Loading...
Docoh

Five Below (FIVE)

Participants
Christiane Pelz VP, IR
Joel Anderson President & CEO
Kenneth Bull CFO
Matthew Boss JPMorgan
Simeon Gutman Morgan Stanley
John Heinbockel Guggenheim Partners
Paul Lejuez Citi
Brian Nagel Oppenheimer
Karen Short Barclays
Edward Kelly Wells Fargo
Michael Lasser UBS
Chuck Grom Gordon Haskett
Joe Feldman Telsey Advisory
Jason Haas Bank of America
Jeremy Hamblin Craig-Hallum Capital Group
Michael Montani Evercore ISI
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good day, and welcome to the Five Below First Quarter 2022 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, Vice President of Investor Relations. ahead. go Please

Christiane Pelz

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

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

Joel Anderson

future and the macular the at earnings unique Ukraine, we Investor China. thanks XXXX continued March, war everyone lapping growth, When lockdowns issues Day Christiane and year us for including the spoke our our quarter Thank joining our of vision unveiled within call. that you, as for inflation, characterized first we framework. a last Triple-Double, for in XXXX and in in record given ongoing stimulus and

rollout future and be remain While has are the include store prototype products to store in enhance to our new customer conversions milestones our year. beyond to the and this execution positive. excited format, new adding prototype. stores been experience. to and We overwhelmingly rituals XXXX on store new all out further indeed The unique to convert proving to celebrate our about opening Key is the initiatives fleet a to response executing new services focused related and

the onto Now quarter. first

The first quarter of from impact perspective uncertain to stimulus macro the sales was environment. amid the challenging we as a anniversary had

quarter $XXX While with sales in delivered than in came decline in discipline. by April to results X% X.X%, grew sales last driven and and first sales per by share we earnings $X.XX strong while softer million, year bottom driven expectations. basket effectively line costs line of expected, over Total the a transactions. cost decreased delivered managed comparable in in solid We both diluted

Downtown XX states. continued the time. Spring top Chicago. store stores new store in all with Other of Manhattan Boroughs, as the growth our new Mexico in Our New opening Albuquerque, other Square, include growth The XX opened New Grand and of two new as first XX across a new well York in key store X,XXX driver stores in highlights Union the ranked in quarter openings store

key the initiatives, our model strategic and product, Below of quickly Five continue the capitalize our is experience what progress supply ability Worlds trends recognize and shift team's on so quarter, quickly. unique. also our and model Eight with to to product, of our chain. one our them ability The make flexibility During is first concept makes to a across the On features we distinguishing of

sourcing world, sports the Room Sunday new World. for addition on of performance and in the a media marketing and the trends. store teams the benefited our our about merchant are During states mallow Squish which from in mallows featured Candy top popular on We drinks. category spoke of while Pet in-store and quarter, social marketing the events, squish strong be continued candy, squish The strong also campaigns. trend to World squish snacks novelty outperformance drove previously

second experience. our Turning initiative to

in newest I excited about at Beyond our outlined are prototype my a comments, latest opening features Investor Day. model the unveiled destination. we As Five This

store Room concept, to which a showcases Beyond. the Our SKUs Five within while reimagine, store doubling also and tech Worlds, dedicated

converting format we at are we the over this years. stores latest the As XXX of mentioned next Investor over into Day, planning current our four on

on everywhere. Beyond Beyond are new to to Our mission XXX XXXX, In is over convert track to bring the Five we prototype. stores

better more understand with while and brand the Regarding gathering our digital connections and engaging market customers Through digital awareness we developing deeper and crew. our better marketing, are them. growing on to data customers effective experience, communities, to our on focused we are

also customer by enhancing focused And further on we them Five BOPUS letting they Below the are experience the are experience We and to end, summer. working roll out on even this want. that way a

theme chain. the about controlling destiny supply spoke Investor to on priority, Recall in Moving we on third our that of Day. our strategic detail

this be impacts continues the challenging, While given lockdowns China. in area to of

position majority of progress and we in Our This made. is stores. our I of a putting distribution expected great a ports, on been the execution and product am nimble focused teams extremely of have remain to the flow the our we example centers great proud how us into

truck from approach additional are centers. to adding container the to our We ship at in fleet securing proactive capacity our

I begun have inventory and second and buys position allows the Below. our closeouts up This year significantly us for the to emerge. since improved inventory sets us have have since one-time the of take beginning already half to special nicely We joined that the freshest Five advantage in-stock and of

Indiana distribution our center further efficiencies, and the very relates excited gain open are infrastructure, our stores, speed it this we ship our officially ultimately to to customers. summer to to and As

service will within distribution our after reminder, we our approximately a day, center enable Node to which completed XX% As we of us stores network. open one have this Five will

to progress to our support entire The has investments chain remain and serve our couple growth our great in years. take We a people, systems upcoming of of holiday team of up growth. distribution value our discipline center to the the stores opening this made for stores we our execution Growth is summary, strategy. solely our supply will over future made ever. throughout XXX centers We our now then incredible traction have on the to strategies us customers on is season. execution infrastructure with Triple-Double goal goal on deliver long-term In set pause from strategy focused focused time full and first and a of on our organization, of XXX for delivering significant of XXXX at the approximately sight attention in opening to XXXX have line

us as expect continually fun we WOW from in customers, products to continues and provide benefit and reinvest scale the us. our Our experience they

and poised We opportunities given the current environment. real in and to aggressively of pursue marketplace, the including estate, the dislocations are are also merchandise we to we seeing, which will take we grow, advantage expect

turn when than and tough, will to deliver times fun the has seek facing customers on the due to taught the Ken? Five in provide consumers inflationary more results us of values, While that Ken in is some and the financials. to details that, out are our nobody at some value I more better With current over to even Below. will pressures weigh reduction environment, near-term stimulus history it positioned our outstanding

Kenneth Bull

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

first more than the in Joel April As was said, quarter expected. challenging we

we cycle an consumers macro while record the of uncertain stimulus impact amid high As large environment, payments inflation. experienced

the $XXX.X in from first quarter sales the X% $XXX.X million XXXX. for increased reported to Our XXXX million first quarter of of

of of stores the we of open growth in XXXX. sales a XXXX increased of outsized performance calls, the a or our first impact and XXXX term first in have decreased and on impact measure our on X.X% COVID annual is in both for X.X% X.X% from results we comp the X.X%. given with quarter XXXX, earnings the decrease meaningful to fiscal three-year of near decrease the quarter As of said that of a comp a XXXX transaction compound to Comparable set the pre-pandemic XX%, versus XXXX of compare comparable stimulus in Sales ticket rate. in results quarter previous and the by first believe

expenses. first stores of versus our strong, to new XX approximately gross increase XXXX. have increasing stores stores quarter opened XX% of last or end compared the XX XX an states and of was seen the the points to operating our stores reopening stores, line in quarter remainder which be ended quarter We with approximately margin average declined of in the margin XXXX stores of when In XXXX, guidance, opened first We quarter our the As XXXX. the over with continues first quarter versus XXX with ticket XXX across new in compared in at first X,XXX to since basis in we SG&A X.X%, the one-third decline the X,XXX XX% year.

a operating in comparison million the to the As quarter pre-pandemic was these with $XXX.X the were in of $XXX.X first million of first XXXX. versus first for Gross XXXX. a quarter profit quarter of line margin period XXXX results

decreased As XXX basis points on by XX.X%, by primarily expected driven comp. fixed deleverage approximately gross margin negative the to cost

XXXX SG&A sales, expenses quarter first the percentage to a increased XXX As basis of for of XX.X%. points approximately

a cost primarily as of store wages higher deleverage, expenses fixed sales last than SG&A higher expected, percent marketing. by increased driven year, As were and

income compared XX.X% Earnings quarter of quarter approximately XX.X% last first share first a compared earnings in the the per was to the accounting of approximately quarter was share-based quarter year. $X.XX million for Net quarter We share quarter to $XX.X million for $X.XX. rate was for diluted of the year. tax net benefit the per income to a last $X.XX first effective versus had $X.XX Our of first in year's benefit this first year XXXX of XXXX diluted $XX.X XXXX. the in last of compared of first

of versus of with the a first to outstanding sheet. investments of no Inventory cash, per year-over-year. increased the compared last equivalents of our year. $XXX per million line XXX,XXX quarter increase. first drove higher was Average Average in looking fiscal $XXX debt, at last total million. first a Accelerated approximately approximately inventory the year. nothing quarter units the the repurchased end $XXX XXXX XX% including and XX% the to the as of quarter and receipts cost first end and shares Now at approximately million We first at costs a inbound credit. year-over-year balance on the We quarter approximately freight in on million our cash ended quarter million basis basis $XX store merchandise $XXX inventory store increased of on

be with and inventory demand opportunistic so purchasing in previously are that remain are and and makeup well Joel environment. of disciplined customer the season. we supply for in can selling pleased dynamic we our positioned level our preferences, the chain a We mentioned, summer our flexible As inventory chase and and trends adjust

guidance. on Now to

our XXXX As we Day we unique several reasons. March, stated Investor year at in for expect to be

First, lapping significant government stimulus.

supply uncertain strong pandemic pressures, the costs. cycling inflationary impacts openings; Second, a residual multiple of with merchandise ongoing on chains Third, store And trends. and primarily very fourth, especially environment fuel year

prudent QX performance QX believe sales it in date, we to trends Given our adjust our outlook. is to

the for expenses. At negative to tax X%. We A opening new million. driven the sales for expenses. that $XXX quarter freight levels, by primarily from $X.XX approximately with both in XXX XX of of basis second between points first wages $XX had over costs, last and $XXX expect SG&A guidance approximately income negative store marketing EPS guidance, Comps and this margin to includes planned profit of year, XX% increase to diluted effective be gross deleverage operating $X.XX. stores, Net second to Our higher quarter million due rate. operating between $XX unanniversaried quarter midpoint originally to decline moderated million down million of we and a margin X%

margin to the However, in we deleverage now quarter. first lower operating a decline larger sales the due on cost outlook, expect then fixed

marketing higher Our basis assumes for expenses originally fixed year-over-year than increased of an decline sales cost margin approximately lower and and spend. points, store outlook due deleverage, current QX planned to XXX operating primarily

will overall fourth economic and outlook out As consumers have customer the look that specifically periods. current further during as be seen to value, our we looking our assumes for better the past we quarter, in more difficult

improvement QX effective and store and position more For we QX, stocks, expanded leverage. currently drive the Beyond in an inventory sales still year-over-year increased we in and including of expect from QX QX, expect believe factors in an penetration significant will improved year-over-year and improvement We assortment merchandise Five marketing. sales several levels operating count, trends and

sales our rate. of X% range year sales is guidance. we versus expect versus approximate is the For full previous or $X.XX compound fiscal of approximately XX% of billion, of to an XXXX, a now annual approximately reduction $X.XX growth year sales XXXX an full The XX% which billion total fiscal increase

in for XXXX, subset our XXXX the For a expect comps X%, is results. of open mentioned flat with assumes we to also which the for XXXX increase approximate and fiscal same in stores first line range in XX% I XXXX similar quarter which an negative comparison, of

also rate $X.XX. million, XX%. of and We $X.XX in of an expect to effective range of $XXX $XXX million to income Net tax diluted EPS the

margin expect of We XX.X% decline marketing a year costs midpoint normalized from with operating of the spend. about driven expenses on and primarily last more at a deleverage versus higher by guidance SG&A fixed

more over our plan the an years, prototype, and XX% and our new still for including focused tenant that staying now vision executing is a gross to XXXX, next second amazing ever of infrastructure. value than stores, something sales million will closing, our new to still customers, over the to And fiscal $XXX while plan openings in manage plan we the on XXX Five open approximately XX approximately approximately to Beyond center to new new In XXX and open systems important before. primarily targets. CapEx, excluding We and in stores. in XXX stores conversions long-term experience For and opening in we Two great structure in spend the to XXX approximately with year, delivering we spend committed opening allowances for January. And remain and even profitability distribution continue between of investing exceptional and Indiana discipline cost we half new

to to to begin related that, results, over release. with details Operator? press other refer our earnings the our Q&A. For concludes remarks. our turn please to And That it operator I'll

Operator

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

Matthew Boss

Thanks. Great.

April June? help elaborate improvement trends outlook you in your into seeing could on expected So, business for underlying far Have seen May or Joel, you half the backdrop that this walk revised of so any maybe the in any the embedding relative worlds. year today? in you behavior across through could then Ken, you are the change than for to softer build consumer the in you're macro maybe the back or comp And

Joel Anderson

Yeah, late were obviously, March. the Matt. (ph) X, quarter, guided and we first I with guys we pretty mean for X in to

stimulus obviously negative to hard what this time distributed also it's the XXXX dollars come from than would they were us too when we into tell we to May predict probably comp, and when were tell know when like, closely they were expected. the tailwinds the to you why give the and many is, honestly, really a the focus the in for height So to that, and exactly it's to going and enough April what's at stimulus. distributed, just didn't into I from is little X.X-ish used were you we were April results softer happen in hard of retailers, an exactly extremely

lot it. was tax May didn't was, return and in I was the thing there we May other year more there than a last in dollars year that factor this into think

cetera. and the families, biggest being So to center height are for something hurdles us stimulus. shortage consumer be mind, to headwinds I the face $X.X et that's the their a front behind the in think, cetera, trillion it's recently which that lot continues But et most formula got of of on

frozen to you and QX of So start to do line where mode, we then, QX. can seek better. out as that think out I we're consumer think value gets guide I that's start expecting the we'll And our in with relatively tell by their

Kenneth Bull

outlook a this of And difficult the to we after looking our Joel is in we're guide point. I comment the, value I add pieces returning really or as the then, around Matt, mentioned current and around think backdrop, environment assumptions, period. your the the macro mean really I other at one guess And around going in into question customers at it value these

a of positioning you we and and Five guide in that to given for comps outlook you comps, obviously, at much benefit a the X. minus in-stocks to look year. about inventory assume half a guide some for point. -- to in now QX comps, QX. Beyond. the our factors, then really the -- that in especially We've When bigger full seen the half the back good sometime comp in provided the into translate and And do the would given seeing and yet first So flat It year of QX this we're of of assumes up called the year positive not the that we that that I mentioned and We when those what fourth with out kind quarter expect you the feel negative then full the of that see things and moderating QX some benefits of right we kick-in.

Matthew Boss

[Technical Difficulty]

Joel Anderson

Matt. Thanks,

Operator

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

Simeon Gutman

[Technical Difficulty]

Joel Anderson

your hard I time. was Simeon – having

we a how do asking retailer? drive as traffic discretionary You

Simeon Gutman

Yeah.

think that you you factors [Technical given backdrop Difficulty] you're that any evolved? and change So or is the

Joel Anderson

many that buys Walmart mean, saw they time. rather of I us, find of remarks Five pretty wasn't there. year, during was that look they're than the recession Walmart. see the going closer time. that comments thing time to I we and to to customers back their we the I their our type back opportunities the and same I at half we're and time for at And get here finish and start one as and special there that's that time all, of of that first especially we're at was see holiday think last to because were We trip value And successful Five. trip the buys in look, Well, know value to think I starting lot at for going think, around a OA why was so thing. on a (ph) I of certainly a

start from of we a their kids. move day discretionary for into to the is would as a certainly retailer place, ToysRUs so, And and tell retailers the history will as back needs into half cut we year as last consumer from the get a well the us

year. reason we why And year as message focused that so to this are we change Thanks, half of and second see value that on the so is no the the Simeon. ahead we look doesn't

Operator

is from ahead. question next the Please And Heinbockel go Guggenheim. John with

John Heinbockel

aggressive closeouts and Hey, want then questions, categories what And do on markdowns then related price just away. to Joel. maybe right. philosophy Two us pack be secondly on you versus How and points? your remind

Joel Anderson

Yeah. It's to pathway have think the (ph) second second both something them, a good balance your really of is question, I'm that taking of you first. I question, part

years a have aways. ago pack few in heavily We invested were too

we worked small becomes you complex really a think just national I well that really regional but when thing. player, were that as become a

in Michael's buying dry for Worlds. customer, those (ph) we and to him present opportunities the aways chasing a our Eight it merchants second but buys, presented that market pack be in the see change aggressive given look, your they to us -- area sorry category us on pretty philosophy mean, on that then to big I across launch years, any to a last part two if will one core been that's we're starting be expect in markdowns. relates all product time to see becoming going John and full And don't I of be to cart we're and forward. So themselves, how in is our

well in of We manage we'll track good and itself very extremely Eight aggressive This to the is holiday. product record that, be how Worlds. We've all a end year. clean expect our inventory by got be to but at the

John Heinbockel

you. Thank

Joel Anderson

Thanks, John.

Operator

Paul Lejuez The Citi. with next ahead. question from Please go is

Paul Lejuez

of year, typically I what close and year? bit what then, Joel. seeing you you mentioned dig a in was think And capitalizing of there? Hey, buys be in are estate. like frame next the into out could this you're just on if versus special little terms represent you your some real Can you you might where opportunities just that sales percent Thanks. curious going

Joel Anderson

constantly units piece closeouts and much, of emails of to we Yeah. business. try value. can't than look so. much really a really our it were Paul, we they It flow drivers to total. It closeouts not that but serve chain, social double-digits use you with can a can we on bigger going our special how is Having be They're and and as to into an drive and regardless XX,XXX, a that our store business. media that, uses less customers XX,XXX, goods. will at lure traffic our buys. very those Look, of rely use still of We sitting and Well, of item incredible XX,XXX said was our small be in small on when

them to ago, to hasn't a the some year, of weeks resales of of business. online of as of So show of traffic. the last about real estate drive as up the it's for more but piece able a just And years it's nice of overwhelming couple announcements goes, but listened opportunistic and doesn't which because can our be it's it couple several in strategy, more biggest Vegas, really make our far probably piece estate COVID. the really you've the exclusives, to from We coming as is real occurred use back we're then which in retailers, ICSC,

a backing we where year. back to back from and The growth. to are some, landlords energized They starting Our ready start their landlords change and the everything to to been came half up loosen the into to sea next the team us. up really year getting back it's that talking are of and into the this think some are I beginning at see year bottlenecks so of were get of of where excited was

of with it ago. Vegas, of really shape up done out great the of tenure are the line why, out the sight remarks, a XXX year year for prepared meeting this weeks and is Las my and deals that's of of of to all year said, got the next added pretty as we for couple this So starting with commentary in of much the kind we've the

Paul Lejuez

at Joel, the than anticipated those year. of you better in the beginning rates come

Joel Anderson

change, went I a take change opportunity the we're mean, this point centers, A presenting All in if it's opportunities & rate. about centers less the we opposed Thanks, to staying the C&D than committed at still rate as it's Paul. B right, down, just at we themselves into but rates clearly, and easily to least more could

Operator

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

Brian Nagel

Hi. Good afternoon.

So of you my it at or sales quarter you during last a that and you function more if help some maybe the particularly lapping back what difficult short for performance was within and short is are seeing us month the in this question, seeing pulling of actually that falling you of look modestly be? that, the is would April, just comparison really year as business understand -- drivers, are the consumer in under of signs your underlying the guidance,

Joel Anderson

ways to Yeah, of consumer tease Brian. than which because really the a at well out, tough both income lower It's the as markets the exact clearly think higher are one and of time, combination we other, kind household market. house measure income same and because both performing that, hit our it's not our but I more they as can

over separating But dried customers have those we at So wait both. those same hard it's those definitely that other. in the income two But up sales. out of happened one the kind and year's because we've that's they therefore to are where from last discretionary a seen dollars stimulus, seeing tightening clearly less have time,

Brian Nagel

Thank you. Got it.

Joel Anderson

Thanks, Brian.

bet. You

Operator

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

Karen Short

I'm but growth, It to Thanks with at you three-year much. really sales looking second that very when you are three-year half specifically, look meaningful guidance to just go second expansion basis, obviously, and volatile, strength realistic. mean now, I need and that Hi. respect see half EBIT comps, I to but there at implied. second for doesn't this things margin more that appreciate back growth on your in a, seem very I guidance is a seems the half necessarily the wanted three-year three-year to right just

a that to that tie your I you want is in fact have the have that the really feel up light the the so are consumer? know to greater obviously, bit And of risk good ongoing And into much inventory, I what's question year-over-year. quite inventories weakness like, but about markdowns in you

Kenneth Bull

Karen. look There and is to the at challenge pandemic other numbers given right ways challenges Yeah. the things comparing different and the Thanks, obviously year-over-year, with now there.

shortfall at was the and what on normalized year that a is XXXX, quarter, back back it our when I'll and QX which per the to basis to first And go way relatively you it increase one XXXX. of there current the in quarterly to again and third back that, pre-pandemic. look average put based you more you is at as second results out way a at and the environment, fourth quarter the a in sales quarter. on again could store the look did go go seeing. we're we look do you'll at at when So notice consistent look and for a There and One look is is little bit again

kind quarter of levels gets really So to it that we saw. back first

think half back you geometric quarter. when of stack basis where the look a you see that year is I getting the and you when back also, first at from it that with at it way trend in So the look line same

mentioning you guess a as So it that you're stick there. hockey that of much the, you're, see don't I

Joel Anderson

Yeah.

fact, will you is exact to same at perform the have do In all levels QX. as believe we

of back we half I'm versus thought how terms look in of it but first the are sure that's kind what numbers So about at, not quarter. you

Karen Short

And risks? just inventory the

Joel Anderson

mean should part of year-over-year. significantly I maybe to we it but bad our plan the mean probably Day, far talked about was it Investor be up I at

is costs. the all shipping added that it just about a levels all mean that's we et year did was were wanted costs, here I Some we QX inflation to and it a for include of we cetera ready not year levels, inventory we piece I inventory it have pulling summer wanted forward, in of there our the ago. ensure in last mean wasn't

mix, but sales but little much there's sales percent, from than it so far what is really no more that materially bit the up concern overall, mix guided, we few of So, end. is not a off our because

terms what's In and you here, I'll in the inventory been really fact, since newness bode I've of tell we've customer. clean well had that for should

Karen Short

you. Thank Okay.

Joel Anderson

Karen. All Thanks, right.

Kenneth Bull

Thanks, Karen.

Operator

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

Edward Kelly

Good Yeah. Hi, afternoon. guys.

elasticity color what that and much. that like, recent just has all. right guess the past, inflation sort a And I think also down have the slowdown pricing had additional then big of we that driving that most QX, but what in at how for just has I environment, Squishmallows taking you've product know on probably how some see. X.X, by you like won't slowed on I one like performing, on was the trade the stimulus has the trend that been you're more mean So I price changed which is, know

that. there like QX Just about in optimistic the could curious, product is other that things holiday, have to Thanks. pipeline maybe speak you you

Joel Anderson

Yeah. go back to remarks, strong I I for continued be mean to prepared very us. squish my mean has

see instead buying a those is are so the markdowns We last been is over PS that but very become We've couple got of talked a non-existent in has of, will we XXX anyone an chase new everything have for very, -- a store out store then impact. of were example we of is trend stores QX. Again, much think a prototype. We've lessening we I potentially got clean having finally great about I could And just there's that is which squish so trace how there. one about year, as trend with find poppers as now. QX, We great for trends. much over trends emerge still in a as will years customer Licenses from as up earlier, -- pretty we value. trends, stimulus against worried that start that the to on need movies area

Ken headwinds all the towards year, lean add. a the So those positive of kind you the to we want prior of of get back of worst from add the as through years. outlook anything really on half

Kenneth Bull

supply year. last teams better QX. last know I Yeah. chain need at add in this the -- year amount all just of And teams inventory have. right the mean, again bit digital. about inventory getting I that the to marketing, on increased especially mean, we on then more position than job our the the, a buying terms we in a just done the and right I'd were effective we remarks more challenges marketing little chain we're what and we prepared marketing, and great the our the the better supply to have at mentioned of the also

that's those into mix, and potential why around hearing comments that for put you we're you're making holiday. those So the the QX

Joel Anderson

care. Take Ed. much, thanks Hey, right. All

Kenneth Bull

Yeah. Ed. Thanks,

Operator

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

Michael Lasser

Good evening. my a taking lot question. for Thanks

you X full-year full If Would risk more to you comp year. do in EPS rather to your half? to minus minus of on back or you X light the flat guidance deleverage full a for have experience in for than Thanks than the negative would of a year X the the $X.XX the less lot. comps

Kenneth Bull

Michael. So,

we You're minus… do asking, okay. a If

Joel Anderson

flat instead X, of Minus X X. to minus

Kenneth Bull

the have but EPS don't exact impact. it's figures if I a mentioned impact, to I going here from Yeah, mean you $X.XX not be, an

Joel Anderson

a impact? saying or that, it $X.XX than would less be Is we more

Michael Lasser

from earnings Yeah. takeaway year optimistic. for back release the half outlook for folks The is overall is the the of the that

for scenario would could year for light that viewpoint, be earnings you downside helpful. frame of if in [indiscernible] So it the

Kenneth Bull

Yeah.

I today, are, by the terms of costs that look fuel think, to being I Michael, the as you to that but listen fuel in impacted didn't about we're mean the of hear us impact for things and increased that us talk one at surcharges like other ways retailers really total year. you

our strategies on that it. operations going we're mitigation in results So working on cost is and what's embedded

where organization we one nimble is things. known This and time. respond for of to us has the Joel these we're things So mentioned, long a you've

bit that, using we're to offset helps back you expect, [Multiple in a Speakers] you probably you're-- we're that of efficiencies if probably reduction that terms cost from negative in the at and you're from look guidance you're the mitigation than year, of for would to earnings. here, a that given So the what would back flow strategies through seeing it's assumed all sales that better sales larger you our But frame that that assume prior looks internally cost half change right, doing pretty significant other the when little the half up

Joel Anderson

Take the example quarter. of first real-time

Kenneth Bull

Yeah.

Joel Anderson

below came of the at earnings the points comp X guide roughly yet It's percentage midpoint. and in right

side and manage of we've big wouldn't on really think got our a to the earnings. forecast business I certainly flexibility I in So, that decline

Kenneth Bull

Yeah.

Joel Anderson

together, doing that the But putting math without we're we're that some you about. outlook Michael, but gives hopefully on thinking how

Kenneth Bull

Michael. Thanks, Yeah.

Michael Lasser

Thanks.

Operator

Grom question go Please Gordon Haskett. is next ahead. The Chuck with from

Chuck Grom

that when basket was understand basket being evaluate than Hey, being it talked higher XQ size, I or you thought XXXX. frequency was your ticket about still the let it Joel countless, changed, XX% unpack me

And was why just May have like the so basket? frequency, think said, has June that's then Five for which frankly into soft, counter as been to and of curious you a Below? I'm So case retailers it lot is a sounds it

Joel Anderson

Yeah.

first combined from -- enough the back the on last was honestly, XX-XX I that in of trends credit and in roughly much May, as bigger the everything to May, for lapping -- didn't formula than 'XX. year that think one, from end our stimulus shortage. with it's give and at biggest On were popper peak that the we And spinners

May initial other on But, back tell enough already forecasting And So you there. improve. forecast. we've really put as -- of driven about our we was we can going all didn't quarter May the our just the to the by conversation starting see correctly things half this been here, that relative mostly by to soft into talking it

Chuck Grom

Thank Okay. you.

Joel Anderson

Thanks, Chuck.

Operator

ahead. The Feldman from Telsey next Please is go Advisory. with question Joe

Joe Feldman

start starting ask Thanks like, to in you to I you within did earlier, said I down may Hey. whether a before it missed I it's items that kids again, question hadn't the for in basket? but Yeah. quarter. know don't if or fewer even customers see lower trade the or seen buy coming to you maybe items any taking priced Wanted have guys. this you the

Joel Anderson

see too look, in of the signal down No, a of happening yet tough beginning unusual period time. trade have we a not that's the meaningful of to Yeah.

we seen it. time, point haven't this in at Joe, So

number know, as units no, As that's taken by you the AURs, far haven't prices the ticket of goes we offset overall, and a more seen any. the have we little up. softening than as But in

Joe Feldman

Appreciate guys. it. Thanks, it. Got

Joel Anderson

Joe. Thanks,

Operator

next Bank ahead. Jason of question with from Haas go Please is The America.

Jason Haas

taking question. afternoon. my Thanks for Good Hey.

Beyond mentioned cash curious regards Five those product a I'm markets to had you rolling the constrained? storage just saw going underperforming. you higher the bit customers in about and that items in where out question and price income reception seen feel environment the to and to So point markets about those what more be lower you've how you

Joel Anderson

by any the goes, as comments we there -- that in value were seen all it's and economy Five that largely our about deliver overall We Five as mean about Beyond more but versus differential have comps we income any I our extreme intuitive that income no low stores it. customer household driven But Five higher know not concern being our Beyond. the are and stores. appreciate seen sound our they far Beyond haven't I because Yeah. negative it's incredible value. that on might notices counter what value, household my so the

Jason Haas

That's hear. you. Thank good to

Joel Anderson

welcome. Thanks. You're

Operator

ahead. question next is Jeremy Hamblin with from go The Capital Please Group. Craig-Hallum

Jeremy Hamblin

a that an totally I the given maybe It to have different hasn't had Thanks. from lot, but a been in direction could the if tariffs bunch see like, news, talked we're inbound moving now a Ken, to the years wanted of over going sounds in removed. here the be it And impact. tariffs I where China and it's that about and are on few ask last product existed question. a

of removed to were subject that So I importing, if would what the you're all wanted to And inventory understand, basis? percentage total firm on for potential two, tariffs your the the margin tariffs what benefit products a be today? on is one,

Kenneth Bull

for to haven't that's guidance there feel is that off, tariffs assumed thought nothing reduction our or for years, there question. a I any change while. but just for from Jeremy. tariffs. start that Thanks about Hi, We Yeah. in like in is --

We’re any it assuming be part. kind level. of that the haven't would -- on lot were going they primarily same or taken. be heard I product to that is anything of read for a tech of action yet on most of the at They definitive was

between terms and XX the of percentage were impacted about it for imports In that was of the tariffs. XX% that probably our were impacted,

if in those have done math I on, partially on haven't or So were overall. or whether impact reversed the any it apologize would operations full in I what business

Joel Anderson

Just positive that, does our, our we if we will our also take that XX% keep existing of it got depreciate which to we all to roughly that. through impact in unless do existing goods that in get still reverse but retroactively, range. the mind they All start -- before feel it's Jeremy, move

Kenneth Bull

much, a we much Yes, portion of import. get. Of smaller total

Jeremy Hamblin

Yeah.

I XXXX. think it's financial Thanks. more

Joel Anderson

focus a the Yeah, nice would it, Thanks. where we on be right. but All absolutely. that, be tailwind. take That's

Kenneth Bull

Thanks, Jeremy.

Operator

The Please next ahead. Truist. with question is from Scot go Ciccarelli

Unidentified Participant

Joe I just is Hey. (ph) questions. This have two Scott. quick on for

to shopping like income maybe cutting general driving centers that do all lower where less on following here? is can you lower is First, that. the because a on or the discretionary Would you something think of prices, up that they're just in because higher base just that you just income you had say consumer issue provide breakdown just or saw. impact higher versus have consumer you traffic something spending there gas guys And the income secondly, that the of

Joel Anderson

because, up out hard that Joe, year. at tease from that same customer stimulus against It's the forget to all don't was same last time,

roughly of strength, but inflated a the income of where less XX,XXX. consists stores our an is was than it So fleet household third

that. you're the So are But, for cetera., about I third, us. possible certainly that not but outcomes just discretionary spending a per on think certainly I can't give money say cetera. they're all et gas about on trips consolidating se, you represents some of perspective et and any income, it talking stuff

Unidentified Participant

you. Got Thanks.

Joel Anderson

Joe. Thanks, right. All

Operator

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

Michael Montani

I areas could to I was question. you basically wanted Thanks just Hey. seeing if the ask guys of which on terms specific are cost. for costs, transport the input three taking of what in

wage the rates or in Secondly see any there were you've rates? out signs spot term back from the around that half of ocean to terms levels in any kind baked it if persist? kind that half in around in was you if down so inflation you've on or input participate? any freight you're cost then diesel, not able back was And relief at may if that is of there of relief to peak wages, If record come lastly of assumes if

Joel Anderson

not participate add. Yeah. the don't I mean, in Ken, know, rate. do you I we largely spot

Kenneth Bull

Yeah.

freight, freight containers. I ocean areas three think those and -- kind inbound of Michael just on on those on

up end at significant did we that of and rates, the you for last really we If year, our a period. recall, a of lock almost multi-year -- and all capacity

locked baked that's are those So into for good in. is real have, which We've capacity our rates, guidance. clear to to so visibility us and got

what those increases You the levels amounts year. historic fuel the levels from surcharges for at and are mentioned the the seen current we've past. diesel, of of assumed rest in course, We've over

talent going there before, So And rates, in fuel improvement said this wage obviously, regards with our we've surcharges. to to mean, with but we're that crew in then assumed out I remain we an not getting we competitive our wage it's out and minimum the field, anything guidance. or increases, we the any increases based into mandated have, state that and been anticipated on best baked by anticipate whether has

Joel Anderson

Yeah.

baked and right. coming I think states expect everything the other year. All Michael. unless change in there Thanks, I -- So wouldn't got this year is changes in this we've surprise any

Michael Montani

you. Thank

Operator

conference for over closing Joel the Anderson question-and-answer like to our remarks. session. to I back concludes would This turn

Joel Anderson

Thank you, joining for everyone operator, us. thanks and

tell on operating the we first quarter can environment. nimble was as this certainly are being focused challenging, as we you navigate While dynamic

retailer resilient an for We continue growth. and to long believe runway with innovative Five Below a as

that to strong have a and with distinguishing remain payback balance focused merchandise wish as great we at summer on summer. speaking strong are delivering you the school In with evening. and a is sheet, shop none you list beach expense out again incredible end industry-leading at model everybody. a We list to end will outdoor always, products. and all serve and us continue to Thanks the with pool value there all I your changes. And look which to These store amazing cost a our new Five management as forward you We and closing, of to quality fun great an discipline. year, well Below of We attributes Have grow. characteristics, the summer needs. for of commitment encourage an

Operator

presentation. conference you for attending now The is today's concluded. Thank

disconnect. now may You