But Felipe talked about it in detail [Inaudible] what what he said. So there's a lot of foundational things that honestly, we're just doing it the right way so that when we do it, it's just not a program, but it's something that really the customer gets excited about. Our payback period will remain well under a year. As it relates to the trends, I remember one, there's this trend called frozen happen. Sure. And you're going to get to see it later in action on the store tour with Tom and Dalia. Following Henry's back surgery, Five Below contacted us after some of Henry's followers called in and shared his video from the hospital. 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. If you buy through our links, we may earn a commission. And then you have the conversions also just to go from a Five Beyond to this new Five Beyond prototype. And we've come all this way, really with just transactional and as he would call it, anonymous data. I know it's not about margin, but is there scope for that to be better over time, gven some of the positive things happening on the top and the bottom and the margin? We believe in that deeply. And it truly, as Michael said, we have migrated from items on a shelf to a store within a store concept. u can hold my hand. And Addai and Todd will call out certain areas where we've actually made the store much more efficient. And as they say, a picture is worth a thousand words, a video must be a million. We distort them. 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? Who's Ready for a $192 Per Month Increase to Their Social Security Check? As you can tell, experience is at the heart and soul of everything we do. It's about the age of everybody in this room. I'll continue with this table, Chuck and then Matt. I would remind you though, this is not the Academy Awards, this is the Investor Day. We also leverage our qualitative and quantitative understanding of our customers as a key input into how we design and deliver amazing experiences for them. Just could you maybe talk to us about the cadence over the next few years about how you plan that? This article is a transcript of this conference call produced for The Motley Fool. So far, you've heard Michael speak to the relevancy of our products, and the flexibility of our eight worlds while that equals growth. Cloud slides finally found one closest to the real thang found at. Just like I talked about Five Below anywhere, we also recognize our growth strategy is about "Five Beyond Everywhere". We've learned and are executing on our ability to densify suburban markets. Our future vision is called the "Triple-Double". Balloons on a budget? And over the next ten years, we grow our store county in Philly an additional 30 stores. David Shepley, Windancer Holdings. -- We just open the new Union Square a few weeks ago and you're going to see us open in Times Square this year. It's easy to shop. It's actually rent going the other way. Hi. We look at this as a strategic investment by purchasing our distribution centers and investing in technology and automation. Will Five Below Raise Its Outlook This Week? The fresh prototype was introduced in 2017. We're going --. Music For a Sushi Restaurant. We also added e-commerce fulfillment capabilities at three of our distribution centers to support our online customers. That said, he warns that pillow slides are not designed to withstand running or walking for prolonged periods, especially on uneven terrain as they are "open-toed and lack sufficient ankle and arch support." We continue working with leading analytics firms to help define our future growth. And I see that constantly. And we're going to hit a thousand stores in that period of time. And as we continue to scale outside our home base of the Northeast, we are encouraged by our new store opportunities. Weve been independently researching and testing products for over 120 years. But shockingly, what are we about a quarter over 100,000. Speaking of people, we hired Rich Tannenbaum. So again, we see operating margin moving to that 14% when we get to 2025. It was a record year for us in a very tough macro environment. We see the stores starting off at a 2.2 million productivity in the about 25% EBITDA. This is truly going to be an exciting growth opportunity for us. So we feel good about that. This later cadence of store openings in 2022 has a significant impact on sales for the year, and unadjusted new store productivity. Hi. We've got a phenomenal real estate team. And if you look at some of the things we're talking about, right, the drivers, we got a 3% to 5% comp that we're looking at in those years, '23 through '25. It's one of the very reasons George, highlighted Philadelphia as an example, where we're going to densify that from 60 to 120 stores. Thank you, George. And as I said at the beginning, it's all about five drivers, innovation never standing still. OK. Reviewing playdohs super cloud slime!! Joe Feldman -- Telsey Advisory Group -- Analyst. And by racetrack we meant easy-in, easy out. But if we're going to continue to grow, it always starts with people, right? [Video presentation]. And I want to share a fun fact. We had to get color style, size done, so that we could really deliver on that. You're ready for this little pun. Or a store, say, on Flowood, Mississippi, again, a pretty tight range in terms of EBITDA margins there, but that's what we expect going forward. And let me tell you something, we're going to continue to be a high growth retailer. Our plan is to open 375 to 400 stores over the next two years. That's what we do at Five Below every day. I love to say it. I know you mentioned the opportunity for adding a million more square feet to your existing DC network. Christiane? Those sales, well, they grew on a six-year CAGR 23%. You're going to have the opportunity today to interact with all of them. To kick off our program, please welcome our vice president of investor relations and treasury, Christiane Pelz. And we look back to during the pandemic, we saw a lift in the business and really we saw it across all different types of stores in all areas and all locations. Well, that equals supporting our growth. This put Five Below literally just a touch away. We see Five Beyond as a significant part of our growth strategy and an unlock to help us grow comp store sales. We're only going to be up here for an hour and then we'll take a break and Ken and I will come back for guidance and a Q&A session. But that's what we expect to happen. Good morning. You know, it is the eight rules that I just spoke about that have given us the license, the freedom, --- the ability to celebrate the rituals of life and milestones of growing up. She's been with us since 2019, and her number is 755. But I think what you'll see in the store today will give you a pretty good sense that he hasn't run out of ideas. And as we've created Five Beyond, one of the the impacts of it is, how do you keep it separate and segregated? We're going to grow the top line 20%, and we're going to grow the bottom line 20% plus. We're -- we didn't have color style size before that's a key driver to it. All right. Pair them with loungewear or an activewear set, and you've got an elevated but cozy look. Having said that, we -- you're not seeing us do free shipping. We are the S store filled with fun that makes us smile. I was hoping you could share some more detail on your customer demographic by age. But this story isn't just about story unit growth. Ed Kelly, Wells Fargo. I'll take this one. But it's all accounted for in the guidance. Yeah. And while Ken needs no introduction, as everyone in this room and online knows Ken, he's been with us since 2005. So let me be really clear. Thanks, Michael. And so, our guide gives you a range of potential outcomes. But the best part about it is every time there's a new trend, it gives Michael's team the license to go after that trend. And our expectations for annual performance in fiscal years 2023 through 2025. There's a lot of numbers to absorb. Second, we know our customers who buy Five beyond product spend two times the amount the typical basket size. At the high end of our guidance, operating margin is assumed to be relatively flat year-on-year. But look, we put it on the slide. Is there risk that you're going to see diminishing productivity of your boxes as you grow? Remember, it's an experience. Honestly, that's pretty impressive for what we've now achieved. Behind me, you'll see a deflated basketball. The S trends, well, they're the strongest in our history. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. But we need to have a digital experience with our customer. This plan has us opening another 1000 stores in just four years, and we couldn't be more focused, more determined, and more encouraged to do exactly that. And here's how. One of the best things about Five Below is its name. Connected to our purpose to let go and have fun, our five values that we live by every day. Like Joel spoke earlier with the restaurants, squishmallows, slime licker and sensory toys. In addition to supply chain, Eric also leads our planning and allocation teams as well as real estate. Last year, Henry, who is from Minnesota, had to have back surgery. They provide a much bigger opportunities than we had first originally planned. And we are going to be up against some pretty significant trends out there that we had last year. But look, we we will probably continue to evolve the size of the prototype. Our store crew sprang into action. Yeah. I'll take that one. If you buy through our links, we may earn a commission. And I promise you, you will not be disappointed. 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. 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. Yeah. They've been around for longer. Yeah. All right. TikTok video from THAT GIRL (@_bitchonabudget_): "Five below finds #fivebelow #fivebelowfinds #cloudslides #birkenstocks #savemoney #fivebelowmusthaves @Five Below". Give us that flexibility to give that constant growth and innovation. And that's just to name a few. And I couldn't be more proud of the entire merchandising organization for what they've done to create Five beyond. In order to do that, though, you've got to look backwards in order to look forward. And those reductions in rents have really opened it up. So I think that's the sum of the drivers in the combination of that as we're going forward. 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. We imagined new trip occasions and new rituals to celebrate. 171 new stores and 45 remodels, and investments in systems and infrastructure. It's a tradition at Five Below. We'll start with a quick review of Q4 and fiscal year '21, and then Joel will introduce our growth vision for 2025 and beyond. This may be more for Michael, but what are you guys displacing? Ken, can you talk about the the puts and takes ahead for operating margins? There are five drivers; First, innovation. How do you think that plays out over the three year period? Once again, we grew to nine -- prototype grew and now 9,000 square-feet, and it represents about 30% of the chain. Take note: The brand recommends not leaving these out in the sun to prevent aging and shrinkage. And with that, I'll turn it back to Joel. One, just curious, how are you thinking about rent? Creating moments and memories like this for Henry are at the heart of our purpose. 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. Yeah. I'm going to ask Ken Bull to join me up here to look at these results. Five Below was created for tweens and teens. But based on our guidance, you can see how we feel about where we are so far, guiding to that flat to negative two, up against some pretty significant payments and impact that you all remember from last year's first quarter. Most of you know Michael. Are there any questions online that we'd like to ask? With over 75% of that growth coming from new stores. And we'll continue to invest in the foundation business to be able to grow it. And our stores well they're up 6 times. There are a few. George? And it was also our first attempt at creating an environment that delivered on our purpose. Third, there are ongoing inflationary pressures, especially, and most recently, fuel costs. We haven't seen anything on top of that. As you've heard so far today, we will continue to be a high growth retailer. First, we expect mid-single digit lift for all our remodels to the Five Beyond prototype. Can you talk about the mix of those stores, whether it's new market versus existing market? Really great to see everybody live and in-person. Ken, you want to discuss margins, then I'll take on the loyalty. So I'm wondering why not move a little faster on that? At the time, we believe we could grow this market to about 20 stores. Brad Thomas, KeyBanc Capital Markets. And it's been on time and on budget, and it's been a massive unlock for the service to our stores. Christiane Pelz -- Vice President, Investor Relations. One of our leaders discovered a post Henry's mom made on Facebook while he was in the hospital. That's the -- lower end customer is the one is probably going to be the most stressed, right, from an inflationary standpoint. 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. I mean, there's going to be puts and takes as we go through the years. 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? We're about two weeks into it versus when that third payment came out. Total sales for the fourth quarter grew 16%, and we achieved a 3.4% comp sales increase. So thank you, Joel. And then when you look at SG&A, it would be on the fixed cost components of SG&A where we see that leverage. $5 | . Backyard Boy. With that, I'll have Christiane join us back up on stage and she will lead us in a Q&A session. OK. Great. And so I -- that's a scenario that could happen. And I think, look, nobody's been through this inflation. I think we've talked about it a little bit today. We've done some great things with new fixturing, so you'll see we actually haven't displaced classifications. And yes, there is a little bit of a dispersion in sales in that group, existing stores between densities, populations and different factors. We focused on disciplined profitable growth. This is also an example of how we will realize our overall store potential now and again, over 3,500 stores by 2030. He is also -- the stores organization is also in many ways the recipient of, and must execute all, our growth initiatives. Wow. Michael's extremely passionate, more passionate than me. That means Five Below cares about the future of the planet. We are stronger than ever. The second iteration was our fresh prototype. Scale is a huge benefit for us throughout the entire organization, whether it's talent, whether it's vendor relationships, whatever it is to really help drive down those costs. AT FIVE BELOW | CLOUD SLIDE I was a little bit active participation. We also completely reimagined the checkout experience. We've continued to push into smaller markets. original sound. It was built on a foundation of incredible value in a fun treasure hunt experience. We usually pretty much deliver what we say we're going to do. *Average returns of all recommendations since inception. And we love them all because they do exposes to more customers who then love the brand. We're about cool stuff, an amazing product and all that innovation which keeps us going. And it really takes a lot of the unknowns out of the equation. Good question, Chuck. In summer of 2020, we deployed our Five Below app to complement our dot com experience. And I'm going to provide you context, more context and what this really means. In fact, in 2022, we'll open 15 new stores in urban markets. I want to recognize that there is also a lot of people with us online, and I thank you for also joining us. But now let's turn to the supply chain. Ken and I, been doing this so long together, we just finish each other's sentences. That's a double for George. But we have a lot of options there. In fact, I give a big thank you to our entire Five Below crew. Our focus on building an incredible experience in each store we operate, and each community we live in, starting with our crew, is a huge differentiator for us. But for the most part, there's there's a pretty -- you're going to see a couple of years pause now on the need to build any distribution centers. Didn't you just love that video a few months ago? Yeah. Getting your ears pierced? Squish and sensory and slime lickers all at the same time. Thanks. Yeah. Our internal challenge to go beyond and think big, and work hard, have fun, build a career where we commit to creating possibilities for our hardworking crew. And I see no reason why that wouldn't be the case this time as well as there's a customer seeks value. ITS NOT TOO GOOD TO BE TRUE. Thank you. Thank you, Ken. What a milestone today is. It's 331. Like if you think about tech, as a specific example, you know, our iPhone chargers used to be this big and while Michael's team shrunk it, you'll also now see wireless in there. As Joel noted, 2021 was an amazing year for Five Below. Five Below (FIVE) Q1 2022 Earnings Call Transcript. They are the ones that constantly unleash their power and passion so that we can achieve the impossible every day and wow our customer. At the end of the day, with all the uncertainty in the world, we are taking control of our own destiny. It's a measurement of how we deliver amazing experience to our customer. It's hard to believe that we're being in person is amazing. And this all led to an operating margin of 18.8%. That's a quadruple for Eric. OK. Hey, honestly, I couldn't be more excited about the opportunity. We can play offense. Today, the feds were unveiling is walk. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. They helped us play offense. Good morning, everyone. These relationships foster innovation, provide greater efficiencies, and give us more control over our sourcing, creating a more streamlined and efficient supply chain. And so, we all know how each other work. For example, we've been able to reduce the average distance to our stores by nearly 40% over the past several years. You may be able to find more information about this and similar content at piano.io, These Are the Most Comfortable Shoes You Can Buy, 19 Popular Stores Where Teens Actually Shop, This Amazon Brand Has Amazing Kids' Summer Wear, Weve been independently researching and testing products for over 120 years. [Inaudible] with Jefferies. Eric Specter -- Chief Administrative Officer. And then two, what countries do you expect to be of greater emphasis going forward? And with what we put up on the board there today, you can tell we're ready to accelerate. I like to say, "Wow me now." And we think, again, that's that's pretty healthy. Many things have changed. So really, how we're going to see that happening, you're probably going to see the leverage happening in both gross margin and down in SG&A, as we should have the ability to lever those fixed costs that the comp that we're that we're putting out there. So I'm going to turn it over to them for an overview of our journey to improving our experience. This is what we think of internally as a semi-rural surprise. When you look at your downside modeling, how do you think of the business in a very aggressively negative or in a recession environment? So it's not. So let me start with the meaning of culture of innovation, and then I'll turn it over to the team for the remaining four drivers. We also plan to open approximately 550 to 600 stores in store in fiscal '24 and '25 combined. As as the success of our brand and our value offering continue to grow, in 2012, we are proud to say we opened our 30th store in the Philly market. --. We've broken the $5 price point, that is all contained inside of Five Beyond. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. I -- just to add, Chuck. For Q&A, we have Andrea and Elsie both with mics. I hope you enjoy it. And we just haven't run out of ideas, and we just keep getting better and better at developing an amazing experience. And there's very few retailers that can go at that breadth of a trend. And we're going to make sure we continue to be competitive and we get the appropriate talent out there from a wage perspective, you probably heard us talk about last year, we increased our wages toward the -- end of the year last year. And what's amazing is that we're in-person, right? Don't just think e-commerce, but just think about the experience as it is as good in the stores from that perspective. @bexilacungan #fivebelowfinds #fivebelow #fyp #shopping". Supply chain, we're going to control our destiny. Identify more opportunities for Five Below anywhere across the US. There's no packaging, there's no box, there's no air. New stores will continue to be the main driver of our growth. But we're always relevant for way low prices, and we never sacrifice on quality. Making the world smarter, happier, and richer. I think Henry has become a customer for life. You've got to be able to order from us and get what you ordered and get it in a timely basis. This year marks the 10th anniversary of that celebration, and what a celebration it was. And ultimately we see these efforts coming together underneath our Five Below loyalty program by 2025. It's about brand awareness. And finally, the most exciting part of the day is we're going to finish with a tour of our new store, our new prototype. You know, over 23 million pet adoptions happened during the pandemic. Hi, Michael. We ended the year with 1,190 stores or CAGR of a 15% on a two-year basis. Listen, I will say this. It is exclusive relationships that really allow us to create and bring our own direct to retail items. Any last question before we wrap it up? And third, we have seen 50% higher units per transaction. We are -- we have begun to implement engineered labor standards to drive additional productivity activity increases to help offset rising wages. So really, I think what you're looking at is, there is a little bit more of an uncertainty and just a little bit wider range than we normally do to be able to cover that. Two questions. What we don't want to do, though, is go the other direction and become an infant and preschool store. You're not seeing us try to juice the business for the sake of juicing a business. Matt Boss, J.P. Morgan. Now, speaking of service, let's turn to our fourth driver, the experience in our stores and on digital. That's one of the things that I called out. And as I share these results, we will do that and then turn to our future growth vision. 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.". Which was driven both by an increase in transactions and ticket, and which was on top of last year's record fourth quarter comp increase of 13.8%. And growth, we've got Five Below anywhere, and Five Beyond Everywhere. Our purpose and values drive a highly engaged team, and we're really proud to say we are in the top quartile in overall satisfaction, according to Gallup. | FIVE BELOW | come shop with me for: | . back when I was younger 3.3K Likes, 37 Comments. We're like, "Oh, just let go." Whether it's a new store or a comp store, whether the customer is new to the brand or has been with us for years, whether they're digitally native or brick and mortar centric. And everyone on the slide is going to join me up here in a little bit. Are you seeing better deals as you're expanding the stores at the pace that you're opening? And as an added benefit, which is going to save about $1 million per year in freight and packaging on just this one item. You have to see innovation. "Still, I love to wear mine after a workout at the gym showers. So that's specifically talking current 2022. But like always, we keep those under our hat until they take off for obvious reasons. I just wanted to ask a question about the supply chain. We invested in music. In order to drive our triple-double. So, you don't really see a huge dispersion around the performance of stores based on the type in some way or some other factors that are that are impacting it. So we're going to give you a quick sneak peek of what you're going to see this afternoon on the store tour. We expect the second quarter to be the easiest comparison of the year with operating margin declines moderating from first quarter levels. Its durable, anti-slip sole also makes it a great option for your next gym or spa excursion. Is there a goal in mind in terms of how much of that you'd like to own? With several stores exceeding our initial sales volume expectations, as an example, our Flowood, Mississippi store, ranked in the top five overall stores for us and total volume last year. And it's one of the groups that actually the reopening from the pandemic benefited pretty significantly. And we'll see where we can go from there. We opened a record 17 new stores in the fourth quarter. The value of creating a positive difference extends beyond the walls of our stores and distribution centers and into our communities. Log in to follow creators, like videos, and view comments. Sales for the year were $2.85 billion and grew 24% on a two-year CAGR basis. After they successfully complete their first holiday, it's iconic. And our merchants just continue to find new rituals that we can bring to market and new milestones. Yeah. And not just product but also age. One, where is that today? Customers told us that while they loved visiting our stores, waiting in line to pay was a hassle. I don't think we've talked about that with this group. Let go and have fun. He can't wait to go to the store called Five Below. This was significant leverage, especially for a growth company as we realized several scale benefits. Good morning, everyone. And ultimately, this informs, it shapes and it guides our growth. They come in and they can choose pink or black or white for an online customer. And with that, I'll turn it back over to Joel. Thank you, Felipe. So how are you repositioning the store and rethinking other categories within it? I was having this conversation at break with a couple of you. Which is about executing amazing fun every day; And fifth, growth. 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. He knows a lot about our history. And of course, our partners focus on kids in need, and we are proud to be in a position to contribute. [Video presentation] Our founders, Tom and David, would speak to every customer that walked into that original store in Wayne, Pennsylvania. So we'll go to the online. This has been true at Five Below since day one. So it took us 18 years to open our first 1000 stores. And what also hasn't fundamentally changed is, as we continue to get scale benefits, especially on the gross margin side, we're going to let Michael reinvest that in the product. And now we're going to take about a 15-minute break. Less densely populated than the 50th store. We've also established by coastal consolidation points on the East and West Coasts to consolidate domestic vendors product. But rather than tell you what you -- what they did, I'll let Henry's mom tell you from her next Facebook post. Claiming to have massage acupoints incorporated in the foam design, these pillow slides may help stimulate blood circulation and relax muscles. From a specific rent perspective, those guys are -- the teams cutting deals all the time. No, I cannot imagine what their run states will be, but we will save that for another time.