Five Below, Inc.

Good day and welcome to the Five Below Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star 1 on your touchtone phone. To withdraw your question, please press star 2. Please note, this event is being recorded. I would now like to turn the conference over to Christiana Pelz, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us today for Five Below's second quarter fiscal 2021 financial results conference call. On today's call are Joel Anderson, President and Chief Executive Officer, and Ken Bull, Chief Financial Officer and Treasurer. After management has made their formal remarks, we will open the call to questions. I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and Five Below's SEC filings. The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update our forward-looking statements. You do not have a copy of today's press release. You may obtain one by visiting the investor relations page of our website at FiveBelow.com. I will now turn the call over to Joel.

Thank you, Christiana, and thanks everyone for joining us for our second quarter earnings call. I will review the highlights of our second quarter performance before handing it over to Ken to discuss our financials and outlook in more detail. Then we'll open the call for questions. We continue to operate successfully in a very dynamic environment, staying nimble to navigate the evolving conditions related to the Delta variant and global supply chain. Ensuring the health and safety of our customers and crew remains our priority while also delivering that much needed fun with our WOW product and store experience. Now, turning to the quarter. We are very pleased with our second quarter results delivering sales of 647 million and earnings per share of $1.15. Versus 2019, which is more comparable than 2020 due to the store closures in the first half of the year, sales grew 55% driven by double digit ticket growth and earnings per share grew 125%. For the group of stores that were open in the second quarter of 2019, and 2021, sales grew 21%. Both new and existing stores performed well with record average sales per store. New stores, the fuel of the Five Below growth engine, once again delivered strong performance. In the second quarter, we opened 34 new stores across 19 states, bringing our total open for the first half to a record 102 new stores. Three of these stores in California, South Carolina and West Virginia made the top 25 list of summer grand openings. We now are on track to open 170 to 175 new stores this year and end fiscal 2021 with nearly 1200 stores, leaving us a long runway ahead to reach the 2500 plus total store potential we believe exists in the United States. The teams executed extremely well in Q2. Our merchants did an amazing job sourcing WOW products and capitalizing on current trends to bring our customers the items they just got to have. The supply chain team worked diligently to ensure the stores were stocked with these TrendRight products while managing through the ongoing global supply chain disruption. Our store teams also delivered these results while operating with fewer hours than in the past and very little marketing. Overall, the team continued to focus and make progress against our three key strategic priorities of product, experience, and supply chain, which I will now discuss in more detail. For product, we continued to see broad base strength across our worlds on both a one- and two-year basis, especially in the sports, tech, candy, room, and style worlds. Customer trends were broad and diverse. For example, renewed interest in sensory items emerged, including popular new fidget toys called Poppers. Our pet business remained strong, as did the gaming products we launched through the collaboration with Booga last year. We love trends, as they drive traffic and bring in new customers. We have the unique ability to participate in almost any trend through our eight worlds and the flexibility within those worlds enable us to adapt to ever-changing customer preferences. All of these are key distinguishing features of our model. Back to School kicked off at the end of Q2 with amazing products and featured a seasonal Five Beyond Wow wall in all our stores. Our merchandising team sourced some great value products like denim jackets, flannel shirts, and backpacks for the new school year. We are very pleased with our performance through August. The extreme value Five Beyond section in our new prototype store allows us to offer products in categories we previously would not have been able to sell in our stores. With approximately 40 to 60 SKUs in the permanent section of a Five Beyond prototype store at any given time, the offering, although relatively small, provides an opportunity to acquire new customers and drive additional sales. Approximately 270 stores featured the 5Beyond section of the back of the store at the end of Q2, and we expect about 30% of our chain to offer 5Beyond by year end, with approximately 50% of the chain by the end of 2022. The merchandising team is looking forward to continue to delight our customers with new extreme 5Beyond products, as well as products priced $1 to $5. On experience, our second strategic priority, we relentlessly look to enhance the in-store and digital experience for our customers and crew. Five Beyond is an example of the innovation we are creating in this area, as is Associate Assisted Self-Checkout, or ACO as we call it. ACO offers both customer experience benefits as well as store operational efficiencies. We remain on track to offer ACO in over 60% of the chain by the end of this year, and eventually be in almost all of our stores. Separately, as it relates to the experience for our crew, we recently completed upgrading our human capital management system to the new Workday platform. Since the end of 2016, we have more than doubled our workforce, and this new platform is another great example of our investment in robust enterprise systems to support our continued growth. Under digital experience, we include marketing and e-commerce, which are both focused on increasing our brand awareness and acquiring as well as retaining new and existing customers. We shifted marketing from Q2 into Q3, as we mentioned on the last call. And the very small amount we did in Q2 was focused on paid search and social campaigns, which we believe were successful. Digital continues to be an effective and efficient platform to reach customers, both new and current. As for e-commerce, we are focused on growing the number of new customers while also increasing the percentage of repeat customers. In addition, we expanded the partnership with Instacart for same-day delivery to now reach the entire chain. We believe our presence on Instacart is an effective brand awareness and new customer acquisition tool, as well as a convenient service for our customers. On to our third strategic focus, supply chain. We are very excited to announce the opening of our Arizona Ship Center. We began shipping our stores from this facility at the beginning of the third quarter, which will help us better serve our five below stores out west. E-commerce fulfillment in that center is expected to begin later in Q3, which will also contribute to more efficiency and sending packages to customers out west. In addition, the Indiana Ship Center, which is planned to open in the summer of 2022, is under construction and will complete what we believe to be the optimal distribution center network to service over 2,000 stores. While focused on achieving our longer-term objectives within supply chain, we have also continued to manage through the current global challenges and rising costs resulting from the pandemic. We expect these conditions to persist through the balance of fiscal 2021, and our teams are staying nimble and innovative as they continue to navigate the tight supply chain environment. In summary, we are very pleased with the results from the second quarter. As we begin the third quarter, We continue to see strong momentum in our overall business. We are playing offense, pivoting, and flexing as we execute with discipline. And we are making the right investments across our priorities of product, experience, and supply chain to support our high growth. Additionally, we are focused on the all-important fourth quarter and are excited to showcase great new product, including the Holiday 5 Beyond Wow wall. We will continue to listen to and work back from our customers to find those gotta-have, trend-right products at extreme value and all packaged in a fun and amazing shopping experience. With that, I'd like to turn it over to Ken for the financial discussion. Ken?