Five Below, Inc.

Good day and welcome to the Five Below First Quarter 2022 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 Pels, Vice President of Investor Relations. Please go ahead.

Thank you, Gary. Good afternoon, everyone, and thanks for joining us today for Five Below's first quarter 2022 financial results conference call. On today's call are Joel Anderson, President and Chief Executive Officer, and Ken Bolt, 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 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 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 first quarter. 2022 earnings call. When we last spoke at our investor day in March, we unveiled our vision for future growth, the triple-double, and characterized 2022 as a unique year within that framework, given the lapping of stimulus and ongoing macro issues, including record inflation, the war in Ukraine, and continued lockdowns in China. While 2022 is indeed proving out to be a unique year, The customer response to our new prototype has been overwhelmingly positive. We remain excited about our future and are focused on execution to convert our store fleet to the new prototype. Key initiatives related to this rollout include opening all new stores in the Beyond format, executing store conversions, and adding new products and services to celebrate rituals, and milestones to further enhance the store experience. Now, on to the first quarter. The first quarter was challenging from a sales perspective as we had to anniversary the impact of stimulus amid the uncertain macro environment. While sales in April came in softer than expected, we effectively managed costs and delivered solid bottom line results in line with expectations. Total sales in the first quarter grew 7%, over last year to 640 million, while comparable sales decreased 3.6%, driven by a decline in both basket and transactions. We delivered diluted earnings per share of 59 cents, driven by strong cost discipline. Our key growth driver, new store growth, continued with 35 new stores opened across 23 states. The new store in Albuquerque, New Mexico ranked in the top 25 spring grand openings of all time. Other highlights of the first quarter include opening our 1200th store in Union Square, Manhattan, and two other stores in the New York boroughs, as well as a new store in downtown Chicago. During the first quarter, we also continued to make progress across our strategic initiatives of product, experience, and supply chain. On product, one of the key distinguishing features of our model is our team's ability to recognize trends and capitalize on them quickly. The flexibility of our model with our eight worlds and ability to quickly shift is what makes the Pablo concept so unique. During the quarter, our merchants stayed on top of the Squishmallow trend. We spoke about previously sourcing new edition Squishmallows for our popular Squish Sunday events. which our store and marketing teams featured on social media and in-store marketing campaigns. The strong performance of the Squish trend drove outperformance in the sports world, while our candy world benefited from novelty candy, snacks, and drinks. Pet also continued to be a strong category in the room world. Turning to our second initiative, experience, as I outlined in my opening comments, we are excited about the latest prototype unveiled at our Investor Day. This newest model features a Five Beyond destination, our store within a store concept, which showcases reimagined tech and room worlds, while also doubling the SKUs dedicated to Five Beyond. As we mentioned at the Investor Day, we are planning on converting over 750 of our current stores into this latest format over the next four years. Our mission is to bring Vibe Beyond everywhere. In 2022, we are on track to convert over 200 stores to the new Beyond prototype. Regarding the digital experience, we focused on developing deeper connections with our customers and communities while better engaging our crew. Through more effective digital marketing, we are growing brand awareness, and are gathering data on our customers to better understand and market to them. We are also focused on enhancing the customer experience even further by letting them experience Buy Below in the way they want. And to that end, we are working on a BOPUS rollout this summer. Moving on to our third strategic priority, supply chain, Recall that we spoke in detail about the theme of controlling our destiny on Investor Day. While this area continues to be challenging, given the impacts of lockdowns in China, our teams remain nimble, putting us in a great position to flow the majority of our expected product into the ports, distribution centers, and our stores. This is a great example of how focused we have been on execution I am extremely proud of the progress we made. We were proactive in our approach from securing additional container capacity to adding to our truck fleet at the ship centers. We have improved our inventory in stock position significantly since the beginning of the year and have the freshest inventory since I joined Five Below. This sets us up nicely for the second half and allows us to take advantage of closeouts and one-time special buys that have already begun to emerge. As it relates to our distribution infrastructure, we are very excited to officially open the Indiana Ship Center this summer to further gain efficiencies and speed to our stores and ultimately our customers. As a reminder, after we open this distribution center, which will enable us to service approximately 90% of our stores within one day, we will have completed our five node network. We will then take a pause from opening distribution centers for a couple of years. The entire supply chain team has made great progress to set us up to serve incredible value to our customers this upcoming holiday season. In summary, we remain focused on our growth strategies with disciplined investments in people, systems, and infrastructure to support the execution of our future growth. Growth is at the center of our long-term strategy, and throughout the organization, our attention is solely focused on execution to deliver our triple-double strategy. We now have full line of sight on delivering our goal of approximately 160 stores in 2022, and have made significant traction on our 2023 goal of opening over 200 stores for the first time ever. Our scale continues to benefit us and our customers as we continually reinvest in WOW products and provide the fun experience they expect from us. We are also poised to take advantage of dislocations in the marketplace, including merchandise and real estate, and will aggressively pursue the opportunities we are seeing which we expect to grow given the current environment. While the pressure is facing some of our customers due to the reduction in stimulus in the current inflationary environment weigh on our near-term results, history has taught us that consumers will seek out value even more when times are tough. And nobody is better positioned to deliver fun at outstanding values than Five Below. With that, I will turn it over to Ken to provide some more details on the financials.