Five Below (FIVE)

Christiane Pelz VP of Investor Relations
Joel Anderson President and Chief Executive Officer
Ken Bull Chief Financial Officer and Treasurer
Matthew Boss JP Morgan
Simeon Gutman Morgan Stanley
David Buckley Bank of America
John Heinbockel Guggenheim
Chuck Grom Gordon Haskett
Karen Short Barclays
Judah Frommer Credit Suisse
Paul Lejuez Citi Research
Chandni Luthra Goldman Sachs
Michael Lasser UBS
Edward Kelly Wells Fargo
Paul Trussell Deutsche Bank
Brian Nagel Oppenheimer
Jeremy Hamblin Craig-Hallum
Michael Montani Evercore ISI
Joe Feldman Telsey Advisory Group
Beth Reed RBC Capital Markets
Call transcript
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Good day, and welcome to the Five Below First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode [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. Please go ahead.

Christiane Pelz

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

the of at not you may our one by do If page I the a fivebelow.com. Web will over obtain have of press you Relations turn to Investor Joel. call visiting site release, today’s copy now

Joel Anderson

you, Thank everyone for us earnings joining first for quarter our call. and Christiane, thanks

proactively racism of I we started, company, get saddened how simply deeply as of by not weeks. the to the events do solution. tolerate share I I the to a part want want past Before be am a We, and

in other learn We last Floyd George Houston, all of victims racial Fayetteville XXXX, in we that. did and honor taking and stores in in Tom are last Thursday closed Minneapolis Today, in discrimination, time of do founded community. to store Five as Below have the we how and Saturday. we our just and of can we listen Since a David the day, been

of we with and swiftly COVID-XX, the we unprecedented crew mind. this began wellbeing period, and done so During customers of and top have safety adapted which our with

outlays, close as has and of With and a we that and since and reopened, key March our the As mind, health centers crew Number consistent and has period with sheet retain reopen, and Number we CDC I've of demonstrated our the pandemic. nothing And the challenges teams by across flexibility we we funds by by but its In difficult taken stores, our back last our call, our credit, line quickly strength. sanitation remains and increasing there We further generating what growth strip Number five to had as short in strict well been bolster environment, financial our amazed safety define question, on of at health safety. priority. has and protocols been order closed-store we I two, been our one Without in we themes with three, to a are and financial itself earnings place always entire characteristic XXth actions. the at and of all QX operate. costs strong we how to look do one, customers guidance navigated discipline presented some business moved this this. offices. chain-wide and we implemented resilience a liquidity. organization cash. and debt-free other entered make health as have capital this as while reopened, and as we the that decisions balance number address the adaptability. flexibility We our necessary to the and

people four, team. for important day that especially commitment value, embody is lead is to promise is inherently to day Number our flex growth. agile value committed who Our this and this product rapidly and enable agility. its and are could five, I be than to but delivering more worlds to We we it value DNA. know in customers, and to historical value business ever unwavering at with position to amazing our our in response the wild ability incredible more proud to model delivering core today and how of out. customers not seven to trends Number

swiftly Even environment, supply significant for made on the to current Five growth to that as Below. support chain we focused lies navigate product we our the move experience, simultaneously and key progress strategies ahead on

a While ourselves time we had growing in offense to playing back again. quickly play got defense we and period for of to position QX, for

of wave as sit we Speaking we eighth stores. are our growth, here reopening today, of

several to reopening share smooth initial enable to that with XXst, me Let of help we what our we on including wave managers reopening to retaining stores, this our our Prior spent a process. weeks April preparing began store did process.

was alternative state which available During an service at with period, allowed the curbside developed local were we stores pickup, by and closure also mandates.

channel, We also to Above high operated to customers listened the our limited capabilities all, the curbside our up and crew however, during resources enhanced time. we ramped our we reallocating and meet ecommerce demand ecommerce as our this operations. with

quarter speed, between stores. terms sales XX% of of for for Hill business, have with stores, process amazing channels. seeing our of approximately As reopened today, we are the and our seamlessly are we reopened two what pleased are the operation in sales including date, reopening we George X% comp approximately with ecommerce to with and second executed this his up split contributions our tracking Comparable performance. about evenly team

performance our in the bank early very dollars likely began some by accounts there's by level and being is pent-up we're is of mid-April, While stores current encouraged stimulus in enthusiasm performance. acknowledgment the reflected of demand also have as tempered our significant that hit to strong reopened,

sales store last we've impacted disruption addition, to weeks. the that related two In the protests some experienced during

still are plans look we contingency a the pandemic possible have for Given and year of coming XXXX. uncertainty into around and scenarios place of each the the we remainder the as for in impact this to of range substantial in the preparing months,

share for per of loss the first to important back Easter included the were season, year turning which Now the the XX% with total of quarter, $X.XX. down half had all stores selling over closed our last quarter second we of most of sales and all a

a prior to pleased increase we business tracking previously, the As mentioned were to on announcement comp pandemic we XXth. very have was March X.X that the

During and Cincinnati business the Pedricktown was very fulfilled our of acquired out Hollar.com. the closure period, of daily with record newly sales, we ecommerce strong which operations

very pleased to grow level digit still stores this times were sales growth We ecomm in overall quarter, over to last remain range moderated X have sales of first reopened. penetration year’s we the relation single expect as see ecommerce has our for XXXX. our While to low in versus

cut impacted impact our outlays closed to addition, on limit help several financial to we discuss extraordinarily mitigate a and cash in will stores, in these the more liquidity, We extend all In to as want and of leaning decisions we this by time. the maintaining actions difficult detail focused flexibility made those as moment. to difficult during Ken our costs in health, of appreciation

delayed DC in second quarter open Midwest were including building track Texas The in Midwest and the environment, to of Regarding distribution to for given late XXXX. with to capital now the and the it expect remains centers and open of our open our expenditures, We our begin XXXX. West plans. XXXX, DC projects in on openings to our the in opening Texas new several store DC second the of the expectations half

XXX compares over to previous stores relates growth This we expect open communicated, XX% XXXX. XX% in plans, representing to now store our it for our plan have As XXX, as we to openings. to approximately store XXXX, XXX

hope for plus growth United see a store store a more Below return We and experience trajectory, and XXXX. wild always fun growth in store potential and for beyond. to significant we most our remain opportunity, the Five in a hunt States. stores X,XXX clean stood new to value bright, opening treasure factor and to program normalized New continue tweens, a has with incredible and teens

space the, new their quickly bath such our with know everyday to essential founders sanitizers of With items, customers referred even as will ever respect such to is Our enhance as offering have and wipes, tougher assortment. hand times, to kitchen children. and added which This home we We've commitment masks say resonate essentials, of personal and allocated more as items, new we for healthcare to to Store”, pivoted believe that product value focus customers stronger to originally looking of than to “Yes merchandise, the existing And us merchandise, care this consumables our because to including yes parents as goods, today. are allows well more and we today. our in our our and and alike. as economic affordability

sourced new We tech help some also to work-from-home. customers items great

and pleased fitness continue are to items, be to customers snacks many of add toys, by lives some aspect We there and their as for at fun tees, fun provide home. exercise to cool our continuing to

advantage the to well customers. value home-related we market are we and planned create QX and the Overall, at amazing major the home summer, marketing items the pool since of new continue the fun have are canceled in Flyer. games our inflatables decor our airing and buys were stores products taking opportunity For source of to opportunities several for our for more of we commercial, On distribution as brands. closed, product as for across Easter adding TV

the digital us our target digital very using advertising TV we or and of turned level off code on focus rather to on The can at QX, zip advertising substantially For allows circulars. to be are and benefit store it shifting than quickly. print flexibility localization program far is data, it more and

Start week, our at accounts the we customers the beyond. officially of safety ideas and for Our our, stores. #homewithfivebelow, home campaign, and 'Kick activities with offering fun, on the Fun been focused value, Again!' shelter social media trending This during launch will have period assortment

supply to on we center on And channels. of value and store, product, experience, of the our the we customers stores retain and safety of element all surge our in the and this we top our of three existing them team the and customers are the we members family and fun with keeping items both members we Five amazing customers shopping and exciting are working new, Strategically, experience, located our discussed, selection adding our most chain. we’ll sales limited new experience with On priority. as working those navigating strategies areas, team feature drive We're new focused a room will are time. an also our priced our fresh while Within tech items making. unprecedented worlds to for In product needs Beyond. decision marketing digital zone. during ecommerce, focused of along to remodels the traffic and I remain times and called is $X still be addition, which of the and and essential why to across in remain health are the and at These back worlds. customers, in with create current customers with The hard above provide on

to agility worlds in make quick Below we the have flexibility it's Five consistently XX to unique wow and over and with the model, departments, our of relevant customers. inherent With stay eight deliver organizational changes the to assortment and value that order ability span incredible

addition I front, support working to openings. initiatives on future strategic mentioned that chain on our In already were the we our distribution several growth. center supply

stronger, of the summer. successfully strategic Once emerging thank term app, which success. not focused all to with and important integration times drive want is managing as teams are in business summary, will focused while And position, throughout site the if these our Another reserves. during their our business well a sales for growth the in integration URL, long the on from our commitment substantial become healthy initiative our on simultaneously offense. once cash model, time. pandemic with this be Hollar.com resilient strong, an on robust are believe automatically is debt of as growth, will position we to the fivebelow.com. I no playing competitive expected time, and this In we initiatives, which again later turbulent executing extremely complete, Hollar.com’s, we We the completed ecommerce is answered this a

to into be values more and again, With back fun Ken? to Ken store stores assortment forward our in I'll financials, delighting once it needed welcoming turn provide are environment. and safe, with smiles respite and look the and and excited to to We a incredible some our that, on over surprising details much them, delivering exciting amazing customers our

Ken Bull

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

stores of on reopening quarter small only our on of all first and XXth the the number with in reminder, a key Easter XXst. period, beginning March closed through selling stores April a were late As

last versus While it strong sales were sales in year's higher digit over low with a QX percentage our of ecomm of single times total still quarter, first sales. X represents

cash. we order addition, could cut In quickly as costs as we to in conserve

center distribution furlough to store One was took majority and of the of our we associates. early the actions

Our offset of help Wowtown temporary pay field team and leadership also sales. impact cut took to loss the

working delaying orders our canceling by managed and capital payments. vendor merchandise we Additionally,

capital for for We also XXXX. reduced plan expenditures growth our

now stores liquidity position on real we believe of opportunities. majority from engagement solid associate a to inventory, the all With are we reopened, in future fronts estate and

XXth, Our the of XXXX. of We $XXX.X increase by of loss were due XXX sales new XX closures quarter temporary the XX.X% XX.X% comp We stores new to quarter stores XX first an only a to the date first of of from the XX% for million, COVID-XX contribution the the XXXX. XX.X%, QX first days, net period. million stores of quarter sales quarter key of to XXX were quarter opened ended the March during our with stores, selling XXX quarter decreased in stores approximately the the With pandemic, reported quarter store day first up the comps XXXX compared Easter Through a X.X% reduction a $XXX.X small days of in declared of end the and offset. in versus operating the down store was in in at comparable XXXX. the opened positive ecommerce with or

by our Turning and with fixed, goods followed expenses XX% buying are cost sold teams. certain approximately to occupancy being related fixed largest costs profit, to our gross operating the the distribution of center of component,

and closures first to deleverage our and for by gross profit costs, compared our from on store the XXXX to XX.X% the decreased the $XX.X approximately impact SG&A XX%. XX.X% SG&A decreased Given growth first $XX.X as at margin of as it first for last sales XXXX the fixed million well our first plans of of the quarter last million million year. original expense quarter in had gross $XXX quarter the results, approximately of over of quarter finished X% year's versus associated

last of increased year. XX.X% to a sales, SG&A As percent XX.X% from

fixed to the quarter, closed expenses. executive reducing the salary deleverage furloughing delaying we SG&A drove took quickly marketing temporarily costs The leadership expenses, actions environment, of store began spend, overall in portion reduce moved in we the hiring. increases associates, which annual compensation significant a the Although, sales in later store decline reduce and to included reducing and of hourly

previously In these certain to recorded addition to actions, incentive related expenses we reversed compensation. stock-based

As million Due the benefit loss we in recorded of quarter. operating $XX.X first reported the the quarter a of loss, was million operating XXXX. million in an result, $XX.X of tax versus operating to first income of a $XX.X

tax to $X.XX, allows to pre-tax of ended $XX.X diluted to effective to I effective tax year the quarter per earnings $XXX accounting Act, We We approximately tax be year's this effective the this first quarter to million loss XX%. includes $XX.X for compared per CARES net of of had XXXX. with first first rate for last share $X.XX of was quarter primarily based approximately $XX.X diluted described. Our for also of XX.X% $XXX first since the million Average store quarter driven quarter receipt We and million ports income the the The due XXXX, XXXX income of the Easter tax pre-tax $XXX year. versus prior XXXX accounting cost a during quarter March just by cost million share timing generated canceling investments including the quarter Inventory on closures, of overseas closed, XXXX of compared of inventory fiscal was direct income tax for for at store in stores year. to Last equivalents of benefit share specifically first XXX,XXX approximately first left the Loss a applied for purposes net on repurchase a on of a we was million be impact rates for income first $X.XX of million excess year's first cash, loss year. authorization that first delaying inventory our a $XX.X $X.XX to the rates last factors once Net the to which loss to compared and of $XXX XXX,XXX taxable in Due compared the our total expect XXXX, expected closures. was currently of year, last XXXX. tax of X.X% million XX.X% quarter stores million quarter as closure managed under million repurchased To-date We shares down of and our per the of our million merchandise credit. repurchased was at $XX.X marked outstanding shares our approximately certain in the $XX.X basis of to on line approximately the increased the a the last at the Candy. have end our including store of at debt, approved merchandise, the carefully imports nothing primarily orders, seasonal no $XXX of and first cash temporary quarter. versus our end we the orders. million. of rate

In open-to-buy plan allowed with our opportunities. very believe year-over-year inventory and position be a of compelling and plans normalized QX and liquidity our more capacity range. in for We in our have levels, a for expect our are growth purchase the in end at addition, we tightened product good to we

are we each one. looking but continued confident of our due we not are providing have to forecasted in for the Now, prepared and ability guidance scenarios, to a successfully uncertainty, ahead, variety and are we navigate

pleased response contributing offset are we trips. seeing comp currently increase. reopened. at as customers are higher we the to level the to up average this about ecommerce with reopened expect As Joel to-date, customer lower stores as we for transactions do ecommerce with of X% ecommerce perform mentioned, continue for half consolidating approximately and reopened. are stores, sales partially stores tickets, not tracking our very the are the Comparable by believe quarter second In stores We as

there be are including and continue While to influencing demand, these pent-up we'll tailwinds to government the in stores. real and reopening performance the stimulus encouraged results. may by temporary program phase results, early On monitor we this estate potential and carefully

continuing planning X,XXX in growth new stores XX%. and XXX XXXX, to We unit net growth are we the X,XXX are XX% to of or to open program with to to stores XXX our end expecting year

bringing states these new of new be the and XX. the existing the While in Colorado are in to number quarter, we later being of opened Nevada entering majority will new markets operate Sacramento this like and of markets, states that we stores

XXXX we will the a in open growth we to to rate express approximately be bring. This investments innovation, $XXX to us hope questions. operated. to the we and to operating financial the Our be in presented current challenges worst standpoint in the the the have serve may $XXX entire in would to far stores what new and West return the call planned and teens, we some the infrastructure. will cost weeks to gratitude model excludes a plans challenges high inherent by disciplined to With centers, for rising compared total to and shifting operator XXXX like expect whatever remodels will systems and as to lines prepared million we we Operator? great distribution qualities for opportunities. and and and the new the seeing conclusion, million. And CapEx, reflects We what extremely react to Joel well months an turn with with I team allowances, through of and of are to better Agility, maneuvered over unit and operational flexibility are to In up the environment. our investments which for remaining that, continue want Texas reiterate the always our tenant as pre-COVID-XX management, spend how navigate capital and back these now and plan disruption, along from are as for through our I gross respect to positioned for are And estimate pandemic.


Thank you.

from question-and-answer question now the comes with ahead. will the Boss Matthew And begin go Please Morgan. [Operator We session instructions]. JP first

Matthew Boss

out a reopening the maybe initial Joel, potential you talked across just single mortar and bankruptcies high level. the crisis to the fairly digits the maybe stronger stores, think maybe do as post Where since brick relative consolidation we're since of just your retail? any strength exits to higher and worlds? competitively. laterally we consistent Have trend first that start comps you you and on seeing call opportunity areas about about see seen positive reopening, third, across And

Joel Anderson

that of sort where there, part Matt, consolidation… that Say last do see we

Matthew Boss

out take come model of a to share? market opportunities stronger as Just this and

Joel Anderson

It what think of change, state-by-state open I our is would is opening the eighth prepared I Matt, middle what tell in remarks, Actually we were regulations in said wave I means and this we we as to consistent and that of you my ramp pretty in the kind across opening of regardless consistent which of every we're a saw geographies. a part new took what wave week, up norm of about country. almost was seeing, to

think that I part so And was throughout pretty it. consistent

finally haven't time like into totally of do here And I be lot snarky far give kind on consolidation geography surprising I fun Philly, things we kind it. returned The at being that into tie geographical of miss we being we for terms with and the in And the certainly of I tees of as we fun our more that to little there's time to we at is And well to the home then strong some value. example And of mean of appreciates Below. a to a Five as with value, value, too it's I and reopened the humans. from home. that's Below, for a we big Wowtown In things, types one great. really like makes just I said, the that is as yesterday Matt, first Five not at commentary our we're of goes, and fun businesses Obviously, working early America And back difference. always I capitalization we tees. and essentials, of categories tees as our on had I have as retailers this go a with ‘XX there's and then, relevant. as many saying of think I a that get customer going some came tweaked with that's opportunity us into markets really going in out before. opportunities piece get become think a assortment But I’d think and to think think as that clearly on really every customer able and been I of value. another back ‘XX course, ‘XX out and our finish just we resonated just relevant of more trend, That to demand


will with question Simeon be Please next go The from Gutman Morgan ahead. Stanley.

Simeon Gutman

is EBIT margin. question My on

it. last ended at realizing You underneath what still around year know, just and it's XX% Knowing fresh we raw.

operating store higher. bit assume, Your are a costs, I little

done. you little or exposure rate. all online going these Your any And to how or know to digit what don't a I back teens, is But that to know the or when store you can store to run productivity? impediments if you back XX% EBIT up as prior high level talk mentioned now growth normal a you're knowing if double higher you're of you could assuming bit back I level permanently, about get the get maybe get could prevent this same

Ken Bull

significant to percentage. meaningful the in on operating teen year do see this events, days But we have see we when into meaningful do But loss some you coming kind say expect of and that, you see of as guidance grow to the growth uncertainty that don't we have comps we back based us. of Again, where the we that and operating little from would in for bit obviously de-leverage mention, to provide we XXXX, expect the of know, on margin high look And years to of slight like the point, XXXX, that you're, out sales move unusual off improvement unit top a here your range, able given significant leverage investments in if reduced the ourselves really did even XXXX. line we that an first going weren't and ahead continuing we in from future things X% do half to year, the the you're to as perspective. ‘XX on


with come The David go Bank Buckley Please next question America. from ahead. will of

David Buckley

that environment, what those current opportunity location just value on you. customers, new color an increased doing then can focus share? there's you're Can the likely consumers? economic just given you you And Thank the on talk attract Given about recovery offerings. to by to more any attract store

Joel Anderson

we're rapidly. And probably of biggest seeing our really we're customers We're keep zero more back in we our still into marketing. having obviously, we've that, us that of is go that's customers. or already it marketing really benefit that great way in my was our markets to change very going focus on seen you've small ecommerce seeing of was that to the single clearly, QX, is gives really for the I saw business. codes, take The piece that us you new prepared advantage remarks, area ecommerce. biggest with a to terms Well, talking attract But as QX. shift said a our about from it plans come The if continue accelerated biggest flexibility shift to in to print digital no on and in where as zip of QX and

customers than out that's watching their and As come are ever, pocket very relates there, value there. pivoted reason it more the to biggest book we we strong across when

Ken Bull

second part around think your the location… the then, by David, of store I question And recovery

Joel Anderson

about you reopening… protests stores talking relates it just David, to or are the as

David Buckley

more just any... suburban, just semi-rural, reopening urban, No,

Joel Anderson

tend those we've to Matt, by to states. by waves be waves, been saying opening was I Like

of consistent it material but not difference really of But customers takes store, by up states about well suburban are a a stores, that full reopened, and by really them seeing, as Our we're geography. as as well thing urban, to ramp any we're as rural difference not type we've different. both not material week as seeing the discover much seeing only

two that XX% open country here here the in and weeks, now of we remaining Tristate much Jersey. we've stores is next got different. New largely within have the line big, open, pretty surprising the not much reopening sight Now, those the the in expect don't But on New entire we York, areas,

excited hearing fact, us from just feedback They're customers. great, to open. just In we're great have

every parents they're us store Some of home, to precedent help looking have got solutions fun and provide a them kind their for kids environment.

So, of we're seeing great results type. regardless


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

John Heinbockel

so learnings of couple things, guys, curbside Hey far. from

Your direct be holiday and being What when operational by distancing you do to it’d still get curbside think changes, maybe to omni-channel, holiday then ability into social you whether changes that? a need and or do and accelerate in to December into plays place. you how home digital

Joel Anderson

is how from think capabilities going learnings fast any curbside showed have we just pressed. BOPUS the can I didn't we this. into when Obviously, really it really real move Look, us

our But together really quickly hand team, So, they customer. to the offer resonated pretty the and curbside it was with it it scrappy. put

keep the in the happened. before John, made pandemic back acquisition mind, assets this even of Now, Hollar we

to little we a that we had infrastructure get the effort than and now into bit So, with knew we space have putting in, we more store had ecommerce been omni-channel stabilized. our

about Web seeing during to distribution at to planned. plus so, learning just it's originally we will And product, capabilities stores, now on time instead carry. the with allow we two of going than resources only one. combined site up We're accelerate. really customers which the accelerating our they're looking we the essentials centers our new is quicker spending We've picking benefit pandemic Hollar, And, of BOPUS us now the and what the learned got of

quick we as together and can, John. two going So, we're the all as tie


question Instructions]. [Operator Haskett. go Chuck The Grom Gordon ahead. Please from with comes next

Chuck Grom

to regards and to that the is My grow overseas the product. question ability product secure with to

and and been So, I'm that and the much trends I to curious guess to go XXXX? year overseas, of half secure items, able bodes the back how Michael's how relevant identify

Joel Anderson

was I Heinbockel problem. the that India Chuck, as afforded our we And moved very, worked digital whole kind and there over Zooms a second hasn't and here go teams been very that reacted of and vis-a-vis same would some been kind staff applies I talking have the technology we’re very this and countries you Wowtown. well. buying ways hasn't And Just tell other able and with ago John to period, us capabilities Asia to teams to connected that kept Michael there think in. of I has about time really our the working a to and during physically while of corporate of And on the quick really for networks

XXX getting to period really pivoting down out the to buyers shut nimble job clearly there some to and things done a the Michael has being stores react to degrees all starting But talking obviously add, playing have of and now we're prepared closeout closed. virtually. good great in feels and the merchants, the the But flow my going and like play we all to we're engine week to it doing it to back remarks, six And up from, offense think you're some great just going back opportunities a see had into if past, starting good, why go the we'll the and and about products advantage defense we're sales. to you back be there stores and well. I as again, back to feeling we spent time I those be shifting take for there's and it’s really


Short with Please ahead. comes Barclays. from Karen next go The question

Karen Short

of still the terms to and/or date. kind you to fall is, picture, percent terms an think back are outs more pivoting that. question of reopening stores, about on and on my make that picture they're X% of a stores, close just But opportunistic to of the eight mix, in to to buys. school you that talked just sales on how that the bigger how of focus? clarification into in sales exit about that you're clarify But Wondering have at in going One rate of bigger then of I terms waves. quarter I know want the

Joel Anderson

consistent short scenarios. old. we possible it's But don't yes, you on all hand, reason to, Karen, are to faith two only seeing mean really But those is, or be Yes, look, so the a said we an because of those waves answer this comp sales. remember, to always you lot trying I of the on a got a waves very not of focus just all trend are quarter. transparent some as many of kind want of with there's week mean there. the of I part it's just and put not Year-to-date and one you can't I is and giving outlook we're unusual And

you're I speculate history it's its So, unprecedented, here. don't something really a on have asking to me right? I just,

certainly you side, the plus and the pent-up stimulus. to got got you On

On of the weeks with protests. a the two lot been has negative last side, there the distractions

to really driven. of of product. close by is think to close kind we're it shared will a geographically, time I at got then comments, percentage So, on the And for they're I were type got fit of questions, much of the terms a goes that the again. and the what we got company business. noise there the away Michael’s in to there a as out from and value back We're a a customer. got you outs, offense got layering screen they I that it's both be, such going mean, there's of teams ago that opportunistic, great opportunistic plan just, couple in, plan to moved is other to so close in my just the We've with that to starting But as store. year. comment trying for they outs ways being the consistency long in they when play be our Five of resonate number, a we're to sales, And Beyond the the said in that with size half consistency have And I Karen.

is. we'll in And percent so it's drive value. of about plus fit that's what use minus where more It's and terms and the or in do how those, really they


ahead. with Frommer will question come from go Suisse. Credit next Please The Judah

Judah Frommer

of terms anything on the furloughed First, of in your different Is just recovery doing operations? there of some follow-up margin store opportunity a workers. to you're Obviously, you on lot here.

any kept right depressed store and that thoughts as around now in working around managers place. But forward? is less the maybe going store You to the bringing back traffic labor

Joel Anderson

Yes, great question.

decisions make think, of a I had to we through lot this.

furlough of it's and store keeping heart are quicker. they've we these to They made the think to was thing. been been stores the get and we've best And in able entire we the throughout there about managers. back part best run been, is them the our not decisions open I one soul of community each

on we run us allowing running still and hours comp, positive with less reduced that to notice, running and is are is you'll what to hours. If do

a like less labor model and and benefit is working there, the but the hours. to the hours for part, comes. opportunity that some is there ticket, but out as less certainly run with us So just turned flexible transactions traffic really and real what that a pivot going is is continue the back most But it afforded we'll it's is is shortened Once pretty up fine this engine to now, out labor seeing on we're less good. higher

Judah Frommer

estate then next just real plan year. the for And following-up on

thought of square and not teens open going for base the and kind XX% off kind that making stores of the Just footage for lower process to that high XXXX above XXXX pushing maybe growth of up back in behind didn't a XXXX year? growth

Joel Anderson

early us XXXX going to speculate great for to Judah, too there's estate. really the Yes, out real opportunities, it's number. on there for some be And

XXXX And running and the more I a the variable think XXXX left run anomaly, up yet. are, think is they're I just was not what real was year a is honestly biggest referring landlords of rate. as back in Ken to multi

speculate say the guys to you more paused But longer store what what I we're outlook driver is always our going there's be downside upside is biggest openings range it's as share the they done retailers, trying But understand a as of much So number. a give little ‘XX. don't probably turnover to XXXX to as on other as on construction, would more it still on they is remains growth. there of than we hard to


Please go from comes question Paul next Our Lejuez ahead. with Research. Citi

Paul Lejuez

week terms up. kind where of along. could since of curious two takes the seen where stores of in you actually are what number and curious the tried maybe those if are any talk we issues positive stores longest, you’ve And of if requirements? of is wave point I'm has can Thanks. any up, have actually to have in, to a you've it just ramp a And those kind ones, reached since for about one, waves a any distancing about people as to in have transactions of let moved stores adhere kind said open be you in then? that that you capacity ones the Joel, wave back stores social been the traffic of had you

Joel Anderson

the difference traffic a really the the six swallow from and and is five one this different. or between two know I wave hard to But believe. honestly, that and aren't waves perspective

we're coming What consolidation from need mean, I so, in just they're up. they're know the to obviously a seeing is we we many customers how but time They're trips. is there. and don't we're when And customer frequently, what new pick more more less in of going buying

wave wave channel ecommerce exactly that We the we're to have seen there's continue consistency But, that we're part our we on able know a up. that. Paul, of as really from who to seeing second where open to incredible customer is.

Paul Lejuez

constraints any just was you of if stores… in had part Second terms into letting people the

Joel Anderson

the job. is great but we doing job. all. less bigger done not on ran people great that of have And constraints the teams but a benefit kind baskets have think stores at I Look, are And any of helped into

they're marked. hear you've stores, all of able If guidelines kind one our we've out to all been and of the been doing in there But well.


come with The Please from Goldman go Sachs. next Chandni ahead. will Luthra question

Chandni Luthra

to this supply diversify? Thank obviously wanted to talk in years, you disruption to we’ve any changes global terms chain, supply chain, then know I you. you of the from your plans you recent about that envisioning in and tariffs. more any permanent year your Are to seen

Joel Anderson

lot of of terms get of supply many supply countries. clearly, chain, put year's in multi-phases the really to pressure a different last forced us chain Look, into that on tariff goes,

we've past. so if years sit in in anything, position been than flexible And we here much more today a

our disruption to height overall, even supply really has but through supply so, forecasting major really chain, chain the And pandemic, any the we're work. to not continued this of

we're feel spot. we so you. in good Thank And a


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

Michael Lasser

stores. you say essential buying big fidget the like other, Why been growing holiday. as low are to has for And due items. channel a the have or mentioned single you days? you of you as that the in in channel next given orders Joel, for that Do see and bands the hand you digit year-over-year of think how even that because would expect slowed silly up think you do channel, buy as to X% that I from it quarterly think half holiday to quarter-to-date the not referred penetration. that's your I coming you the it put to Is having you you’ve masks, as assortment you is to past, or part then opening few those have spinners sanitizer the loom? comp is might Would your witnessed XXX% trend XXX% ecommerce now, in imply

Joel Anderson

to penetration we're ecomm on that stores the these, have quarter, the Just for but the What is of which it has slow. is comp to the for started giving you have Michael the that you you remember, have full reopened.

only some there. are stores So, in their of

understand we then time really kind to. moderate Michael, of what holiday becomes And far into added comp I are soon lesser So, starting lesser as goes, as moderate as mix more need every ultimately and it'll it at to week don't we see piece that, that was a by so but the more too that. total. I to to want little XXX% bit on speculate stores height, get of and goes increase the over ecomm the and a But

to buying. before but scenarios As pretty has coming quick read and we're still need turn around ready a we're scenarios Michael good finalize. here come. to up be here out And we're all finish we've they XX-days to Ken a we said, we looking think going But got more I it at. several for really, longer

Michael Lasser

about just [Multiple essential the Joel, to clarify Speakers]… And

Joel Anderson

a essentials. of added lot we've Yes,

when what added assortment. than Web look And we impact. making think big trend pivots different piece they it's quick no It's It’s where a and you Michael’s into a a or the you'll customer on the it. a I man have see trend, big site, silly spinner wants. our team of


The go ahead. Edward question from with Wells is next Please Fargo. Kelly

Edward Kelly

look as then into the that's potentially cards, side. as in of it TV about ‘XX, sort a for the still can like like the in Has that changed? relates back things you especially more ask Maybe to Is we shift Joel, year, you marketing advertising. to outlook bit and I something the then period? strategy this little election into And want about holiday? the here on half post national out talk of the What's TV.

Joel Anderson

look digital. well Yes, marketing, I working for to really really as the It's explained we have us. pivoted

this the kickstart fun start campaign will Our Friday.

seeing, the is it, able I response we rates an are quickly is lot, and start, be with the national were And it it. a what do probably start Friday. the point to lot adjust like casing of time a think we're especially really to there's digital liking planning good bidding up it to were being with to memorial this for we being that right today to this year we're honestly to TV, and election year now, going the going to to going a be feel service right today didn't

seeing a to is it of so the move us trend. of were we'll and something hearing or kind be there extra more and marketing we're markets now having customers and just resonating But staying lot that really kind is right that. word do are on the into out flexibility able And gives focus either And good fun with relevant to important. need really


The Bank. Deutsche next question will go Please come from Paul Trussell with ahead.

Paul Trussell

period, of both you're second as you're buying on going as be kind as update response, above in to customer just any a in items. well that how regards Maybe your Beyond an percent as weeks then And Five of items about tech Gamers? give to well ask the that And recent mix? would us on the in Wanted for $X, as pre-COVID seeing forward? the what Nerd Street to update

Joel Anderson

much just I we've probably been data If closed. my Honestly, don't like Paul, going to given to you're been it lot not a answer, you, because how had give of a have now had we're quarter to to two more open. those of quarter, and right second We we'd the get locations have looking at open end Nerd obviously of those normal pause now. Street

we and one down. in got Paul Beyond, more same to we no there's in were the had Five majority there, those closest we And So answer. of stores the those them stores no with there's and putting

post So of have to understand I a don't and pre kind penetration. the

So the another need with to bear come but a really we Thanks one and understand more of at to come. it bit penetrations, on and back kind us difference that quarter little Paul.


The from Oppenheimer. Brian next go with ahead. is Please question Nagel

Brian Nagel

not that had and may maybe your guess particular, other I pent at the I is benefits, environment look consumers understanding products up to it's you stimulus But to mentioned a it's prepared are question in really so the initially stores a I have prove the in how amount they're been the if demand, and sustainable. But shopping things buying. of short guess dynamic you'd questions. you your time, and follow-up from comments,

in business know and Is well know that an your your of element consumers well. odd there's to suggest unsustainability something You those there anything you there trends? or

Joel Anderson

there I nothing there's baskets, mean transactions, unprecedented in to but at time, a Look, never same less to our bigger history shift. suggests shift significant that such it's odd the seen much-much we've

hand, buying see they're customer's across about the smaller basket one they're easily talking back the normal, And it's other that transactions. to coming is so on more Brian, I to And value, open on just, way. hand yes, new and the time. size need it's We you, going more you But I the is in, to going what could go honestly, to I can tell they're can say the to stay this say, excited box. us

be good So time we've are these how period great trends to been signs. seen tell of a all of time, going so whether kind long great. need everything those you has is over And just what are we and but more far to


will go from Jeremy question with ahead. Hamblin The come Craig-Hallum. next Please

Jeremy Hamblin

whether model I that the digital in whether get numbers, clearly. information been of has on wanted inactive email data additional right that some Could But during customer collect But better in more of to you able et terms some you've the or and collection, customer mobile clarification wanted customers sense to gain growth and it's cetera, changed, to what follow-up had time. that you've that engagement of just to environment is year-over-year your ability information. you've on inhibiting we're here Thanks. clarity any had? now how just of is? addresses, How this give many not a the

Joel Anderson

kind the just is so tell program, you can to majority, are so closed that they stores. channel I want and here to XX really don't into the new about to don't of last new be it We'll and early results way the is far and force Five the publicly talking and customer a majority What customers Look, small. XXX% all new take A, online the cohort being But us great. is have to overwhelming new that, as Five transactions of because differentiate XX%, we place just the Below, whether to a that's specifics and they're days the for I channel. with of online analysis And were or to number, pivot pleased But the that way than this the customers. over any new loyalty to they're tie can't to significant closer the remember, grow will that us channel. doing number those channel. but online way go too get took with can't Below to our you as we we're I


go from is Michael with question Montani next Please Evercore ahead. Our ISI.

Michael Montani

a SG&A in color just the gross kind to drop-off point from about related give percentage perspective, see open you guys would the if wanted the to up XQ, natural mark dollars on expenses be then was the And just given you could I margin again once what First that to efficiency versus SG&A I of you modeling given anticipate downs three gains? we closures? as know front, even some ratcheted off, down XX back be store more additional of percentage de-leverage in Do down quarter. for had

Ken Bull

I XX% that think the deleverage cost sold. cost lower margin for delever gross of quarter, the due small was to of the asked year-over-year, you about really market in in included portion, gross overwhelming to place there. close write took of is inventory the A costs probably six goods the margin percentage percentage, the the of downs of On

the quarter in With down components the cost in similar operating portion buying move the to really fixed into saw distribution driver deleverage. costs, occupancy, the rest key again really kind forward and a like of of year, respect first and things the a write SG&A, was QX. So deleverage center as of the at fixed that so of model overall the we we move into what we that's small

QX. in Given heard, reduction was deleverage We the that that you expect the to the you And be down and loss XXX first overall year, than XXX loss significant reduced new year you had also for margin, basis sales half as what the of estimate original estimated in to the in and to operating XXX. the at really operating on margin expect again, stores cost in significant again in range look expect would reduced, QX, less days, then that deleverage for going meaningful our I a stores. components year, operating of in that a and of then in full the obviously to we new fixed with if we roll do We forward be when portion it SG&A. is seen of

combination between for things of and goods which the sold also, I So drive meaningful and cost year then cost will of split expect that fixed deleverage be to the full those SG&A. the two


Feldman will come question Telsey Group. ahead. with Joe go next Advisory The from Please

Joe Feldman

times, to that a quarter-to-date one, at get earliest then Are or that and been to is rate at to an comps or the a should week something? two, going two wanted to forward? down waves of up, kind back still of with Just or that’s, various I single around to but a of think better or asked it starts about waves, comping for flow also the rate follow the understanding this regard trying how X% the X% say we normalize three. the like digit it's high couple wave

Joel Anderson

that as half comping rate. is the same relatively in Well, I about they're though that's remember And of that there. all comp comp said, ecommerce

stimulus to to to rest because pent takes never to We've checking, unprecedented. what's of been the speculate all honestly quarter it. so or it's feel the too And is speculate puts good on And in we try to it's happen like really now, little right a of back up think, just same. on and I time. we've is this look us just whether the the something those demand and comping really it, more But getting waves the going as don't open this want shutdown need are for going like terms like Joe, on what due stores experienced we of this I this But on long. where early


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

Beth Reed

It’s Beth Scot. Reed on for

levels. 'XX Just to curious to XQ, are how about you thinking guys just given in comp the to generate capacity plus are comps would get what in productivity XX% you'll that down be need like XQ back XXX% historical your store

volume? handle you of you. around that your to any have kind Thank stores ability the of Just thoughts about

Joel Anderson

I to back historical there’s already right, volume. positive pause the and if that's understood mean our question Well, year. when stores relative I are last the, to that's comping

reopen So they're volume. historical to as stores we back the

Ken Bull

way, mean be And it the in really in drove different And store the that full for year QX comp quarter. the chain the reduction t operating days, open would then next would negative was Beth, significant was said what I it the the assumption closures. be

obviously, average or pretty increase the basis a year. overall an first whether for quarter on you basis, daily significant much, volume weekly next in it's a So, get

Joel Anderson

stores up Look the just back stores I'll a volume concluding but us joining Remember heard challenges is flexible believe to quickly The our we're And business and and pleased the and we're open call. adjust couple also to with this nimble comments. more that is this wrap from year, today that's no there. hopefully say, includes didn't how couldn't model I you've are a have historical us decline organization. look, what thanks that last Ken very be environment. new I and able for hey, to their and new that

great much plus focus our customers. making summer. our who value, we've even thank so you to stores supports been the a and everybody. experience during this all special that's made especially if night. to many on out so And on what to them more of talking X,XXX Below still We store the a continue you didn't to dedication they've will worked and our by Value, Have I again, value, look associates and just to infrastructure throughout here Thanks build their our remiss be be a and of end unprecedented U.S. time, Five and well speaking this to amazing. Stay be saying, in distribution always store safe. support all associates the that innovate and pandemic after about. we're path forward We have and I'd And


The today's sir. has attending you, thank concluded. now for And presentation. you Thank conference

may now disconnect. You