal and our Five amazing who for the who visit Trends our then build a terrific in customer the base. of experience new first discover base. stores make store time, awareness and Below our bring join to transactions

will almost squishy, always slime, continued as While craze this mermaid trends every relevancy in we have trend will second spa not have we or a which in quarter, the such quarter license and year.

to our existing growing Flexibility remain to attracting new as back. teams well customers the effectively different trends worlds as key on manage. and Our our capitalize coming model. improving keeping our our enable strength With diversity a focused indeed respect marketing, identify many customers, of capabilities teams trends, and large is of merchandizing to that eight on quickly scale our us small and us allows

of significant year. stores our our we ran of the both in brand repeat As in from marketing ad we traffic, a in print XX% grow, dollars approximately and covered drive media QX we circulars, engagement, continue to summer awareness our QX, mix increase last a we In and about TV successful and traditional increase covering to visits. addition markets stores, to XX% our optimize

to also test capabilities. expand and continue media campaigns We and mobile various digital social our

year-over-year. the awareness same programs pleased grow marketing measured brand we to several We effectiveness our increasing for years are continues is XX what have our in with believe of as we that overall the markets

focus to support keeping country, place of in while and expand growth and consistent at footprint people, high quarter, we a across acceleration discussed our we Last on to the systems, our the execution As infrastructure we level. right continue the implementation before POS completed announced XXXX. report these the our be be southeastern on of happy year for DC to season and that I to of both spring plans am remain initiatives this the track. also to completed in holiday having the

the On a that created to Gap Below. a and from We believe great joined fit the he and businesses Rob retail two people side, He experience. and founded we retail startups. consulting executive of entrepreneurial joined mindset also the are years of brings in scale are ability us Five for successful role to Rob has his newly Feuerman CIO. excited announce Below recently Five at senior position

to leading look function for the we us. forward As continue we grow, to Rob IT

stores XXXX. wow got of for Now, a to about QX few been merchandised to the dorm, look fashions, back room, have and back-to-school haves fantastic and as and words well season with our the locker half The as new customers.

to we and began our wow newness week, Next fall, our worlds. transition with across all

deliver continue this also While plan we and example we innovate year experience. amazing to to elevate we An event the customer for to ways and continue throughout of program XXXX. introduced the look weekend is products, in-store this

created treat instance, Gear. [fantastic] we trendiest throughout season a mom our coolest, to and We Day Mother’s recognized For event. the tweens day a with Tech and with and our summer some we [ph] Game dads teens celebrated fun with of spa

the memories moments shoppers have help provide and in-store Our purpose let associates go creating and just for these them best fun to to experiences events do and is and by that.

strength look the of Another this store be store customers. to have our The new XXXX inviting currently the for feel believe contributed and innovation ever format We the to format an to changes XXXX. created improved rollout on has our of we class example atmosphere strongest is in even opened. that’s more track fun our class of new began that we and and

dozen We store are older the now remodeling our a about on successful by building of format stores. new

perfecting and that and customer program reinvention elements expanded stores on process Below strongly the remain identification, executing also believe year. strategy store growth to trend new an base. innovation next for these key remaining remodel rollout Five our relevant focused with are before we firmly We our and With

trends. thoughts additional some add me Let about

We with that year-to-date. have several chased we relevancy have you shared trends successfully

We shared and of resulting the toy have is several are call very we with that emergence see from trend in have the product beginning strong. We dialogue we last displacement a believe vendors toy the the of expanded to Toys"R"Us. secured on had our stores we

earnings to trend begin see month this selection an will expanded QX throughout with next in a You this you call. our stores QX assess our toy we on provide will forecast for and and

you believe market, continue XXXX Toys"R"Us elevate going serve to excited the In need. destinations of summary, no come. to thus the Below for the customer This one pleased example we the experience positioned us and year and we in our in keep should are toy Five and through is to of this new longer we expect families with are While are is are that to far innovate momentum the how performance years to year. well the in we extremely remainder and searching

across over customers We draw third fourth amazing the and special quarter Below. into value with With to to to new experience unique programs We all-important and quarter. them look both are the delighting engaging marketing to to firmly on them with focused the our forward our that I’ll Ken? turn fun products that eight Ken. delivering worlds and it very at is that, our so incredible Five shopping stores

second will begin quarter with a and my then outlook good the discuss of and I Thanks, for results and Joel, third review our afternoon, our remarks full year. quarter everyone.

shift to and additional and This sales review I year quarters. resulted of this largely first which want guidance our in to I second the of results, in shift XXXX’s everyone the calendar third remind XXrd in Before reversed fiscal due and in quarters the is our fourth contemplated week. were year’s calendar

second our detail. will quarter I in Now results more review

a first at an stores or XXXX Our with to million the new sales quarter included million, for approximately stores half our year. second Sales $XXX.X sales to end the quarter which XXXX. shift, We in the calendar opened of XX.X% the of new XXX the our in planned second was opened $XXX.X increase XXXX. the We the about quarter, for in of last the Through reported opened XXX to compared of were versus the in in XX.X% XX in additional quarter stores of the quarter, XXX stores about up compared ended half XX% quarter second we've from during quarter stores, second $X of XXXX included quarter XX guidance. related million XXXX. of the second

driven comp from in transactions a decrease by in due comp average year. XXXX, X.X% anniversarying slight last second by spinner with performance Joel an class is increase stores of another increased mentioned, and to track quarter performing new strong of XXXX all sales highest our of generated class Comparable times. be the As on was very our of to quarter trend currently the which for the ticket

earnings points As last sales I of a margin start about on of the deleverage operating flat the announced difficult margin the in SG&A mentioned on reform XXX our from quarter basis last we call, tax our reinvestments and spinner comp, in expected QX year. second expected in gross comparisons the

operating points the sales stores, was SG&A sales. in second occupancy XX rate. by second This on by over reported results from XXXX higher cost leverage both year XX However, gross new increase both from $XX.X the profit increased by quarter Gross XXXX. primarily than driven last better margin and outperformance for for QX $XXX.X given and expected to QX Gross to of margin points our basis quarter XX.X% comp million increased in basis delevered the million with approximately margins approximately XX%.

tax of higher sales sales due $XX.X reinvestments XXXX Operating basis the quarter second percent than a expenses primarily quarter from X.X% approximately the points reform-related as from for mentioned income XX.X% $XX.X a SG&A of or XX.X% to in As or of in X.X% of last XXXX. year second increased the second of XX.X% quarter of increased were SG&A million to to percentage the earlier. sales million sales, of XXXX. XX

the the quarter second tax Our compared XXXX of XXXX. of effective quarter to rate second in for was XX.X% XX.X%,

as from Net end included compared quarter last income accounting million, share the for cash, at stock-based as of accounting guidance. favorably of and with $X.XX. the million which quarter in was not included to by the debt. to XX% $XXX to the in our no was was $XXX.X approximately compensation, XX.X% We diluted $X.XX guidance from rates our ended which an end and at cash per second our investments impacted second quarter second million in equivalents $XXX.X the $XX.X versus or compensation and earnings an million $XX.X million inventory Our impact was practice of is Inventory the was to year. due per share X% stock-based rate diluted calendar the of $X.XX in related quarter or XX reform tax shift. approximately increase per The primarily lower higher the to tax the second per year. increased diluted XXXX increase week import the share was direct to last of receipts of of last year second at timing quarter Average the store the end second quarter of

of As the sheet our in-transit overseas balance earlier goods direct a goods take inventory imported reminder, we on leave we ownership ports. record when as

Now, I would to guidance. turn our like to

a accounting reminder, or from our guidance impact does As include compensation any share not repurchases. stock-based

the any, results. quarterly actual if impact, our We with will report

as the be XX% stores, million of of $XXX the the third expected third to to are For November an This new assumption in XX over X, XXXX. includes ending approximately between $XXX to XX% QX compared new XXXX, stores quarter net of increase quarter XX XXXX. sales opening and million, sales

We comp to regards to primarily comp X% QX basis QX XXXX results the are a tax sales by last we over from will points our operating investments. year, With due X% QX reform-related XXXX, operating for XXXX. X.X% XXX margin a deleverage approximately QX of for versus to assuming in expect

expected margins $X.XX by future we QX points diluted margins to I we split decline income our in assets over investments that the While driven to basis reform-related per operating comp. and want on is to range or single-digit out XXX million, is QX million on fixed delever $X.XX a margin $XX.X a between tax QX basis. in point quarters, low for expected comment XXXX to not operating implied continue do and $X.X on by roughly The certain to an be deleveraging expect typically Net SG&A. in gross of evenly share to

raising of XX-week basis. to the X%. sales range For be increase we guidance year Comp XX% to the which guidance to $X,XXX the comparable for XX% in an our XXXX, a to of we to increases XXXX full $X,XXX billion year are on X.X% billion, range full over expect of a

XXX to our as We of XXX. store stores approximately stores, count XX% XXXX increase end an compared continue to expect fiscal to open to XXXX of XXX about ending with roughly

stock-based includes of approximately XX.X% rate accounting. compensation an quarterly half which the rate for We any expect of tax XX.X%, effective for impacts full normalized the a second of year, excluding tax go-forward

million compared to with outlook EPS center, infrastructure. spend $X.XX. in reflecting XXX million store spent distribution gross and Southeast to stores we basis, $X.XX and in previous increased new million XXXX $XXX.X net approximately base range the over to respect on XX% be $X.XX a With a income of to basis. Our our or projected to $XXX expected $X.XX on growth in XX% expected plan expenditures of over of approximately is of growth be our CapEx, corporate the to new existing Diluted XX-week a has XX-week remainder the on XX% in outlook is XX% to range our now to to to or $XXX.X XXXX EPS be to XXXX, of total

have details Joel, guidance, refer our earnings products turn words the from implemented press Chinese goods lastly, all our retail and not a impact please like to are to few results. to other industry. to it I related I’d our expected $XX China say and over to our proposed already impact on before current on across tariffs about are results a And The the or which tariffs to far release. have to business a of billion expected reaching material For

additional impact XXXX. a we additional $XXX fiscal on implementation the While to uncertainty material in around expect there tariffs, do not of billion these is have tariffs still an

the options and products, to tariffs mitigate changing with We closely potential pricing have our of these including vendor partners been sourcing. on impact working

is that excluded. the be Additionally, certain in included there proposed products possibility currently the tariffs may

before help will up provide closing turn and mitigate it questions. we And comments Joel? call monitor developments to would impact. closely Joel with some to like over We to to open that, continue pursue I any back the opportunities for to

had our half great performance, the We season. from highest see are We’ve products of line-up first as the with profitability our across ready a half terrific store levels with can new holiday the executing believe based a Ken. for results, business. are and we The comp broad at metrics. you for Thanks, teams strength second

proud deliver keeps the products, scale deep We differentiates leverage offer a amazing family. Below. at to with will I relationships customers, it unique Five share so want that and better to customers our with our that products what today. part call go is will amazing customers. are to again. It have to excited the more this come to the help I to is before, is time innovate have exceptional can so to in continue newness working who so Below for is Operator? edited Below but of on that, to you be combined and reinvest Five thank Five and for mission team our our I to value, store and said hard have believe they know of life vendor growing to to back firmly We back. It experience again, are I say even With the value make entire Below and assortment operator a retailer our Once brand Five our the I let turn results wow we an questions. truly fun. to

go Our question with from Instructions] comes first Kelly ahead. Edward Fargo. Please [Operator Wells

younger guys, in acceleration of acceleration underlying I is brand about comp question a some half the that continuing momentum of I ask have three conservatism? a to we we about obviously you the year quarter, macro of imply How mentioned gain particularly the QX. part good and strong, the think stack is start, And things how other the to you and attribute year very deceleration consumer guidance the and underlying business numbers pretty or Joel, do holiday back guess? around consumer. remarkable you I your to wondering you ask is, about like basis. the the around a you seems but versus that the period? you And am just I feeling and a on The much then, two momentum could want toys Hi, generally quarter. in to fourth afternoon, as this nice the are to wanted for second outlook about

appreciate Ed. comments Thanks, the and thoughts. I

to would to spinners It’s that lapped year. doing in are we just allude hard comp is shared so acceleration relevant. what with would what lead five that to I last really we really relates you Ed, internally. as comp, began is that QX honestly, shared teams doing chasing versus are to for estimate drove you. tell with us what we that is macro it merchandize into see that, can trends business obviously I our to it’s different as And guidance keeping the great QX As you and much we you a But worlds by that, the the believe the from how and continued now of job

say what in half are a off times, our said the really our center. believe living business. I many about of is feel momentum overall, strong, is we traffic that’s vibrant and So, to doing is would half we we drive sector retail and traffic the self-generated while great We’ve

strong it. now. driving right lost probably we the not it’s But are that retail of So, us majority is on

Having a a early a outlook Toys"R"Us, us QX, to our emerging this speculating be really the as is soft on QX. with really It's stores. that for too guidance on you comments As toys. shared the time some on really and business our been QX. I long toy toys in in summer is trend time, on for for

Thanks, really original here, the So guidance. we’ll back QX guidance and as guidance get happening the QX with then what’s assess implied is well in QX Ed. what's trends results, call other we our on with trend, our for update QX our when as as our our we through get toy

Thank you. helpful. Very

Yes, I appreciate it.

Your Matthew JPMorgan. comes from Boss go with next question Please ahead.

a on quarter. nice Congrats Great.

you do I Matt. for What can today? Thanks,

your On guys that – tailwinds at you relatively flat just headwinds the margin forecast the the the margin best beginning gross was back I update and about think side, guess embedded half? year that to in gross to the versus of any gave how

our year. Yes, at Matt, you beginning guidance as provided we the the of remember,

key actually tax in in this the the which reinvestments of where are are One investments elements was SG&A. at year down our

the you relatively then But in and expect overall to we against as are being and and again, gets in did California to we So we that’s margin end some implied pretty the have you some flat beats then saw, is QX operating year move lever overall. guiding year. significant to gross driving some and this around year. we for and we overall you margin remember much between leverage, had leverage last the if evenly not really the kind full QX, gross what we entry we split I comp quarter year deleverage forward, had some out the a pretty that able comps QX. didn’t margin regards that in where QX to in And to With that’s SG&A. flat that of margin again, QX I of that delever for you X.X margin, up then mentioned incentive this And that were think operating gross

Great.

Thanks, Matt.

Thanks.

Heinbockel Your John from go next Guggenheim ahead. Please with comes question Securities.

John. Hey,

to into the – Joel, dig I hey, Hey, dig I how toy to a bit. wanted opportunity are wanted you? little

a marketing changing from, shoppers? hundred Toys"R"Us pick space holiday have does of how idea the displays permanent? whether come temporary number that's up two, lastly, So or a one? might permanent you items? just going be, do guess couple yet is you the to it’s extensive think if do right, to it's you right, that’s try how this be think And Where Number assortment, more that about an addition I

like we remarks. opportunity question, our trend. it why great we think other and John of prepared yes, to in any it’s just Honestly, toy We think alluded the of

displacement of are new Toys"R"Us. there to for this resources. out while trend And there so, customers It’s largely the emerged toy – looking due certainly

There so space lot there in worlds. value leaning is this permanent. in think the flexibility with brand the out a to as space eight of before. think And we’ve retailers we be is toy been going I we the And the looking this is and of largely of – always on have this

to it’s I You fourth quarter largely quarter be and think fourth will while, a so, play something weighted know it’s it’s year-over-year. that heavily permanent

I customers new for are in are criteria to for think the So, as retailers, looking going we it. be selection

the as constantly far from, our space. shifting comes we’re As where space

will QX We’ve see call. what get what the we time. be the tell will businesses permanent be largely guidance I’d John, the – this same fourth we the this fall it’s past. little got That this You will to worth early happens to tweak triangulate in a long have what our which at and it year come last are it been worth but more And able on overall, on in on But time, or answer we’ll in us it’s out year. space the question? of we us us will think and marketing over focus to earnings QX give I’ve speculate to for fall here, license our of softer your quarter. too to to it’s when watch in our we to we toys you from as it year you a that than that,

Yes. Yes. you. Thank

thanks, Hey, sport. the John. Appreciate

with go Bank. Trussell Paul Please Deutsche question ahead. comes next from Your

give I’ll well. congratulations, my afternoon. Good as

months XQ drove if about that your led XQ the to as well you as in the results you could guidance? prior there summer versus the speak and the categories wanted how outperformance to on products and particular that on if comps any that, of through has the approach is strong expectations cadence Just season, versus and back-to-school, years your that or comp ask

right thanks. really I strong Paul, all based different Largely, out worlds five outperformance. it health and the called now. worlds our was is of Yes, broad really very

trend continued when people emerge done expect – the As the that spinner go, usually and our you the surveys through last would were since trend, Swishy peak The we getting Many improve. trends get a through obviously, far got department, several this of the of new don’t then. to for trend customers. asked trends, we in as Slime affectionately see marketing for QX craze. as attracted spinner that and through given did QX just Spa, with lot continue. of bring and our those quarter, we tell guidance into we We’ve and spinner a known but here year we’ve we had the just cadence we you or comps one in all new customers as the we several S through to of

around So see many but our strong you come guidance. as Michael into that year driven QX and continue continue by largely spinners, you from merchants to have can trends here chased we other the of momentum horn will a later and Paul, the the the the also have and that

Thanks.

focused Paul, you asked that’s needs-based traditional dorm-related really and about and the year who products on This yes, we are. Oh, than back-to-school. we more product

really treasure We responded are hunt kids new we customers to are brought Thanks, that assortment we’ve for store, a trend a and Paul. the in. nicely

Grom Chuck comes Gordon ahead. go Haskett. question with next Please from Your

Hey, quarter. guys. Great thanks

question, the it a prepared spoke on awareness brand you Just to remarks. in your

have based could be? us lot. that you with could think touched Just the want you share that study? to a remodel, XXXX, where if could are you you just think and Thanks to prepared on lift you then, looking what on you potential about you your on again, the thought statistic target remarks And ahead your number

Chuck. thanks, Yes,

went the brand that’s over number specific one, to it first high is the XXs XXand the On awareness, up year. from last

– a or year-over-year about it three little up over from ago. So years mid-XXs to continues grow

remind they as into to far tipping – the XX. does have fix just And it So, it’s early. core long as to markets the over And on into that get to remodels not fold. too we’ve the to then, climbed from history to markets mid-XXs tenure now newer that everybody refer refers the it’s XX as go,

on half in about We to we time. kind We an QX you XXXX. to expect in official up. QX We safe program half remodel us will need But dozen up speculate need season see like we this a more we the and got Thanks, of what before about some that expanded here. holiday did to just should and are get for half QX next finishing those seeing more say, Chuck. get We year. program we are and still to remodel and in

comes question from with our And next Kras Barclays. go ahead. Please Sean

perhaps with considering Hi indicated you TV level advertising quarter? guys. it question. just a is fourth Joel, I – just you that Thanks in at small of testing And guess, year. on questions have plans did too this year? low beyond pleased ROI the this thinking for some first TV your expanding of my taking the like XX% for Are the an coverage last you're point? I I quarter about guess, you you quarter. Are secondly, in Or the advertising. third TV the quarter

thanks, Yes, Sean.

take are continue and we me to the or Let It’s is QX. day grow you for some we a the not just there now, won’t. ROI. opportunity QX considering out, to QX this percent called Right in off-quarters bigger say, time, At point what not we in the first. QX largely to think

Qs and that point from first a before the But I we think what towards national of go ways away go some adding we’ll to flip see we're you’d that. direction one three. direction we at and in from us would a time – that

pretty It’s down year. we it exact QX be As last percent. safe goes, higher to far say as will than nailed the haven’t

is markets all largely We We going at studying how in Sean. for our A of through in it number. advertising-to-sales And be really a and will on marketing and then enough look ROI growth. the last the disciplined TV higher we’ve Appreciated. ratios, ratios. to S very are team do than kind determine will year’s we QX. Thanks, many But grown that DMAs which stores DMA-by-DMA

Okay, thanks, Joel.

You bet.

question from Paul will Next with Citi. ahead. come Please Lejuez go

is on circle taking for toy Kelly Paul. I Crago just opportunity. the question. this back to Thanks Hi, to wanted for my

the of upgrades a toy across over pretty couple seen You’ve last years. assortment nice the

price $X a they seeing any to could you Are sell by typically willingness Just you there the you bit products that point? vendors would assortment? mean So, elaborate at what wouldn’t great. more on be expanded color offer for more

combination thanks, both. Yes, a It’s Kelly. of

seeing for those with sell as the and certainly – couple expansion range, XX broader toy had opportunity but the to continue I are year. that. we we largely there But be vendor getting on both it goes, the the in sees at day, products lot are we on before, to alluded every the over toys year. of see products. goods calls as we collectibles. pick real XXX to foot the But licensed as with in are in probably have on expand community space It’s us vendors closeout a opportunity, last And bigger lot and plan as we an price a last closeout regular excited opportunities solution may are we the goods a are excited to and for toy as now far opportunity, about as about business in are where and as side, the forever that. us seeing, market well closeouts We the us stores, And of also up lot of

is questions excluding that in quantify including Thank should second thanks. new half productivity you will second Could shifts also excluding and how benefit the then Ken. the back you. we question store quarter the like about just, Great, productivity my for be in housekeeping of look thinking store calendar the shift calendar the what and new year? and then And shift both

Sure. Thanks Kelly.

we XXrd for that’s back the occur half XXrd it of, get and the number probably, productivity consideration guided weeks to and of then XX%. your in – north in and for number close if a to to you the math, that probably will it for the adjustment a back of the half the you shift a above finished there will half a in the year, still then, But XXX%. store in you we kind up mid-XXs. come of probably of look QX, in applies and take will For north And going QX, you QX XXX%, you that adjust north week the of QX, if came operating both if operating And lower numbers a if XXX%. into come for XX% shift you entire did shows back the weeks, with the week you to

keep to We got Kelly. right. All moving. Thanks,

with next The question Brad go Please from comes Thomas KeyBanc ahead. Markets. Capital

Brad. Hi,

here. I little margins I tuning on for our know it’s good new afternoon hey the for models, Great are early, we any you. but everybody. hoping distribution with Yes, was fine as quarter opening. thoughts XXXX particularly Thank center

that, to there XXXX. XXXX Brad I remarks I the our still mean, level there top-line to I detail the certain closer year up that puts But – Joel on we’ll the new and is end guidance as in the takes thing will obviously Yes, later. one it certain it But, well, the prepared and of is, going distribution in a end for growth XXXX. provide our growth implies we in can did give out be talk of mentioned think that We call. coming his level for on that we and But center about years get say the to year and is and in color a get and we that’s more XXXX. until obviously but early and bottom-line. on provide of

be Thanks, Brad. great. That’d

Thanks, Ken.

Thanks.

question Lasser Michael next UBS. with from ahead comes go Please The

a Thanks for question. evening. taking Good my lot

seems have dependent – might what a the are a like trends, the look performance into thoughts what that for comp whose presumably a hot less more box you model of per productivity maybe understanding million doing given number $X So, little ultimate that. stores better and or you the or a visibility lot than while did the have any you on becoming Do becoming spinners. products anniversary because fidget bit

the like? Five and long So, look might and how how store every over frame run, productive we Below should each

give Yes. the the to know, great in probably and believe since we it consistent X.X, long million for question XXXX. concept, something rolled I way, the XXXX as through Below live broke beyond year. came stores it, tell the of around we’ve new last we in and through story it’s went but think best not first is still more public, XXXX you, now, and call, Five $X out the We to time we range bottom-line. will four and I said we Right Michael, would dodge the start think about Ken you and color we on last we the right around were just years grow a refreshed When top-line X.X. run that

prepared ultimate It is US. As reason And Michael, number of speculate decide too early is be the a we on yet we even is, million. the class say with this than up which everyone number stronger that to I the shared I going what the range open the ramp $X long remarks, little strongest really our number would is. to that in down if tamp imply could we to on stores

different would So, lot continue a it is I the at the of is and it answer get marketing individual productivity store it is our grow. is, to to you let tell now just better. ways team also What getting –

Our We stronger different way out merchants I worlds. five called quarter, of are just in trends. out identifying came a

delivering operation in the So, it’s layer really you store teams consistency. broad based and then

at loop. we it’s there XXXX Michael. is need you But to and and all feeds we when kind beyond You together is get ultimately, growth just the put Thanks, just the goals. I room of more for look that tell what would productivity

Thank very you much. Okay.

bet. You

question Please go Frommer Suisse. Next Credit ahead. comes from Judah with

margin also impactful labor it less time out on press for well easier work mentioning of days? you an given a doing? talent on not or even and One Thanks are quarter. taking the just is finding did You people the at having is kind Are release? how Below availability business in Five more lot seeing actually these call that focused the headwinds. question Is of people Congrats guys. Hi, congrats is the talking side. something There on the about. freight

didn’t largely out that to mitigate we that to growth no are that and sending scale means our message it’s call not Yes. it’s it able be By we out, due should the you that. all Why there.

aware We of it. are

teams our it. that able focused from to - it. to what are about been on Was margin? And do increase perspective. you there something to-date to are largely as ask on that distribution focused it's begin mitigate continue we The Our gross operating teams productivity,

Well, it’s freight.

freight Oh, yes. margin,

are we in – it. closely. is, trends Joel’s we just the Yes, increased Judah, but the to the of yes, it inflationary everybody have of ability mitigate scale. point, some to with freight that seeing we do as piece freight watch our But else

it’s included this about it a don’t We we’ve lot. hear stage, at impact the and obviously in guidance us year. provided be, the to a a to don’t you business So, talking material that consider it for again,

Thanks, Judah.

Thanks.

with from go Please is Sinisi question Vincent Morgan next ahead. The Stanley.

great and Thanks for a Hi guys. my on actually on for This quarter Vinnie. Kessler question is Michael taking here. congrats

So, about… to I ask wanted

Michael. Hi,

other across guys. Yes, your how markets? expansion, now. is do XX guys new country? in stores relative I California relative to? you’ve market that And California California potential Thanks you expanded of have other of your yes. awareness you those about markets wanted the view as and been Kind to Curious to now these the brand ask biggest where have expectations to now kind performing still

wave California weeks at initial is Yes, thanks. the Michael, store comp, four ago. literally went like

that early to on really it’s speculate. So,

our for We’ve in the prepared my in several store. XXth As pipeline we just got XXXX. opened I said remarks, more

in way extremely out lot the of hard on a is there. we to I jumped mean, XXXX. California We low with states are between. all in leaning awareness empty Brand

before. carry largely So, same has that backing we we California. into in – But Chicago, went strengths to seen we off of been like trend But in when we’ve didn’t into we when Texas, been it’s the went that went We went that signs are Florida. amount when we’ve to no past. we the into there

excited are it. about We

there. our and we one on And concentrating double expect that We in will Southern California. we year Central growth are largely really

and we So it’s Michael. market to continue us a grow. will Thanks, strong for

Next Capital Markets. Ciccarelli Please comes from Scot go ahead. RBC question with

Good afternoon guys. How are you?

Scot. Thanks,

talked I process know if guys it. early cost about might remodel to So the coming wondering et talk about I in I cetera. because on side, had – know in guys early side results was trying the something was on, work that to the of you you the able too you are be

specifically, could So, Thanks. you handful, for remodel do a those are costs over go the time? a where now costs having think and where done

to when only significant Well and that. on are And we teams figure little less closed early operating trying you remodels, weeks stores store the taking store a for month. an Scot. all. two a a we’ve were amazing as, don’t than complete. out close tell last they the It’s now done job I’ll question, we We Good at to have progress year, made

So, guys of not we’ll land, made am no and to for have it and and being can cost the was just do it the being will we point signaling of really And a of great less piece you it absolute to close is, now of to all put But, in to quantify period number where in a time, shorter year the going the to that to progress need we and you time than the seeing. are be. as as able stores We what get length stores. is we cost it’s what able the XXXX. significantly disruption think in where that I far and longer store, closing I ago the the a like absolute together results

Understood, thank you.

thanks, Yes, Scot.

question go And Partners. ahead. from comes Please our Patrick McKeever MKM with next

toy about square feet? the that the for are feet talking linear I of The footage, the year. XX. trying am or that thanks. you visualize Joel, little just think opportunity additional Is you a I half said, linear to back Okay, square better

Yes.

with of mean, shutdown, just maybe into you of wait to might to want $X the mess just the that to that price just but and thinking you sacred itself I point? Or so this toys is toys don’t and you has then, around what with? Toys"R"Us have the opportunity see, consider would north talk something speak presented store of putting kinds if – kind what – with then, just would wondering about and it’s And we you,

the a and and the has been Star another after to great XX there. leaning been cap feet. I lot. in. them partnerships got are Thanks, Pat. I We from clearly, here had coming with out XX We’ve done of toys, the was thank toy opportunity kind did we think vendors expanded and really dialogue we’ve year first an year Look, end whole I a destination. team in fantastic. been and It’s us one with a as at then to customers frozen out this merchandizing year They’ve our Wars. this frozen

And as great opportunity. so, see it a we

kid We are a store.

not buy to day. an Guess on to what, the diapers concentrate going the are other toys. pre-school We on got offer passed we We it. infant

lot I in So, nothing on we and spot a sweet are that kids. the got table product great that that time, chasing we keep And price to piece, in seeing anything leaning our really and going we point point are then, think But to range on on this of finally sacred. the of point. and great relationships still that change to reason Thanks, Patrick. strategy is $X have at we in and under point price there are is no at this

back like closing the session. this for conclude Anderson question remarks. would to answer our to turn Joel And over and any conference I will

seeing a you Thanks It’s a to your joining looking look and we been and great are of bringing truly forward have half of appreciate Thanks great Five today. of great support a the Below. for forward day. We stores. I all in us the everyone year XXXX. first on really to

presentation. today’s has now attending for Thank conference The concluded. you

disconnect. now You may