These relationships foster innov

2021/05/21

These relationships foster innovation, provide greater efficiencies, and give us more control over our sourcing, creating a more streamlined and efficient supply chain. And we love them all because they do exposes to more customers who then love the brand. And we do this in a fun and cohesive store environment. But, I think what you're going to see today is relatively in line with the size of the box and where we're heading. Well, that equals supporting our growth. We're merchandising, marketing, visual, come together and make everything fun. Thank you, Eric. As you can tell, 2022 has been a celebration of milestones. That's all about controlling our destiny so that we can drive speed, visibility, and efficiency; Fourth, experience. 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. Now, before I turn it over to Joel, we're excited to show you a short video, taking a look back at where we came from. What we don't want to do, though, is go the other direction and become an infant and preschool store. The team worked really hard in '21 to accomplish what we did, and I'm so proud of those results. This year is a little bit different. Made with durable EVA that delivers excellent shock absorption, these slides are waterproof and washable. This later cadence of store openings in 2022 has a significant impact on sales for the year, and unadjusted new store productivity. | . Lazy Beat. For existing stores, we achieved a record $2.5 million average unit volume. I was having this conversation at break with a couple of you. We are the pros are bringing disruptive product that extreme value while always focused on relevancy, whether it's a trend, a craze or new licenses. This was significant leverage, especially for a growth company as we realized several scale benefits. Listen to me. Sales have grown, 10 times operating income has grown 15 times, our operating margins improved 400%. Not only e-commerce, but having some fun with the brand. And with that, I'll turn it back over to Joel. We ended the year with 1,190 stores or CAGR of a 15% on a two-year basis. But all the signs so far have been very positive, considered a pilot at this point in time. It was introduced in 2008, and it was a racetrack layout. Less densely populated than the 50th store. Once again, we grew to nine -- prototype grew and now 9,000 square-feet, and it represents about 30% of the chain. As far as the core customer goes, look, it's really hard to decipher exactly what's happening with the core customer is we're right in the middle of lapping the stimulus from last year. I guess it's relatively linear once you start in '23 and go out to '25. One, where is that today? Amazon reviewers found they ran true to size and take a bit more time to break in. 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.". 14% is a nice uptick from the 13 that you just reported. 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. Look, I think it's also, Ken, why so many retailers and companies for that matter in the last two years haven't given guidance. And we've made some pretty large upgrades over the last few years. So very few new markets. TikTok video from (@slime.acct.comp): "Do you have this slime? "Still, I love to wear mine after a workout at the gym showers. Wow. SG&A expenses of 21%, or about 100 basis points higher than last year, driven by higher store expenses. As a result, we now expect to open approximately 160 stores in 2022. This put Five Below literally just a touch away. Will Five Below Raise Its Outlook This Week? But it's great to see all of you and we are looking forward to having you here. A slight angle stretches from toe-to-tail, which aims to relieve pressure from sore joints while the thick sole lightly grips your feet. Cloud Slide Dupes! And value never sleeps. There's no packaging, there's no box, there's no air. What are the details behind the triple-double? Should Investors Be Worried About Five Below's Sales Declines? And we are very pleased with our initial results. Thank you. We are positively hyped to bring more fun to our furry family members. In summer of 2020, we deployed our Five Below app to complement our dot com experience. I think you also asked about the productivities of the types of stores. Again, yes, so the webcast is officially done now. I'm here to walk you through the details of our long-term vision and algorithm. Thank you. And then just one question around the truck fleet. Now, on to guidance for the first quarter and the full year of fiscal 2022. $5 cloud slides!. 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. One of the best things about Five Below is its name. And we also need to look forward and see if there is any anniversaries or anomalies. We should see, as you would guess, on a 3 to 5 comp, again, the investments that we've made in the distribution facilities and the network that we should see some leverage there. First, just broadly, could you talk about the health of your core customer perhaps by income level? All this growth, and we are just getting started. And as I speak to conversions, recognize these conversions take less than two weeks and we don't close a store to execute them. Ken, outline for you. As you we we started with '22, so we gave our '22 guidance rate a little bit down at the high-end of our guidance. Stories like the one Judy shared happen every day at Five Below. So I'm going to turn it over to them for an overview of our journey to improving our experience. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. This has been true at Five Below since day one. So we feel good about that. Most styles of pillow slides are made from Ethylene Vinyl Acetate (EVA) foam, a light synthetic rubber made of a dense, waterproof foam polymer that has a springy, rubbery feel to it. And we celebrate those rituals of life and milestones of growing up every day. If we do nothing, the current network gets us easily to 2,000 stores. So as an example, here's the view of our oldest market, or DMA in our hometown of Philadelphia. original sound. 11 of those will be right inside New York City. All those teams help us improve our experience. We are going to open a good amount of urban locations this year and the majority of those are going to be in New York City. And as you can see in these photos, they live our purpose of letting go and having fun.

Good morning, everyone. 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. Thank you, Felipe. And then in terms of allocating the capital, as you know, obviously, with the returns that we see on new stores, that's our best investment at this stage to continue to do that. Like in pet, like in the ear piercing. We need a little more time to get through the end of that and see if there's any lingering impacts. And you've heard it from everybody here today, especially Michael, in terms of the products. He's our chief retail officer. It was quite simply, 2020 through 2020. Total sales for the fourth quarter grew 16%, and we achieved a 3.4% comp sales increase. Creating moments and memories like this for Henry are at the heart of our purpose. But I said this when I came into the company, over seven years ago. This is truly going to be an exciting growth opportunity for us. Our continued growth and scale of the business enable us to drive efficiencies with speed and accuracy, moving our product faster through the network. And we've actually been really strong with our efficiency. But one area that really stands to benefit is marketing. We have the option then to add that square footage that then takes you up to the 2,500. Unfortunately, the pandemic really -- we took a step back on being able to open local hosts. We are still a strong growth retailer. Right. [Inaudible], Goldman Sachs. Five Beyond probably going to play a pretty big role in that. The 50% is where it will be this year. Question is, the math, going forward is going to be better on comp? Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. I mean, there's going to be puts and takes as we go through the years. And while that store, that picture you see is only 4,000 square feet, it was a unique concept then. The current distribution network center network can service 2,000 plus stores. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. And our tech world, we have reduced 400,000 pounds of paper and plastic per year with our new cable packaging, which is 100% recyclable. Our first phase was crawl. You have to see innovation. And number two, when you think about whether it's 2025, 2030, how much do you expect the $5 plus price point to be as a percent of sales when we think about that algorithm? Also, about 100 to 110 openings in the second half of this year, including approximately 20 openings in January. Simeon Gutman -- Morgan Stanley -- Analyst. I just wanted to ask a question about the supply chain. Real quick. Right. But the difference is we're not moving on the size of prototype until we have ideas to put in it. But again, I think Michael mentioned the two of the list that we would expect when we remodel the store and go to a Five Beyond is that 500 basis point lift. Let's run the video. We are here with our entire leadership team who are very excited to share with you insights about our business and to meet you. Yeah. We open the most stores ever, 171, to be exact.

I'll say that again. David Shepley, Windancer Holdings. Let go and have fun. [Video presentation]. We think long-term, though, will end up a winner and that as customers turn to value. We've nearly quadrupled the number of stores since I joined. Assisted self-checkout is already available in 60% of our doors and will be chain wide by 2025. That is where everything begins and ends. In addition, during the year, we expect to complete about 45 remodels and about 200 conversions to the new Five Beyond prototype. Cannot believe I found these #cloudslides $5 Dupes at #fivebelow ! David Shepley -- David ShepleyWindancer Holdings -- Analyst. We believe Five Below anywhere. Thanks, Paul Lejuez, Citi.

Michael, went into the details about Bugha. Great question. Following Henry's back surgery, Five Below contacted us after some of Henry's followers called in and shared his video from the hospital. Everyone in this room, everyone that's out there in the Five Below universe has the passion, has the vision, and has the expertise to triple our store base, to double our top line, and more than double our bottom line. And it's playing out very similar to what we thought it would be once we saw the January results. But rather than tell you what you -- what they did, I'll let Henry's mom tell you from her next Facebook post. Experience, it's about connecting, connecting with our customer, our crew and our community. E-com, we think of as icing on the cake, not the cake. But listen, my proudest accomplishment through our last journey was what we've done to build out the broader team. For example, the strong relationship enabled us to proactively secure a multi-year ocean container contracts that cover approximately 90% of our product demand for '22 and '23. "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. It's hard to believe that we're being in person is amazing. They are a reason for our continued success. 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? My basketball also has a number on it. Living our purpose, letting go and having fun, and creating an amazing experience with unlimited possibilities. Second, we know our customers who buy Five beyond product spend two times the amount the typical basket size. A big thank you to this entire group. You're not seeing us try to juice the business for the sake of juicing a business. But we need to have a digital experience with our customer. I don't think we've seen anything dramatic in terms of the shifts in rents recently. It's going to -- the overwhelming majority will be in the existing markets. It's going from a concept based on items on a shelf to the unveiling of a store within a store. And in our proxy later this spring, you'll see a full report. But honestly, I really am excited about what we're going to be able to do with the iteration of what Five Beyond actually is becoming. Over the next few years, you're expecting your per store volumes to approach $3 million. We'll triple our U.S. store base growing from 1,200 stores today to over 3,500 stores by 2030. And yet you will see significant growth opportunities. Log in to follow creators, like videos, and view comments. With that, I'll have Christiane join us back up on stage and she will lead us in a Q&A session. Yeah. There we go. You've got Dollar General with pOpshelf. Rich reports to Eric Specter, our chief administrative officer. Like I want you to think about this for a second. So no matter if you're looking at a store that's based in New York where your rents are higher, obviously the store productivities are higher. So again, we see operating margin moving to that 14% when we get to 2025. And maybe just I'll throw in the near-term any comments on the last couple of weeks you're lapping up against the stimulus that gives you maybe increased confidence? Innovation is about -- Five beyond excuse me, Five Below anywhere is our recent store opening in a working distribution center. [Video presentation] Our founders, Tom and David, would speak to every customer that walked into that original store in Wayne, Pennsylvania. But with landing at a relatively close to flat comp is pretty impressive given what we're up against from last year. Felipe's number is 975, and he'll experience a double during this triple-double vision. Reviewing playdohs super cloud slime!! As you've heard so far today, we will continue to be a high growth retailer. And in fact, Squish even became a craze. Joel talked about going public in 2012. And that's what's so amazing about this brand. And we're constantly trying to, how do we continue to keep this store aging up? It's no small feet what we've accomplished. Don't just think e-commerce, but just think about the experience as it is as good in the stores from that perspective. Eric Specter -- Chief Administrative Officer. And by racetrack we meant easy-in, easy out. Given that we're almost now through -- halfway through the stimulus from last year, I think, you tell me how the war is going to play out, how inflation's going to play out. Cost basis and return based on previous market day close. Ed Kelly, Wells Fargo. And we launched a gaming brand within a champion and himself. Before we break, we're going to run a quick video and then I'll see you back up here in 15 minutes. How do you think that plays out over the three year period? It shows up in big ways and it shows up in little ways. The bottom line, 30%. There's a lot of numbers to absorb. The second iteration was our fresh prototype. It's a spirit that lives in our team every day. This sculpted cloud slide features an elevated 1.7-inch thick sole that's less chunky than other pillow slides, making them look more suitable for everyday wear. He is also -- the stores organization is also in many ways the recipient of, and must execute all, our growth initiatives. What we continue to do is recognize them, we find them and we'll distort them. | This type of slime comes in different colors! Thanks. What other specialty brand, it's not a quiz, but what other specialty brand has those -- marching orders? So the customer changed. Five beyond was simply extreme value items on a shelf. In order to do that, though, you've got to look backwards in order to look forward. 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. And everyone on the slide is going to join me up here in a little bit. Now, I want to turn our attention to our fifth and final driver of our triple-double growth vision. 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. TikTok video from hannah mullen (@hannahamullen): "come shopping with me! #shopwithme #fyp #foryoupage #fivebelow #cheap #dupe #cloudslides #budget #find #indiana #trend #goshop #shopping #influencer". And if that wasn't enough, the design also freed up additional space on our sales floor to allow our merchants even more amazing product. He leads our merchandising organization. Ken, can you talk about the the puts and takes ahead for operating margins? You're ready for this little pun.

As Joel and George noted, we plan to open between 375 and 400 new stores over the next two years. But we're always relevant for way low prices, and we never sacrifice on quality. And when you get to the child tax credit in the back half of the year, that is this big compared to what we're going through now. And that's what's really helped us continue to grow this business. And this has allowed us to capture more market share with key licenses with big companies and big brands like Disney, Marvel, Squish, and Bugha. Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. And I'll show you an example of that in just a moment. And to do that, I want to have Judy Werthauser, join me on stage. We doubled the size of the store to 7,000 square-feet, and keeping this easy in, easy out environment was important to parents at that time. All right. How do we continue to distort value with relevant trends and constant newness? Building out this network has been a $400 million investment over the last four plus years. For 2022, our initial plans were to open 200 stores. 200 conversions that we're going to do. Thanks a lot. All right. Can you discuss the factors for why there's that much uncertainty contributing to that wider guide? Run and grab!! 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". 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? And our goal, Scott, is to continue to keep it that way, that when somebody walks into the front half of that store, it's still large, overwhelming, 90% plus feels like it's Five Below, and that's the commitment.