Five Below, Inc. Common Stock Barclays 19th Annual Global Consumer Conference

Yeah. Good morning, Seth. Good to see you. Good morning, everyone. Thank you for spending the time with us. We've got a lot of great news and a lot of great things to share and talk about. I think for me, if I sort of unpack this, what you're seeing in the business right now is a very clear strategy that was put in place by Winnie Park, our CEO, when she joined just under two years ago. You're seeing proof points that that strategy is resonating quite well. Let me try to talk to you a little bit about that. I think first and most importantly, it is a strategy absolutely grounded in clear focus who the customer is, and I say that because I think that is super important.

We welcome all customers, obviously, to our brand and our franchise, but we are focused on Gen Alpha, Gen Z, and millennial moms and dads. When you have that clarity at your core, you start to design and execute a strategy that resonates with that set of cohorts. The strategy itself is sort of three-pronged. First and foremost, it is about a relentless focus on trend-right, new, interesting product. If you know Winnie's background and you tracked her career, you would certainly see CEO capabilities, but you would see at the heart a merchant and someone who lives for product and who really understands customer. I think the first thing that you would see that she did in her time over the last 18 months is reinvigorate the brand through the product lens.

That means new, that means different, that means trend right, and that has sort of been the guidepost for what we've been doing. I think the second element then is the in-store experience and how do we bring the product to life. How do we create for our customers the treasure hunt and the newness and the discovery that is so important to our brand. The third piece is how do we talk to our customers differently. The marketing muscles that we are building in the organization around better understanding, not only who that customer is, where do they live, and how do we continue to bring our brand to them in that space. All three of these are at different stages in their maturation. All three are contributing to what you are seeing in the results.

I would probably add a fourth piece, which is how we operate as an organization. It is all about collaboration, it is all about agility, and it is a relentless focus on executing against the strategy. We've got a very clear strategy, Seth. We've got a very clear customer we're trying to serve, and we are executing that strategy better. What you see then in the last 12 months to 15 months, and we just posted these results last week, it was our fifth straight double-digit comp quarter. I would argue you could look at it as almost our strongest quarter to date because it was a double-digit comp quarter while cycling a double-digit comp quarter, and in the quarter, we anniversaried pricing, so we didn't have that tailwind behind us.

We are seeing really clear proof points that this strategy is resonating and that this growth is durable.

Sure. This is perhaps one of the more exciting parts to the story is the breadth of growth that we are delivering. What we are seeing here is across all income cohorts, across all demos, across all geographies, across all vintages of stores, we are seeing this growth. It gives you an idea of how widely this strategy is resonating. This new focus on assortment and product and newness is resonating because you just do not see that level of growth across all of those dynamics. We are certainly encouraged with what we are seeing, and I will continue to say it is early in what we are doing. The proof points that we are delivering here, we still see as early proof points as we are starting to build capabilities and durability.

Look, we get this question a lot, and you probably are aware of this specific trend item that Seth is referencing, the squishy dumpling. We were very clear in the earnings call that it contributed about low single digits to our comp profile, and that was pretty consistent in Q1 and Q2. I think if I ladder back, though, I think it is important to understand we are a trend business. We have always been a trend business. We will continue to be a trend business. What is new and different, and this I think goes to the capabilities component I was speaking to, is we are better at detecting the trend earlier than we had been in the past, and we are far better at amplifying the trend when we see it.

If you look at this squishy dumpling item, which certainly has been a great catalyst for traffic driving and brand awareness, I make clear on that. What you see is an item that was in the assortment for a couple of years. This was not a new item that we discovered or someone else discovered and we bought into. It was there. Our ability to detect trend, our ability to scrape online, our ability to listen socially, pointed us in this direction in the fourth calendar quarter of last year. We saw some interesting things around how our customers were engaging with this product. Early detection was key, and then we amplified it. When I say amplified it, that means we, in a very unique Five Below way, brought this product to life.

We brought it to life in terms of the story around the product, which I think is important for us when we think about our brand. We brought it to life in store and how we executed against it. We brought it to life as we widened the assortment and brought newness and new interesting products, which we will continue to do over the back half of this year. Yes, there is an interesting trend item, but I think maybe unlike the past where we may have bought into something and sold through, we see this as an interesting catalyst because we detected it early and we've amplified it in a pretty meaningful way.