That's our amazing product and expert merchandising that really is the foundation of what we do.

I am so excited to have the chance to unveil the ever evolving Five Below prototype, and I want you to think about it like this. This is what we think of internally as a semi-rural surprise. So let's get started. Those sales, well, they grew on a six-year CAGR 23%. We have so much runway at one, two, five, and we're going to continue to do it, what Five Beyond. These insights have broad applications across the entire business to drive sales. RUN TO FIVE BELOW!

As as the success of our brand and our value offering continue to grow, in 2012, we are proud to say we opened our 30th store in the Philly market. This drives lower freight costs and improves our upstream visibility. One of the best things about Five Below is its name.

That's all about controlling our destiny so that we can drive speed, visibility, and efficiency; Fourth, experience.

These are the best pillow slides that are worth hitting "add to cart" on Amazon right now. 14% is a nice uptick from the 13 that you just reported.

And ultimately, this informs, it shapes and it guides our growth.

And what you're going to see is a lot of room and a lot of tech. It's still amazing how consistent the performance is from store to store.

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I wanted to share this market with you specifically, because it's one of our oldest -- it's our oldest market and it's one of our most dense.

The next generation, well, that one only took three years to improve the experience once again, and that's when we introduced the Beyond prototype in 2020. As a result, we now expect to open approximately 160 stores in 2022.

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OK.

The fresh prototype was introduced in 2017.

The prototype is a measurement of all our success. "The advantages of wearing pillow slides over most lounge slipper shoes includes superior comfort, cushioning, durability and they are easier to clean." Over the next few years, you're expecting your per store volumes to approach $3 million. And you know what? I was having this conversation at break with a couple of you. We haven't seen anything on top of that.

We were stuck at 12% for a number of years.

We're about two weeks into it versus when that third payment came out. So, for fiscal 2022, we expect sales of $3.16 billion to $3.26 billion with comps in the flat to positive 3% range. Thank you, and have fun.

And I think, look, nobody's been through this inflation. It took us ten years to perfect the concept of Five Below, and that was validated with our IPO in July of 2012.

$5 | . Backyard Boy.

And so, we all know how each other work. So thank you, Joel. Eric is now going to join me to share the progress we've made on our journey from the supply chain. That's what we do at Five Below every day. It was a place where they could spend their allowance and call Five Below the "yes store" because Mom always said yes.

| . FEEL THE GROOVE. At that time, the formal part of our presentation will conclude and then we'll open it up for Q&A. We've assembled a comprehensive strategy that gets over 80% of our stores into the format we unveiled today, and you'll see later on by 2025. We also expect to grow comparable sales on an annual basis beginning in 2023 from 3 to 5%.

Additionally, we also executed $60 million in stock repurchases in the fourth quarter, buying back about $369,000 shares. Pair them with loungewear or an activewear set, and you've got an elevated but cozy look. It's a big milestone for us. And then there's been a trend of the stores getting bigger as you've done these new formats.

Hi.

And as we continue to scale outside our home base of the Northeast, we are encouraged by our new store opportunities.

Blair Bodek, Pacifica Capital Investments.

It's not booked in the anything plan. We're trendy. Included in the fourth quarter was a great holiday season, where for the nine-week period, we achieved a 7.7% comparable sales increase on top of last year's 10.1% increase. Like if you think about tech, as a specific example, you know, our iPhone chargers used to be this big and while Michael's team shrunk it, you'll also now see wireless in there.

Can you talk about the mix of those stores, whether it's new market versus existing market? As you know, we move from year-to-year, quarter-to-quarter.

Now, on to guidance for the first quarter and the full year of fiscal 2022. Based on these metrics, our payback period will remain industry leading at well under a year.

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OK. Well, real quick, a second one. What we don't want to do, though, is go the other direction and become an infant and preschool store. When you when Joel talked about keeping the Five beyond area confine, we have higher walls.

That's our corporate headquarters, and our field leadership. Before providing some color on our fiscal 2022 guidance and color. We also expect operating margin of about 12.7% at the midpoint of guidance with a decline versus last year driven primarily by higher SG&A expenses from a more normalized marketing spend.

That is their life.

We believe in that deeply. He heads our product development, our sourcing, and our brand marketing initiatives. Five Below's growth vision for the future.

And again, you heard about our distribution network and being the ability to lever that now. Seriously, we're here to have a lot of fun.

I'm going to turn it over to Felipe, who's going to share more about how we create and leverage this data to create more amazing and relevant experiences. Identify more opportunities for Five Below anywhere across the US. Really great to see everybody live and in-person.

We also leverage our qualitative and quantitative understanding of our customers as a key input into how we design and deliver amazing experiences for them. You heard it today in terms of the product and the experience in the store, inflation that we've all talked about, right. If anything, we'll just continue to grow the size of our prototype so that that part stays part and parcel and true to Five Beyond and the front stays true to Five Below. Like I said earlier, while we don't have an exact replica of this inflation like this was long before Five Below is born. TikTok video from nalastasia (@nalastasia): "Five below find of the day #fivebelow #cloudshoes #walmartslides #boujieonabudget". We are the S store filled with fun that makes us smile.

Ed Kelly, Wells Fargo.

Thanks for joining us this morning.

They are the ones that constantly unleash their power and passion so that we can achieve the impossible every day and wow our customer. Karen Short, Barclays. There are five drivers; First, innovation.

Following Henry's back surgery, Five Below contacted us after some of Henry's followers called in and shared his video from the hospital.

They've been around for longer. Yeah. I think the theme in all of that is, as you just said, control is controlling our destiny.

ET. As Joel mentioned earlier, our 2020 through 2020 algorithm called for sales growth of 20%, driven by high teens unit growth and low single-digit comparable sales growth with more than 20% growth in earnings. Look at that picture back there. One, just curious, how are you thinking about rent? These chunky soles are a fun addition to any wardrobe.

I'm proud of the progress we've made in this area and throughout the day to day. Thank you, Joel, and welcome, everyone. And most importantly, we built a stronger foundation for our continued growth. Speaking of people, we hired Rich Tannenbaum.

And not just product but also age. While our customers, where we commit to delivering incredible value and creating a positive difference in the lives of our customers, unleash your passion, aiming to leverage the superpowers of our crew to make a difference. So it took us 18 years to open our first 1000 stores. Continue to build and develop strong relationships with key vendors globally.

Thank you. So let me be really clear. Five Below was created for tweens and teens. I'll say that again. But in terms of a model, that's what we're looking at in terms of laying out. In order to do that, though, you've got to look backwards in order to look forward. This strategy leverages our new store buildout and our ability to convert about 750 of our existing store base into the new into this new format.

And we're going to hit a thousand stores in that period of time. Speaking of purpose, it's real simple. And I'll show you an example of that in just a moment. Toss on a pair of ankle socks to fight off blisters and bring a layer of warmth if you're wearing them post-summer. We had fun interactive departments like Sugar Rush and the $5 Tea Shop and Five D style.

But the best part about it is every time there's a new trend, it gives Michael's team the license to go after that trend.

Look, we always said the store was created for teens and tweens, but also finish with a universal appeal for all.

Now, that's a first. It's all about a culture of innovation, and you'll hear about that; Second, product. Those are probably the next two opportunities. What we continue to do is recognize them, we find them and we'll distort them. So I would I would put that is probably one of the largest drivers out there for us.

We expect comps for the back half of the year to be in line with our full year guidance. Comps of flat to negative two. Dovetailing off of Joe's question, with all these interesting merchandising initiatives that you have, do we think the stores should get bigger than they are today? He is also -- the stores organization is also in many ways the recipient of, and must execute all, our growth initiatives. New Five Below Finds | squishy slides! Ken and I, been doing this so long together, we just finish each other's sentences. And with that, I'll turn it back to Joel. Before we break, we're going to run a quick video and then I'll see you back up here in 15 minutes. But let me give you a few fun facts.

Our room world really allows kids to create their own personalized space from blankets and pillows, wall decor, and so much more.

George will take you through the experience during the store visit later. But again, we're still we're going to be looking to increase customer acquisition and retention, which should help to drive traffic also on an overall basis. Now you're going have to pay for shipping for that at the same time, Felipe also outlined many initiatives are coming forward this year that truly creates an omni environment. The current distribution network center network can service 2,000 plus stores.

This will truly create a omnichannel experience that a seamless for our customers. Behind me, you'll see a deflated basketball.

We always talk about the foundation that we have to build to keep this successful growth going, and that's a combination of people, that's systems and infrastructure. And to do that, I want to have Judy Werthauser, join me on stage. It's hard to believe that it's only been 20 years since Five Below was started just outside of Philadelphia. Five Below (FIVE) Q1 2022 Earnings Call Transcript.

I'll take that one. As you've heard, 2022 will be a unique year for us. And we'll have it done by '25. He knows a lot about our history. And I think all of you know how much I love growth and innovation, but really what I saw was that our eight amazing worlds, that's what allows us to find, we distort, and we bring all those unbelievable items to the customers. Eric has a true end-to-end perspective of everything that impacts our supply chain.

I'm going to ask Ken Bull to join me up here to look at these results. Thanks, Joel, and good morning, everybody. Our payback period will remain well under a year. original sound.

I think one of the biggest changes for us going forward and as you've seen the significant investment that we've made over the past few years, not just in the distribution network, but also in things like systems and I.T. It's not something we teach. How do you think that plays out over the three year period?

That's our triple-double. Chuck Grom from Gordon Haskett.

The only area I'm really dogmatic about is, we're not going to allow it to go downward. review process. And we'll continue to invest in the foundation business to be able to grow it.

We saw an opportunity to get back to that intimate knowledge that Tom and David had in those early years, but at scale by leveraging modern tactics and techniques. It's going to -- the overwhelming majority will be in the existing markets. So we're implementing many of the core tenants of omnichannel. It's actually rent going the other way. All right.

Matt Boss, J.P. Morgan. And it was also our first attempt at creating an environment that delivered on our purpose. As consumer looks for value, that's a real opportunity for us. That's ten times as many stores as we had just in 2015. And I think you had another question on the truck fleet.

We built new capabilities. And there's very few retailers that can go at that breadth of a trend. That's a triple for Michael. You know, it's interesting because -- there's older stores. They've been doing this for a long time. We're going to grow the top line 20%, and we're going to grow the bottom line 20% plus.

Real quick.

Five Below is still a unique concept. As you heard from Joel, Michael, and Eric, we always walk everything back from our customer and we continue to focus on learning who they are, how they interact with Five Below, and how we further shape the experience to expand their engagement with us. And think back to what George shared with you when we were outlining growth.

| . Lazy Beat. We are piloting ear piercing in 150 stores. Yeah. We're not spending. We'll see you all in 15 minutes.

Look, I think, Matt, you got to go back to what Michael outlined in the eight worlds. That means Five Below cares about the future of the planet. In addition, during the year, we expect to complete about 45 remodels and about 200 conversions to the new Five Beyond prototype. We opened a record 17 new stores in the fourth quarter.

John Heinbockel from Guggenheim. Hopefully you still recognize the passion.

And what also hasn't fundamentally changed is, as we continue to get scale benefits, especially on the gross margin side, we're going to let Michael reinvest that in the product. But if we're going to continue to grow, it always starts with people, right? And then now the potential to grow in urban locations, because I think the pandemic opened up some opportunities for us there.

And in fact, Squish even became a craze. AT FIVE BELOW | CLOUD SLIDE These benefits have helped us to successfully navigate through the challenges that presented us themselves over the last two years, and continue here into 2022. Plus, it's water-resistant, so it's a great choice to take to the beach. Let's run the video. Diluted EPS of $0.54 to $0.62, and a 25% effective tax rate. I'm going to call on you and they will come over with the mic. My basketball also has a number on it.

But and with that, we'll do guidance and a Q&A session.

So, we could go through every single one of them. 15.1K Likes, 147 Comments. To support that vision, we've made strategic investments in data and analytics that are helping us understand the behaviors of individual customers, unlocking richer and deeper insights into how individuals are interacting with the brand.

They come in and they can choose pink or black or white for an online customer. Brad Thomas, KeyBanc Capital Markets. We continue working with leading analytics firms to help define our future growth. But we see -- we do see an improvement in that return on invested capital as we move forward.

Less densely populated than the 50th store. I'm going to ask Michael Romanko, our chief merchandising officer, to join me in a minute up here, and share the details of a product journey.

This year, we're excited to set a goal of $10 million in giving. And this is just the beginning. It's about brand awareness. Examples include improving productivity, perhaps, maximizing our store potential, and perhaps, most importantly, deepening our knowledge and relationship with our customer. But 14% is a nice expansion. Diluted earnings per share for 2021 was $4.95, which was more than 1.5 times 2019's diluted EPS of $3.12, and a 26% two-year CAGR. So -- as the vintage comes up on their ten year initial real estate lease, we have the option to either take some bigger space, keep them in that and remodel it. And this all led to an operating margin of 18.8%.

Blair Bodek -- Pacifica Capital Management -- Analyst. I want to recognize that there is also a lot of people with us online, and I thank you for also joining us. What role does e-com play as a percent of sales or just how it can become an omnichannel initiative for you even more than it is today if that's the way you're thinking? We are taking our time with this because we simply do not want members in a database. No other retailer offers the relevant trend right product at our incredible value.

This may be more for Michael, but what are you guys displacing?

To put together this list of the best cloud slides you can buy, we consulted our own Lab experts as well as podiatrists, then scoured online reviews for the highest-rated pairs with rave reviews. There's a lot of numbers to absorb.

But all the signs so far have been very positive, considered a pilot at this point in time. [Video presentation]. You put the slide up four-Wall EBITDA margin on the new build is around 25%. I'll take the second half of that, and Ken can unpack the same store sales side of it. At the time, we believe we could grow this market to about 20 stores.

THEYRE SO COMFY!!! Is there risk that you're going to see diminishing productivity of your boxes as you grow? In fact, our St. Jude campaign is currently running, and we invite you all to participate in this giving campaign later today when you visit our store and on behalf of our customers, crew, and St. Jude, thank you.

There are a few.

Excuse me. Again, yes, so the webcast is officially done now. And those interactions provided them key insights that allowed them to dial in both the experience and the assortment. Hey, good morning, everyone.

We need a little more time to get through the end of that and see if there's any lingering impacts. As expected, January was a difficult comparison against last year's 38% January comp increase, as we were lapping stimulus payments. Squish and sensory and slime lickers all at the same time. Its durable, anti-slip sole also makes it a great option for your next gym or spa excursion. We've got a phenomenal real estate team. I think that is really at the heart of what makes this concept so unique.

And you've heard it from everybody here today, especially Michael, in terms of the products. You're going to see in that store everything that you'd see in an existing store except for the expand side beyond the balloon and the ear piercing.

And I'm going to provide you context, more context and what this really means.

The second iteration was our fresh prototype. So we think we have the ability to not only garner new customers, but also retain customers longer. But where it's most visible to our customers and quite frankly, all of you is in the continued evolution and optimization of our prototype.

"The benefits of wearing orthotics or a shoe insert made of EVA include increased comfort and cushioning of your feet to relieve aches and pains from standing and walking for prolonged periods of time," says Dr. Miguel Cunha, podiatrist and founder of Gotham Footcare.

Infants and preschool.

And then, Ken, on comps, could you help bridge drivers of the 3% to 5% same store sales in this plan relative to low single digits in the past plan?

That serves as a reminder of how important growth is to Five Below.

Our crew made all the difference to this one family and what they did. And one of the biggest anniversaries and challenges is going up against the stimulus. One Amazon reviewer even claims that while wearing these slides they "do not feel the pain in my feet that I normally feel when walking around. Two questions.

I know you want those Burke's out there.

E-com, we think of as icing on the cake, not the cake. We are the only national kids general merchandise retailer. We expect the second quarter to be the easiest comparison of the year with operating margin declines moderating from first quarter levels.

That prototype we call vintage. All this growth, and we are just getting started. | Cute strappy summer sandals Learn more about our

We ended the year with 1,190 stores or CAGR of a 15% on a two-year basis.

One of the things I'm always fascinated by when I shop the store is how wide it is. It's our first ever Investor Day. And our expectations for annual performance in fiscal years 2023 through 2025.

Our new store model for the new Five Beyond prototype, calls for a near one AUV of approximately $2.2 million.

That's really what we continue to do. Cost basis and return based on previous market day close. He is the Fortnite World Cup champion who just claimed his third consecutive Fortnite Champion series title.

Yeah, that was a huge milestone.

yeah, -- it doesn't include Manhattan. Crew members getting the first car. Assisted self-checkout is a result of customer feedback that we receive during our busiest days. Look, [Inaudible]. You heard Felipe talk about what we're now going to learn about our customer. And you're going to get to see it later in action on the store tour with Tom and Dalia.

Judy leads several of our teams like strategy, data analytics, technology, and our people teams. So who better to share the vision of our growth than George Hill?

This article is a transcript of this conference call produced for The Motley Fool. Yeah. All right.

It's pretty simple.

Thank you, Eric.

Versatile, super comfortable and easy to clean, there there's a lot to love, with most styles available in an array of neutral and neon shades for under $20 on Amazon, where enthusiastic reviewers say they feel like "walking on pillows" and are "so comfy and supportive.".

Well, earlier I heard Joel speak to when -- unveiled our triple double. If we do nothing, the current network gets us easily to 2,000 stores.

There's some shifts going on with Easter. TikTok video from shelby martin (@shelbyy.lynn13): "Its the rainy day curls for me #fivebelow#haul#shoppingaddict#cloudslides#fyp#foryoupage#SeeHerGreatness#curls#tees#rainyday#decor#loveit".

So really, how we're going to see that happening, you're probably going to see the leverage happening in both gross margin and down in SG&A, as we should have the ability to lever those fixed costs that the comp that we're that we're putting out there.

As you understand, the culture of innovation happens not only in our stores, but in every department throughout the organization. That's a quadruple for Eric.

Like in pet, like in the ear piercing. They are a reason for our continued success.

And I hope you're as excited to see it. Our store crew sprang into action.

The value of creating a positive difference extends beyond the walls of our stores and distribution centers and into our communities. David Shepley, Windancer Holdings. No, I cannot imagine what their run states will be, but we will save that for another time. He knows how important execution is to us and how important building out a great people culture. We've been talking about this for the last year when last year, when they said it was going to be transitory. Thank you. Remember, it's an experience. And when you see the store today. Yeah.

But I'll tell you what. But again, as you heard from Joel and we've seen in the past, that's where we do well, and the customer comes back to us because that's where the value really steps up. That works fine for an in-store customer. Chuck Grom -- Gordon Haskett Research Advisors -- Analyst. In fact, we're just the opposite. Having said that, we -- you're not seeing us do free shipping. All right.

And I think I called it out in my presentation. Our young customers are caring deeply about the environment, and it's our turn to do our part to help the planet.

And those states now have a larger store count than our home state of Pennsylvania. Total sales for the fourth quarter grew 16%, and we achieved a 3.4% comp sales increase. Our customers love Five Below, and we are just scratching the surface of the amazing relationships that we can build with them as we continue to learn more about who they are.

Brad Thomas -- KeyBanc Capital Markets -- Analyst. Another example of innovation you heard Joel speak to when he first started. Thank you, Judy.