Five Below, Inc.

Good day and welcome to the Five Below Third 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 then one on your touchtone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Christiana Pelz, Vice President of Investor Relations and Treasury. Please go ahead.

Thank you, Gary. Good afternoon, everyone, and thanks for joining us today for Five Below's third quarter 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 release, in the press release, and our 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. If 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 buybelow.com. I will now turn the call over to Joel.

Thank you, Christiana, and thanks, everyone, for joining us for our third quarter. 2021 earnings call. Before I discuss the specifics of our third quarter, I want to share my appreciation for the many teams throughout our organization that produced such phenomenal results, which far surpassed our expectations and set records for Five Below. In a period where the global supply chain environment continued to be very difficult, our teams were proactive and nimble, sourcing cool, trend-right products while working diligently to ensure merchandise got to our stores and onto shelves in a timely manner. I'm proud of the team's execution, hard work, and agility, which they have consistently demonstrated throughout this extremely challenging and complex year. I'm also grateful to the hundreds of vendors whose partnership and collaboration continues to help fuel our success. As you will hear when I discuss the underlying drivers of our third quarter financial results, Our performance also demonstrates the inherent flexibility of our model and the universal appeal of Five Below. We offer incredible WOW products at outstanding value with an amazing shopping experience that resonates positively with our customers. Now, on to the results. Total sales in the third quarter grew 27% over last year to $608 million, are 131 million higher than last year's third quarter. Comparable sales increased 14.8%, driven by transactions, and it was our highest comp of any quarter since going public. We also achieved the highest average store sales for a third quarter in our history. Operating profit grew 75%, leading to earnings per share of 43 cents. New store growth and performance continued to be strong in the third quarter. We opened 52 new stores across 24 states, bringing our new store openings to 154 at the end of the third quarter. The new stores are located in diverse areas across the country, ranging from established markets such as the Philly Metro Market to new states like New Mexico, which we entered in September. Five of these new stores, from Jersey City, New Jersey to Moreno Valley, California, made our top 25 summer or fall grant openings. Including the 17 stores we have opened in the fourth quarter, our new store program for 2021 is now complete, bringing us to 170 net new stores for a total chain store count of 1,190 stores in 40 states. During the third quarter, We continue to make progress against our strategic initiatives of product, experience, and supply chain. On product, as you know, it all starts with delivering our customers value and an assortment of those gotta have, trend right products in a fun, safe, treasure hunt shopping environment. That is who we are and what we do. And you saw that reflected in our Q3 results. The ability of our teams to recognize trends and capitalize on them quickly is a key distinguishing characteristic and strength of our model. This is the wow that makes the Five Below concept so unique. We were very pleased with the broad-based performance across our worlds, and especially the outperformance in the sports, room, candy, and create worlds. The merchants worked closely with our vendors to source some incredible products, And I want to again thank them for being such great partners. To that end, the sensory trend, which we mentioned on our last earnings call, continued throughout Q3. In addition to poppers and fidget toys, renewed interest in squish models emerged as teens and tweens collected them in all new shapes and sizes. Our merchandise and supply chain teams quickly sourced fresh merchandise which was particularly impressive given the global supply chain environment. And our store and marketing teams had some fun coming up with compelling social media and in-store campaigns to feature them. During the quarter, as expected, back to school and Halloween returned to more normalized seasons with backpacks and stationery items, including art supplies in demand, along with candy for Halloween. In addition, gaming kept growing as a trend, and we are really excited to continue to offer an exclusive line of gaming products under the Booga brand. As a reminder, last year we entered into a collaboration with Booga, the 2019 Fortnite World Cup champion, to bring affordable gaming products to the masses. The line continues to expand and represents great quality and incredible value while reinforcing Five Below's position as the destination for teens and tweens. Turning to our second strategic initiative, experience. We continue to innovate both in-store and digitally to enhance the customer experience. In-store, our go-forward prototype with Five Beyond sections in the back of the store is in about 30% of our stores. The seasonal Five Beyond wow wall featured back-to-school items during the third quarter such as a study from home desk and a studio ring light, both for only $10, which are two great examples of the incredible wow and value we are delivering. We also mentioned how assisted checkout, or ACO as we call it, has really helped with the customer's experience as throughput is much higher than our traditional checkout. We added over 100 ACOs this quarter, bringing our store count with ACO to approximately 60% of the chain. Also new to the checkout experience is the addition of Venmo and PayPal as payment options, which are now available in all our stores. Another enhancement to the experience for our customers is the Instacart partnership that we rolled out over the summer. We are attracting new customers and getting positive feedback on the experience of shopping buy below in this manner. We believe that this is a service, is a value add to our customers, especially during the busy holiday season, and is even more beneficial after the e-commerce shipping cutoff. On the digital experience, we continue to grow our e-commerce operations. We are excited to have opened our third fulfillment center, which is located within our Arizona Ship Center, and we shipped our first e-commerce commerce order from there in September. Having this additional fulfillment capability will greatly enhance our efficiency, speed, and ability to meet the high demand during the fourth quarter, especially for our customers in the western states. We are attracting new customers to buybelow.com through both our digital marketing and Buy Below in-store experience, while also growing repeat customer visits. Our digital marketing brings to life the fun and value that Five Below is all about. For our third strategic priority, supply chain, we continue to proactively manage the ever-changing environment while growing our distribution network. This has been a challenging year for supply chain, as you certainly know, but I am extremely proud of how well the teams have managed through it. From securing additional container capacity to adding our own truck fleet at our ship centers and implementing transloading, the team has done an outstanding job thinking out of the box and being proactive and nimble. As of today, we have received the vast majority of our holiday inventory and believe we are in a strong position to deliver our customers a great assortment of gifts, stocking stuffers, and more. This year, having the Arizona Ship Center open will drive additional efficiencies in getting products to our stores, and we expect the opening of the Indiana Ship Center next year to further enhance supply chain capabilities. Now I'd like to turn to the all-important holiday season. We are pleased with a strong start to Q4, including the Black Friday weekend. This is our 20th holiday season since Five Below was founded in 2002. And while today we now offer more than stocking stuffers for the holidays, what has not changed is a customer promise of wow and value, which I hope you will experience firsthand when you shop our stores and online. Our teams have worked hard throughout the year and combined with the investments we have made in key strategic areas, we believe we are well positioned to meet demand while providing customers a safe and exciting shopping experience. You may have seen our press release highlighting seasonal and holiday gift ideas ranging from tech items for gamers to Disney character toys and pet products. We also have WOW holiday products like a four-foot Christmas tree and decor, matching pajamas, bottoms, and slippers, including for the family pet. and tech items such as selfie kits to help customers with their social media presence, all for $5 or less. We have been communicating our holiday campaign largely through digital content, which reaches nearly every market. In addition, we were thrilled to recently be featured on two nationally syndicated TV shows, The Balancing Act with Montel Williams and The Ellen Show. For The Ellen Show, we formed a partnership provide support for several kids and their families. Tomorrow we begin the 12 Days of Christmas with Ellen, so be sure to watch. In addition, our Five Beyond Wow Walls for the holiday are merchandised in all stores with extreme value gifts like a $12 telescope and a six-foot basketball hoop for $25. This is the third holiday with the Wow Wall. And we are very pleased with the results thus far. We believe that having these higher value items helps our customers with their holiday shopping as we become more of a one-stop shop for holiday gifting. With the combination of fun gifts, stocking stuffers, and the new Five Beyond products, along with more stores featuring assisted checkout registers, as well as our enhanced distribution capabilities, e-commerce and Instacart, we are prepared to give our customers an amazing shopping experience this holiday. So, in summary, it was an outstanding third quarter as we continue to grow the Buy Below brand, expand our footprint, and delight our customers, while also navigating the challenges of the current supply chain environment and preparing for the all-important holiday season. We believe a key driver of our success is our customer mindset. We think back from the customer in everything we do, which drives our associates to operate and plan with the customer at the top of the list. Flexibility, innovation, and operating discipline are also hallmarks of Five Below, which have served us well, especially in the last several quarters. We remain laser focused on providing extreme value for our customers and consistently executing our growth strategies while we build for the future with 2,500 plus stores. With that, I will turn it to Ken to provide more details on the financials. Ken?