Five Below Q4 2025 Earnings Call - Social-first newness and in-store execution lift comps, margins and guidance

Operator: Good day, and welcome to the Five Below fourth quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. Please note this event is being recorded. I would now like to turn the conference over to Christiane Pelz, VP, Investor Relations. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.: Thank you, operator. Good afternoon, everyone, and thanks for joining us today for Five Below’s fourth quarter 2025 financial results conference call. On today’s call are Winnie Park, Chief Executive Officer, and Dan Sullivan, 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 today are as of the date of this call, and we do not undertake any obligation to update our forward-looking statements. In this presentation, we will refer to our SG&A expenses. For us, SG&A means selling, general and administrative expenses, including payroll and other compensation, marketing and advertising expense, depreciation and amortization expense, and other selling and administrative expense. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP are included in today’s press release. 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 fivebelow.com. I will now turn the call over to Winnie.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thank you, Christiane. Hello, and thank you all for joining us this afternoon. We’re excited to share our outstanding fourth quarter results that capped off a transformational year for Five Below, one that reaffirmed that Five Below is the destination for the kid and the kid in all of us. We are a unique brand, and our incredible financial results in 2025 tell only part of the story. Because what made this year truly exceptional is how we achieved the results. We made a fundamental shift in how we operate, how we engage with our customers, and how we strategize and deliver growth of the business and the brand. Our maniacal focus on our target customer has pushed us to be more agile in delivering newness at great value and, as importantly, communicating with our customers in the social media channels they live in.

In 2025, we invested in curated product stories bought with authority. Better in-stock positions, supported by a store labor model focused on replenishing product and serving customers during peak periods led to a better experience for our customers and drove sales. For the year, we delivered sales growth of 23% to over $4.7 billion, a comp of 12.8%, operating margin expansion of 75 basis points to nearly 10%, and adjusted EPS growth of 32%. We grew our store count by 8.5%, opening 150 net new stores with strong results, capped by eight record-breaking grand openings in the Pacific Northwest in the fourth quarter. This performance was achieved during a challenging macro environment that required tremendous urgency and agility from our incredible crew, who are the real secret to our success in 2025.

These results incorporate a better than expected end to the year with our strongest holiday performance since becoming a public company. We delivered fourth quarter sales growth of 24%, including a 15.4% comparable sales increase. Importantly, this growth was both broad and balanced as we further strengthened our position as a portfolio-driven product business. We saw strength across all our merchandising worlds, and we grew in all 170 districts, all vintages of stores, and across all income cohorts. We drove both traffic and ticket growth resulting from improved marketing, amazing new product packed with compelling value, better in-store execution, and positive customer response to our simplified pricing strategy. I’m so proud of our crew for their focus and dedication in producing these results. I’m equally grateful for their hard work and commitment as we united and embraced change.

It was a year of transformation as we successfully delivered six curtain up moments with a new go-to-market process focused on storytelling and product newness, tackled tariffs, overhauled our marketing to focus on social media, expanded our omni-channel capabilities with third-party delivery service, and bolstered the executive team with new leaders in marketing, finance, and merchandising, all of which has laid the foundation for continued growth. Most importantly, over the past year, we defined and executed our new strategy, which is underpinned by three pillars: a maniacal focus on the target customer, delivering a connected customer journey from social to in-store, and collaborating cross-functionally to enhance execution throughout the year. Our strategy reinforces our position as the true destination for the kid and the kid in all of us.

First, we further defined our target customers, sharpening our focus on Gen Alpha, Gen Z, and millennial moms, and ensuring our product marketing and store experience resonate with their needs, and more importantly, what is trending and what they are following. Second, we met our customers where they are, namely in social, where we can dynamically engage with creator content and amplify viral moments like the current squishy dumpling craze. Speaking to our customers’ social channels and following up through targeted content and direct communications by capturing customer records will drive even more resonance and repeat visits as we develop our CRM capabilities. Third, changing how we work. We aligned merchandising, marketing, supply chain, IT, and store teams around six curtain up moments, operating with urgency and discipline to ensure a seamless flow of content and newness to our stores.

This structural change through a disciplined cross-functional go-to-market process has activated our flywheel of delivering timely newness, compelling storytelling, and great in-store experiences like events and curtain up floor sets. The result is an improved customer experience, generating more visits from new and existing customers. On merchandise, we have systematically delivered relevant newness throughout our worlds with curated assortments at great value. We continue to focus on differentiating our offer through amazing price value for the quality we provide from the hottest licensed lines to viral trends in beauty, fashion, candy, and collectibles. We’ve also launched exclusive licensed products for our old favorites like Stitch, as well as newer franchises like Wicked. This holiday, we aspire to be the greatest little toy store in America. To this end, we offered everything from LEGO to crafting kits and remote control cars, all at amazing value.

In addition to compelling gifts, from toys to beauty sets and yummy holiday PJs to gingerbread house kits, we offer customers a one-stop shop for holiday decor, gift wrap, and party essentials. Value remains a critical linchpin for our offering, and we demonstrated that we can effectively provide exceptional value at $5 and below, as well as at $7, $10, $15, and beyond. Customers recognize the compelling value across the assortment and at all price points, and their receptivity to our expanded offering above $5 reinforces our belief in the tremendous relative value that our products provide. Moving to more rounded price points also helps simplify and improve the shopping experience for our customers and the crew.

In terms of marketing, we redirected spend towards social and creator content so that we could be faster and more agile in communicating newness and amplifying viral moments that customers were generating on their own. We have just begun building a customer database, which will sharpen our ability to direct personalized social and direct marketing content to better engage with our customers and develop a relationship with them. While we’re still in very early innings with this strategy, we are very pleased with how it drove traffic and sales growth both online and in stores throughout the year. On to the store experience. We bought into newness and trend with conviction, delivering improved in-stock levels. We also invested in labor at peak periods to ensure that our shelves were restocked and customers’ needs were met.

We made our store easier to shop for our customers by beginning to move Five Beyond products in line with the categories where they logically belonged. As we simplified operations and improved communication and collaboration, our crew was even more engaged, leading to better execution and attentiveness to our customer, the boss. Providing a terrific experience for our customers while also driving greater productivity in our stores remains a priority. We also became more planful in our approach to new stores. We dialed back the pace of unit expansion to sharpen focus on the quality of locations and ensure that grand openings were brilliantly executed. With our customer-centric strategy well underway, strong comp performance, and accelerating new store productivity, we’re confident in the long runway of growth ahead. The results of 2025 offer clear proof points that our transformation is gaining traction, and we have more runway.

As we enter 2026, we believe the business is well-positioned for consistent, durable, top and bottom-line growth. Continuing to execute on our customer-centric strategy provides us great opportunity to further strengthen the Five Below brand and deepen the competitive moat that our unique retail concept provides. With our growing scale, we are focused on expanding our brand and customer reach across our communities. Bringing joy to kids, adults, and parents as we help them to play, live, give, and celebrate. As we evolve, I am confident that we will retain our strong customer focus and entrepreneurial culture and remain unrelenting in our commitment to provide unmatched value to our customers. With that, I’ll turn it over to Dan.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Thanks, Winnie. Good afternoon, everyone. I’ll begin my remarks with a review of our fourth quarter and fiscal 2025 results, and then discuss our outlook for the first quarter and full year of fiscal 2026. My comments will refer to the results on an adjusted or non-GAAP basis. As Winnie mentioned, we were very pleased to end the year on a strong note, with sales and profit exceeding our expectations. In January, we saw stronger than expected traffic growth, which converted well and broad basket growth that was fueled by AUR expansion. For the fourth quarter, net sales increased 24% to $1.7 billion, supported by a strong comparable sales increase of just over 15%, which was driven by growth in comparable ticket of 8% and comparable transactions of 7%.

Importantly, operating profit grew ahead of comp sales growth, further evidencing the strength and efficiency of our business model. We are operating in a highly dynamic environment and the end-to-end execution of our crew was noteworthy. In the fourth quarter, we opened 14 net new stores across eight states compared to 22 net new stores in the fourth quarter last year. In 2025, we grew our store count by 8.5% and ended the year with 1,921 stores in 46 states, including the two new states of Oregon and Washington. Adjusted gross profit increased 24% to $697 million or 40.3% in rate of sale, a decrease of approximately 20 basis points compared to the fourth quarter last year.

This was primarily driven by transitory tariff costs of 160 basis points, which were mostly mitigated by fixed cost leverage on the strong comp sales and improved shrink results. For shrink, the results of the physical inventory counts we conducted in January were actualized and trued up for all stores for a total benefit of 50 basis points year-over-year. Adjusted SG&A expenses totaled $385 million in Q4 or 22.3% in rate of sale, which was consistent to last year’s fourth quarter rate. The benefit of fixed cost leverage fully offset increased incentive costs and the incremental investment in labor hours that we made in the stores during the peak holiday period.

Adjusted operating income grew 23% in the fourth quarter to $313 million, and adjusted operating margin decreased approximately 10 basis points to 18.1%. Net interest income was about $6 million for the fourth quarter or approximately $2 million higher than last year, due primarily to a higher average cash balance throughout the quarter. Adjusted net income grew 25% to $240 million, and adjusted earnings per share increased 24% to $4.31 per share. For the full year, net sales increased 23% to $4.8 billion, driven by a strong comparable sales increase of nearly 13%. That was largely equally driven by both transactions and ticket growth.

Adjusted gross profit for the year increased 25% to $1.7 billion or 36.1% in rate of sale, an increase of approximately 50 basis points compared to last year. Adjusted gross margin accretion was primarily driven by fixed cost leverage and improved shrink results, partially offset by the net impact of unmitigated transitory tariff costs. Adjusted SG&A totaled $1.2 billion in fiscal 2025 or 26% in rate of sale, which represented a 20 basis point decrease compared to last fiscal year. This was driven by fixed cost leverage on the strong comp sales, largely offset by higher incentive costs and investments in store labor during the holiday. Adjusted operating income grew 33% for the year to $472 million, and adjusted operating margin increased 70 basis points to approximately 10%.

Net interest income was about $23 million for fiscal 2025 or approximately $8 million above last year, due mostly to a higher average cash balance throughout the year. Adjusted net income for fiscal 2025 grew 33% to $370 million, and adjusted earnings per share increased 32% to $6.67 per share. We ended the year in a strong cash position with approximately $932 million in cash equivalents, and investments. Inventory was approximately $847 million at the end of the year, an increase of 28% with a commensurate 18% increase in units versus last year. The increase in inventory reflects both the higher store count and the impact of tariffs on average unit costs.

Average per store units were up about 9% at year-end, reflecting the pull forward of inventory and our commitment to driving higher in-stock positions in store in support of our growth objectives. Capital expenditures, excluding the impact of tenant allowances, were approximately $175 million or 3.7% of net sales, which includes 150 net new store openings and investments in technology and infrastructure. We continue to allocate capital in support of growth with a clear view towards delivering the best return on that investment and with each dollar we deploy competing for the highest return. We generated strong peak free cash flow and plan to continue to focus on reducing our working capital in fiscal 2026 as we cycle the impact of tariffs.

Overall, 2025 proved to be a year of transformation for our business, and the successful execution of our strategy delivered outsized top and bottom line growth. In a challenging and dynamic macro environment, we operated with both urgency and discipline and with maniacal focus on the needs of our customers. Now on to our outlook for fiscal 2026. We’re operating in a highly dynamic and increasingly complex macro environment with significant geopolitical uncertainties and difficult to predict implications for the consumer. We believe this backdrop provides the rationale for a measured, prudent outlook. This year also has a few nuances, primarily related to the cadence of sales and the impact of tariffs. With respect to tariff rates specifically, for 2026, we have assumed that the global tariff rates that were in place as we entered this fiscal year will remain in place all year.

Our outlook, therefore, does not contemplate the impact of the recently enacted Section 122 tariffs, which are only in place for 150 days. Now, with respect to our outlook for the year, sales are expected to be in the range of $5.2 billion-$5.3 billion, an increase of 10% at the midpoint, and comparable sales growth is expected to be between 3% and 5%, or approximately 17% on a two-year stack basis at the midpoint. Adjusted operating margin at the midpoint is expected to increase 100 basis points to 10.9%, driven by gross margin expansion net of increased marketing investments. Adjusted diluted earnings per share is expected to be $8 at the midpoint, or a growth of 20% versus 2025 on 55.7 million shares outstanding.

As a reminder, our outlook does not include the impact of share repurchases. We expect net interest income of approximately $26 million and a full year effective tax rate of approximately 26%. Capital expenditures are expected to be between $230 million and $250 million, excluding the impact of tenant allowances, which reflects approximately 150 net new store openings and increased investments in technology and infrastructure. Onto the guidance for the first quarter of 2026. We expect total sales in the range of $1.18 billion-$1.2 billion, or growth of 23% at the midpoint versus last year’s first quarter, with comparable sales growth of between 14% and 16%.

The first quarter is expected to be our highest comping quarter of the year, in part due to the unanniversary benefits of the rounded price simplification strategy that we implemented last year. We expect to open approximately 45 net new stores across 24 states in the quarter. Gross margin in the first quarter is benefiting primarily from fixed cost leverage on the strong comps, higher merchandise margins related to the net benefit of pricing, and lower shrink. Adjusted operating margin at the midpoint is expected to be 9.7% versus 6.1% in the first quarter last year, with the majority of the 360 basis point increase driven by gross margin expansion and to a lesser degree, leverage over SG&A expenses.

Adjusted diluted earnings per share at the midpoint is expected to be $1.63 per share, or 90% growth versus last year. In summary, we’re very pleased with the underlying performance of the business and the continued execution of our customer-centric strategy underpins our confidence in this outlook for 2026. We remain focused on executing at a high level and continuing to deliver on our top and bottom line growth for the business. With that, I’ll hand the call back over to the operator to start the Q&A session.

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star, then one on your touchtone phone. To withdraw your question, please press Star, then two. Please limit yourself to one question. If you have further questions, you may re-enter the question queue. The first question will come from Matthew Boss with J.P. Morgan. Please go ahead.

Matthew Boss, Analyst, J.P. Morgan: Thanks, and congrats on a great quarter and the continued momentum. Winnie, could you help by breaking down the drivers behind the magnitude of comps that you’re seeing near term, mid-teens comps the last two quarters, and if you could speak to the acceleration that you’ve seen in the first quarter or maybe even larger picture, if you could just walk through the structural changes to the organization and maybe some of the new customer acquisition metrics that support this as durable or drivers off of a higher revenue base from here.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thanks so much, Matt. It has been a tremendous quarter and, we’re excited to see that momentum continue. Really, I would say that there is one word that characterizes our success, and that is our crew. I say that because what we’ve done is we have basically taken a year of pretty significant change and driven amazing results off that change and that transformation. The change started with a real focus on the customer and getting back to our roots and focusing on the kid and, specifically Gen Alpha, Gen Z and millennial parents, who, you know, love to reward their kids with a trip to Five Below.

The second piece is really focusing in on how our customers basically become aware of us and how they get to us and how we announce newness to them, and creating what we’re calling a connected customer journey. We’re meeting our customers where they live, which is in social media. We redirected our marketing to focus on social media. We’ve also just begun the journey of actually capturing their records so that we can continue a dialogue with them and invite them back, which we think is gonna be a major lever for growth in the future, just driven off of repeat visits, and again, engagement on new content. The last piece is the team pulled together and executed brilliantly. I call this the flywheel effect, and it really was about cross-functional collaboration across the organization.

We honed in on the six curtain up moments or new floor sets, but instead of just passing the baton between the merchants and marketers and stores, we basically start the season together, really hindsighting together what just happened. Then as we move forward through the season, being connected throughout. It culminates in a call with our 1,900 stores to really tell them what is, number one, the newness that we’re bringing forth. Two, what is the marketing message? What are we gonna be activating in stores and beyond? Then staying really connected in terms of how we drive the product into the stores and ensuring that they’ve got honestly good in-stock positions. It is a bit of retail one-on-one, but executed really, really well. I think that moving forward, you know, this is early innings.

I joined a year ago, so we’ve just started executing against this strategy and the team has executed very well. We’ve got more growth ahead of us that I think is incredibly durable. One of the things that makes it so relevant is the fact that we’ve got a unique retail concept. You know, we’re operating as a differentiated specialty store for kids, but with the discipline of an extreme value retailer. All very good. Thank you so much, Matthew.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Edward Kelly with Wells Fargo. Please go ahead.

Edward Kelly, Analyst, Wells Fargo: Yes. Hi, good afternoon. I’d like to add my congratulations. I would like to ask you about just the comp momentum, and there’s a lot of excitement about, you know, what you’ve been seeing so far in Q1, and I was hoping that you could maybe talk about, you know, what you think is driving that, particularly from a trend standpoint. As you take a step back and think about the Q1 comp guidance versus the full year comp guidance, can you just sort of help us bridge the way you’re thinking about full year given the robust start out of the gate?

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thanks so much, Ed. I’m gonna kick us off and talk to you about like the business that we’re seeing now, and then also have Dan lean in, and talk about how we’re gonna bridge quarter to quarter. We’re really excited. I think what we saw in consecutive quarters last year continues this year. We really do have right now in Q1 broad-based growth, and it’s across our entire assortment. We’re excited that our worlds are all comping, and we have been very intentional to take more of an assortment approach as opposed to relying on a single item. What you do is you take that growth across all of our worlds, that’s being kind of driven, you know, by great traffic, great transactions, also AUR. You layer on top of that, some compelling trends that are happening right now.

In the past, when those trends happened, we weren’t communicating directly with a customer vis-à-vis, the channels that they live in, like social. Today, we can engage directly. You know, we see something pop on social, like the squishy trend. What’s really nice is that we can amplify that through, honestly, what we say and do, but also watch it carefully. We’ve got a whole community of stores that’s also engaging as well as brands. It’s been really nice to see that. We’re enjoying that in this quarter in particular. I’m gonna let Dan step in and just help us bridge a bit.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Yeah. Thanks for the question. You’re right. We’re off to a good start here in the quarter that we’re in, and I think you all see the same data that we see. There’s great momentum coming out of the holiday, which we’re super excited about. The midpoint of our Q1 guide on comps puts us right smack in line with run rate trend, which we think is appropriate. As we go to sort of the balance of the year and to give you a little bit of the thinking on how we constructed the guide, I think the most important thing that I would highlight is what we’re up against as we think about Q2, Q3 and Q4. We’re gonna start comping some really tough growth quarters.

I think just pure math, when you think about a Q2 last year at +12% all the way up to +14% in Q3 and +16% in Q4, that’s real, right? That’s math, and that matters. That obviously factors in. I think the second thing I would highlight is just the state of the consumer and the macro environment in which we’re operating. We just don’t think it gets easier from here, whether it’s the prices at the pump or this sticky inflation that seems to be hanging around or a job market that is somewhat sluggish. We think the environment here is gonna continue to be challenging.

We sort of factored that in as we thought about the plans that we have, the execution and the newness and the strategy that Winnie referred to, and then ultimately what we’re up against in terms of back half of the year and trend. The last thing I’ll say is when you look at Q2, Q3 and Q4 of our business on a two-year stack, which I think is really important because it takes the noise out of a moment in time. Over those quarters, you’re seeing mid-double digit growth consistently, Q2, Q3, Q4. That tells us we’re still in a real strong growth position, and I think we’ve put the guide together in a pretty constructive way. Thanks, Ed.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Simeon Gutman with Morgan Stanley. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.2: Good afternoon. This is Pedro Fonseca on for Simeon Gutman. Great quarter, a fantastic momentum. Congratulations. My first question is for Winnie Park. In your prior roles, have you experienced a period of such strong growth as you’re seeing right now? What are the learnings that you take from those positions, from those roles that you can apply to comp here into 2026? I have a follow-up.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thanks so much for the question. I actually have seen strong growth in my past life, especially when I was engaged in international, and in international luxury. What’s nice, though, about Five Below is that we really think we’ve got, I guess, a toolkit for durable growth as we move forward. We think the strategy is compelling. I mean, you really start with the fact that we have a unique retail concept that’s focused on kids, and I think that that’s compelling here and other places. The second piece of this is our execution is really, really strong. I think you can have a brilliant strategy, but if you can’t execute.

With our teams and our crew, the execution is about collaboration and being really one team, one dream, being very close in terms of the trends that we’re seeing and reacting quickly. I would say the last piece of this is we’re just really excited to be able to engage directly with the customer. The customer is responding well, I think, in part because we’re talking to them. It’s not a one-way dialogue, traditional advertising, where you just put it out there. We’re engaging with them constantly. Through our new marketing efforts, through social media, we can be incredibly agile. If something’s popping, we can immediately react. The other piece of it is we’ve got a rich source of information because we can see what’s trending out there, and again, react.

I would say that all of those things give us a lot of confidence, and I do think this growth is special, but it’s also durable. Thanks so much for your question.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Michael Lasser with UBS. Please go ahead.

Michael Lasser, Analyst, UBS: Good evening. Thank you so much for taking my question. It’s really on investments that you can make in order to sustain this momentum moving forward, and it comes in two parts. First, Dan, you mentioned that you’re expecting 100 basis points of gross margin expansion this year. How would you break that down, from you know, factors that are unique to this year versus letting more of the goodness flow to the bottom line rather than reinvesting it? And does that create some tension over the long term if Five Below is not reinvesting all of the scale and other benefits it gets from being a bigger organization? And then as part of that, if you could just talk about how we should be modeling the contribution margin if indeed you are able to sustain this comp momentum above and beyond your guidance.

Would you choose to reinvest some of this outperformance back to be able to sustain this comp beyond 2026? Thank you so much.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Hey, Michael. Thank you very much for the thoughtful question. Look, if you look at 2026 as a whole, we’ve got actually 130 basis points of gross margin accretion year-over-year and about 100 basis points of operating profit accretion. That’s the model that we’ve built, and that’s on the 3-5 comp that we put together. The way we get there to answer your first question on sort of what’s driving that margin, you know, taking away sort of the leverage point and the shrink point, I think you’ve got three fundamental drivers. You’ve got price, which we won’t anniversary until late in 2Q. You’ve got the cycling of the transitory tariff headwinds of a year ago.

You’ve got a structurally lower tariff rate versus a year ago, mostly related to the reduction in the fentanyl tariff in China. Those are the predominant drivers of the gross margin accretion, and they’ll play differently between half one and half two. I think to your second question on the investment stance of this business, look, we feel really good that we are remaining committed to a growth stance for the business. That growth stance shows up, in my opinion, in a few different ways. We are incrementally investing in marketing this year, and you’ve heard Winnie talk a lot about the vision for how we want to engage, how we wanna build awareness, for this beautiful brand and talk to our customers in a different way.

That’s about 20-25 basis points of incremental year-over-year investment. We are continuing to invest in labor. We have seen the benefit of what happens when we put the right, you know, profile on the shop floor at our busiest times. We’re committed to getting that model continued to be optimized. Thirdly, we’re gonna continue to lean in on capital and support the growth of this business, both in new stores, but also in capacity within our distribution network to make sure that we’re ready not only for 2026 but beyond. I think we’ve got the right balance here of fueling and funding this growth, but also being thoughtful about what flows to the bottom line. Look, to your second question, what happens if we outperform this?

That’s a long way away for us. We would love to entertain that. We’re certainly thinking about that every day, but we’ll have more to say about that should that situation arise.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Scot Ciccarelli with Truist Securities. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.3: Good afternoon, everyone. Thanks for the time. Dan, I think you mentioned, you know, you’re seeing the same data that we’re seeing on the outside, but I think what we’re seeing on the outside would suggest you’re providing a relatively conservative guide, at least at this point, for the first quarter. Is that based on just conservatism? Is it because you still have Easter ahead, et cetera? If you just could provide more clarity around kind of the thinking on that? Thanks.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Absolutely. Scot, thanks for the question. Look, we’re seeing the same data you’re seeing. We’re thrilled with what’s happening out there. I think we’ve got to put context here, though, as well. We’re seven, eight weeks into the quarter. These are relatively low volume weeks, and I think that’s important to note. It doesn’t take away from the performance, but I think this quarter is gonna be delivered based on what’s in front of us, not what’s behind us. Easter is a big deal. Those are two really important selling weeks for us. It’s an early Easter this year, which is not ideal, but survivable. We’ve got to get that right, and we know we will.

I think the second thing I’ll go back to, Winnie and I both talked about it, is, look, the state of the consumer is not as strong as when we exited the year. I think we have to be thoughtful about that as well. There’s a threshold here in terms of wallet, and the consumer is under a lot of pressure. I don’t think we’re trying to be conservative. It’s not our intent. I think we’re trying to be thoughtful halfway through the quarter, knowing we’ve got a lot left to do, particularly around Easter, to land the quarter. Hopefully that answers your question. Thanks, Scott.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Paul Lejuez with Citi. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.1: Hey, thanks, guys. Can you talk about your AUR and ticket assumptions for the first quarter versus transactions? I’m curious, as we think about 2Q to 4Q, are you looking at those quarters as being consistent on a 1-year basis as you move throughout the year? Are you looking at them as being consistent on a 2-year basis? Are you building in a stronger second quarter, coming down a little bit, decelerating as we move throughout? Anything you can share on that second quarter to fourth quarter cadence and the AUR ticket and transaction assumptions.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Right. Thanks for the question, Paul. Yeah, look, let’s start at the macro level. We’ve got comp growth built into every quarter in the year, so I wanna reinforce that point. I think we made it in the opening remarks, but I think that’s important to note. Obviously, yes, you’re right, the sequential growth will slow as the cycling effect is more pronounced. 2025 got stronger as the year went on, which means the cycling challenge is harder in 2026 as the year goes on. In terms of how we thought about, you know, sort of ticket and AUR, I would sort of maybe ladder up and just think about it in terms of half one and half two.

We’ve modeled very consistent trends that we saw coming out of the year, particularly in Q1, around ticket growth, and AUR-driven ticket growth. It’s what we saw in the fourth quarter. It’s what we expect to see in Q1. That will obviously moderate as we move into Q2 and we anniversary the price increase. Over the back half of the year, yeah, you’re going to see a little bit more balanced, a little bit more moderated growth between both ticket and transaction. We do expect growth in both, but it’ll be more modest given what we’re cycling against. Thanks, Paul.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Robert Ohmes with Bank of America. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.3: Oh, hey, thanks for taking my question. I was just curious on the first quarter, you know, and the strength you have there, and it might be hard to see behind it, but was there any storm impact coming in the first quarter? You know, does early Easter mean anything for you guys? You know, maybe to call out historically, how has tax refunds helped or not helped Five Below’s business and are they helping right now?

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Yeah. So all that certainly went into how we thought about the first quarter. There is certainly tax refunds in the market. They came a bit earlier than what we’ve seen previously. We think that’s a bit behind what we’re seeing in the early results in the quarter. That’s been favorable. Look, I think in general, an early Easter is less advantageous than a late Easter. It sets up that post-Easter timeline where it’s still, unfortunately, a bit cold and you don’t get the full spring/summer sets going. But that’s de minimis. That’s probably on the rounding. I think at the end of the day, Easter is still a pronounced piece of the quarter for us, early or later. It’s a big piece of how we think about the quarter.

Yeah, you’ve got a bit of tax funding that’s worked its way through earlier than maybe we would’ve expected. You’ve got Easter out there. I think all of that has factored into how we constructed the first quarter comp guide.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Chuck Grom with Gordon Haskett. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.1: Hey, thanks very much. Can you guys unpack the traffic between new and existing customers? Then separately on store growth, what it would take to accelerate unit expansion from here in 2027 and 2028? I guess, what are you guys looking for, given how strong NSP’s been over the past year? Thanks.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Hey, Chuck. So we’ve seen growth in both new and existing at equivalent levels and actually at really, really great levels that we haven’t seen in the past. As I mentioned before, I think that the marketing strategies that we’ve deployed are, you know, they’re very effective. They’re working. As we gather customer records, I think that we’ll be able to see, you know, further growth, especially with that existing customer base and hopefully growth in that customer lifetime value, especially as, you know, kids enter and they grow up, see us through college and maybe one day become parents and come back to us. Really, really good potential out there. In terms of store growth, I think overall, you know, we’ve taken a position of being incredibly disciplined. I think that’s the difference. In the past year.

That discipline means evaluating the best locations and more importantly, opening with maximum impact. Ensuring that we’ve got the right level of inventory, ensuring that we’ve got a crew who are well-trained and really, I think bringing back grand opening marketing and shouting to the community that we’re there has worked. We really wanna focus on the number of stores. I think there’s a lot of white space out there for us, but it’s more important that we get the right ones and the right level of execution against them. Thanks so much, Chuck Grom.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Zhihan Ma with Bernstein. Please go ahead.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.0: Hi. Thank you. Winnie, I wanted to follow up on your comment about pricing and various price points above $5 to $7, $10, $15. Now, it’s not the first time that Five Below is going beyond the $5 price point. What do you think has changed in terms of you seeing the customers giving you the permission to realize more pricing power this time around beyond the $5 price point? Thank you.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thanks so much, Zhihan. A couple things have changed fundamentally. One thing remains the same. We remain very committed to delivering as much value and as much assortment at $5 and below. It represents about 80% of our business in terms of units sold. We’re very excited about that number. We’re proud of it. We wanna be a resource for customers where the price entry is a buck, and so building in great value is always gonna be central to what we do. We took a very different approach to pricing above $5. A couple things. One, we evaluated every single product and really looked at if you’re going to bring in a price point above $5, does it deserve to be at 7, 10, or 15?

An example over holiday was really compelling gift sets and bundled products that were at $10. That makes a big difference. Focus on relative value and also making sure that we are honestly priced better than competition. That all goes in the mix. The other aspect of how we think we’ve gotten permission from the customer is we basically merchandise the store the way they shop. In the past, all of these goods would be in the back of store in the Five Beyond area, and we worked very hard to actually try and disband that and actually put these really compelling wow value items in the zones where the customer is shopping. I’ll give you the example of a great speaker and a speaker table. You don’t need that to be in the back of store.

If you put it in the tech section with the other speakers, the customer sees the value in it. I think really leaning into how the customer shops, ensuring that they’re getting great relative value and remaining very, very focused on what the competition’s pricing at versus what we price at has been tremendous. The last thing I’ll say about Five Below that’s really great is we’re about newness. As we introduce new products at higher price points, they’re not comped to old products that were in the price line. We can really step out and do something unique. The customer has responded well and is giving us permission to do more at different price points. Thanks for your question.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Brian Nagel with Oppenheimer. Please go ahead.

Speaker 0: Hi, good afternoon. Great quarter. Congratulations. The question I wanna ask, you know, in focusing on sales, and look, you laid out the guidance and you talked about, you know, continued strength through the year, but really in the first quarter. As we think about 2026, you know, how should we? Are there factors that are beyond what you’re already doing, new factors that will should amount to, you know, key sales drivers for the year that we maybe did not see in 2025?

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Brian, thanks so much for your question. You know, honestly, I would say that in 2025, we planted a lot of seeds for growth and we see a lot of green shoots. Our intention during the course of the year is actually to amplify what we’ve already planted and started to reap. I will give you the example of our ability to actually react to trends as one of those ideas. In the past, there could be trends that were really hot, especially for kids. We were passive. We were able to provide the product, but we weren’t able to engage with the customer and amplify those trends.

Today, we’ve got a different toolkit, so we really can actually build community and engage with the customer about what’s hot and also react much faster than in the past at addressing that trend. We also are gonna take permission to look at those trends and introduce new trends along with that. I think that is something we’re beginning to exercise and will exercise throughout the year. We also, you know, honestly, last year we had the tariffs hit us, and so we weren’t able to actually buy or attain all the products that we wanted to fill out some of our worlds. This year, that is not an obstacle. We’ve worked very hard to diversify our store space, to negotiate. We do have the benefit of being able to price at great value above $5.

All of this is going to lead to greater range and greater growth in certain categories that we weren’t able to really service last year. I hope that answers your question. Thanks, Brian.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Jeremy Hamblin with Craig-Hallum Capital Group. Please go ahead.

Jeremy Hamblin, Analyst, Craig-Hallum Capital Group: Thanks, and I’ll add my congratulations on the success. First, just a clarifying question on the embedded tariffs.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: In guidance. I think what you said was that you’re modeling actually like for example, for China, what the ending 2025 tariff rate would be like 20% for China and not the 10% for the current global tariff rates. Just a clarification on that. My other question is, if you think about the long-term model here and you guys for a very long time, for a decade, did roughly an 11%-12% EBIT margin every year. And you’ve been building back towards that through a combination of, you know, improved operations and clearly higher AUVs. Where do you think you would need to combat, or what do you think the average unit volumes would need to get to to get back to that 11%-12% EBIT margin?

Thank you.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Thanks, Jeremy. Let me take the tariff question first and then we’ll talk about the business model. Maybe I’ll just take a step back and confirm for the group, how have we thought about tariffs in total in this outlook. First of all, I think you were in the right place to start. We have essentially assumed that the tariff rates that were in place as we started the fiscal year on February first remain in place. In rough terms, that means that the IEEPA tariffs that were eventually struck down later in February, we have assumed those are still in place for the year. We think that’s the best proxy in a very uncertain world, given the comments that we’ve seen from the administration to get back to that level.

That’s what’s embedded in our outlook. Equally, we have not contemplated the impact in our guidance of this 150-day 10% global tariff rate, the infamous Section 122 tariffs. We have not factored that into our guidance. We don’t believe that impact is material to the guidance. That’s how we thought about tariffs. On the business model question that you’re asking. Look, I think we’re not running this business to achieve a certain number, 12%, 13% op profit. What we’re doing is designing a model that provides durable growth, and I think this year is a great example of that. The ability to comp on top of 2025 speaks to the durable growth.

We’re gonna be super smart and drive margin accretion, and that margin accretion is gonna balance reinvestment and bottom line operating profit growth. How that model plays out over time, what does that balance look like between reinvest versus grow the bottom line? I think that’s what we will ultimately decide as we engage over the years. I think it all starts with a trusted, durable growth profile that based on the strategy, and to Winnie’s comments, the way we’re executing the strategy, we feel really good about our ability to do that. Then I think over time, we will get the mechanism right and the balance right of reinvest to continue to fuel that growth versus grow the EBIT margin line. That’s what we will do over time.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Krisztina Katai with Deutsche Bank. Please go ahead.

Krisztina Katai, Analyst, Deutsche Bank: Hi, good afternoon and congrats on a great quarter. Winnie, I wanted to ask on the six pertinent moments that delivered newness and the great in-store experience that you talked about. Just how many curtain up moments are planned for 2026? If you could talk about the expected percentage of newness within the assortment that you aim to achieve through these. Just lastly, you know, some of the key categories that you anticipate driving the most excitement in the coming year. Thank you.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Christiane, we will also feature six curtain up moments this year like we did in 2025. They really are the seasonal moments that our customers focused on, be it, you know, New Year’s, followed by Valentine’s, through to spring, Easter, et cetera. It really is their moments. What’s really nice is that between those moments, we can always layer in newness. We actually have newness in each of our worlds that occurs between those moments, and we have the ability to now talk to the customer about when those moments deliver. The key to our business success this past year has been getting the right product at the right price. I think that again, it begins and ends with the focus on the customer.

You know, when we talk about key categories that we think are important, we set off last year with a mission to really be the destination for the kid and the kid in all of us. With that, really doubling down on games, toys, in crafting those thought processes that, you know, we really stand out, both in terms of our position, but also in terms of our unique concept. We’ve got, you know, 9,000 sq ft on average. It’s a fun place to shop, and it’s a fun place to host kids. Beyond that, really looking at teens and tweens. We continue to fuel our businesses like beauty, as well as our lounge business and accessories. This year, I think we are really excited about doing more in terms of room and dorm.

Lots of great newness throughout our categories and our worlds. Again, with that focus on the kids and what they care about. Thank you so much, Krisztina.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Anthony Chukumba with Loop Capital. Please go ahead.

Krisztina Katai, Analyst, Deutsche Bank: Thank you so much for taking my question. I guess I have a quick one for Winnie. You know, this has just been such an amazing first year. Are you sure your first name is Winnie and not Winning?

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Anthony, that’s very kind. Does Winnie like the Pooh? Which is also a great product in the line right now. Thank you, Anthony.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from David Bellinger with Mizuho. Please go ahead.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Hey, thanks. I don’t really know how to follow that one, but my question is on social media. I mean, Winnie, you mentioned some of the influencer, TikTok, Instagram marketing. Are you looking at those sales as truly incremental at this point? Just can you help us think through any of the economics around that? Do you pay for a post? Do the influencers participate in any upside? Just help us understand the economics and the incrementality at this point. Thank you.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Yeah. David, what we’ve done is basically redirect what used to be spent on traditional TV commercials into social media. It’s a whole range. It’s both engagement in terms of creator content with creators and influencers, but it’s also just ensuring that if you’re watching, if you’re on social and you’re Gen Alpha and, you know, you’re watching a great video about Stitch and you’re interested in Stitch product, we’re serving up the right content to you. You know, it’s a multi-pronged strategy. It’s not as simple as just, you know, going out and paying for influencers. I think that what’s been really great, especially this year, as we look at the first quarter, is that, you know, it’s less about influencer content, and it’s much more about our ability to amplify what is user generated that’s out there.

People are talking about these products. We’re able to lean in and say, "We’ve got those products. We’ve got you." Even our stores are engaged in talking about, like, this product just landed. I think it just gives us access to a remarkable channel that again, is agile, incredibly effective in terms of return on ad spend. Honestly, the last piece of this is compelling. It’s something that the customers wanna engage in. All those pieces give us courage to do more, but we always have a test, learn, and ramp approach on anything we do. I’m really excited by what we’ve seen thus far. Thanks, David.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from John Heinbockel with Guggenheim. Please go ahead.

John Heinbockel, Analyst, Guggenheim: Hey, Winnie. Quick question. I know in the past you guys would run events in stores on the weekends. Your thought on that, the labor required for that, and then, you know, could you do birthday parties and you know, other related parties, or that’s too complicated labor-wise?

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Yeah. John, great question. So first of all, on events, we continue to host events. We just had an amazing Pokémon event. We’ve been really pleased. I think part of it is those events are incredibly sticky and create community. It’s something that certainly our brands and vendors want to help activate. It’s a one plus one equals three equation. The sales that we generate in general really do fund, more than fund, any labor that we put towards the events. I do think it’s an interesting and compelling question with regards to birthday parties and other activations. We haven’t contemplated that really fully. However, what we are trying to lean into is try to be a one-stop destination for your birthday needs. We’re excited about our balloon business.

You know, we don’t aspire to be all the balloons, but the best of balloons, and really think about our target customer. Offering really great party celebration items that complement what we’ve always done, which is party favors and gifts. Those are some thoughts, but certainly as we focus in on kids, we look at, you know, all avenues of potential growth and what that could do for us. Thanks for your question, John.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Michael Montani with Evercore ISI. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.4: Yes. Hi, thanks for taking the question. I was gonna ask, could you just summarize for the year where tariff headwinds ended up falling out for you? I believe in the first round of tariffs, it was roughly a third, a third, a third offset from pricing, cost out, and then vendor leverage. I’m just wondering if you could provide an update on how that has played out so far.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Yep. Thanks, Mike. We ended up largely where we thought we would a quarter ago, about 90 basis points full-year headwinds in 2025. In terms of, you know, sort of how we addressed those impacts, I go back to what I think is, like, a really important point with this business, which is we offset tariffs penny for penny at the item unit level. That’s obviously super important to the economics, and you see the benefit of that in 2026 because some of the gross margin tailwinds that we are getting right now is as tariffs have eased, we’ve got unit economics in a great place, and we’ve got margin accretion.

I think it’s noteworthy that the team was able to offset all of the tariff headwinds at the item level. How they did it, I think you’ve got the three buckets right in terms of the pricing benefit, the ability to negotiate and the ability to reengineer and redesign products. I think all of that factored in. I don’t know that I would size it a third. I think pricing was probably a bit more, but you know, I’ll leave it at that for now because I think you’ve got all three of the right levers.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Brad Thomas with KeyBanc Capital Markets. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.5: Good afternoon. Thanks for taking the question. What a great year. Question on the step-up in CapEx.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.6: Dan, just, what’s that going towards? Any interesting technology or supply chain opportunities? How are you thinking about perhaps getting back into some of the store refresh store remodel programs that had been in the past? Thanks.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Yeah, thanks for the question. You’re right. It’s a bit of a step up year over year in CapEx. We plan to be somewhere just over 4% of net sales in capital, which is slightly higher than where we ended 2025. I think the capital is largely gonna continue to be focused on the network and the stores and building out the next round of 150-ish new stores. That’s obviously the priority. The second piece, you’re right, we are making investments in the distribution network. We’ve gotta build for more capacity to support this growth, that process begins in 2026, and we’ve allocated capital for that. Then we are putting a bit more capital behind technology.

We’re seeing real opportunity here structurally to enhance technology. We talked earlier about our digital business and the website. We’ve talked about how do we make the merch teams more efficient and optimize end-to-end management of this business. There’s a technology investment. You’ve got the new stores, you’ve got investments in the network and in capacity, and you’ve got a bit more going towards technology to support the growth.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Brad.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: Sorry, go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Oh, I was just thinking, Brad.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Phillip Blee with William Blair. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.7: Well, thanks for sneaking me in. Congrats on a great quarter. So Winnie, you’ve spoken a lot about the contribution of the crew and incremental investments in labor over the past few quarters, how that’s led to better conversion and in-stock levels. Do you think stores are appropriately staffed now, or do you think that there’s room for further increases in either hours or headcount, particularly as you ramp up omni-channel efforts? And then, if so, how do you think about the opportunity to make additional gains in conversion? What kind of contribution could that have, or has most of the low-hanging fruit been taken already here now? Thank you.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thanks. Yeah, thanks for your question, Philip. Great question. It was interesting because I think last year we made an initial investment in terms of labor to ensure that we could do kind of the basics, which is to get product—move product from the back to the front and to drive the conversion. As the quarters progressed and we started to hit peak periods like holiday, we took a really thoughtful approach to match up peak traffic, peak days with recovery in our stores and ensuring that not only did the customers see the product on the shelf, but they got a better level of service. We will continue with that model and as it relates to kind of future endeavors like omni-channel, we are very much in a test, learn, and ramp mode.

You know, we have initiated buy online, pickup in store. We’ve seen actually big growth with third-party delivery. We’re gonna continue to look at those avenues because we’ve got to meet the customer where they are. I think particularly for the younger customers, specifically Gen Z, convenience is critical. We think it’s actually an opportunity to acquire new customers who may not have considered us or walk away just because it’s not convenient. You know, we’ll take a test, learn, and ramp approach in terms of how we look at that, but we think that turning on omni-channel is just gonna actually lead to greater acquisition and greater conversion moving forward. Thanks for your question.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.0: The next question will come from Spencer Hanus with Wolfe Research. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.6: Great. Thank you for the question. Just curious what you’re seeing in terms of growth from like new and then existing customers. Then any change in how the recent results are just impacting your view on where this business can comp like durably out in the future. Like, have your expectations moved up about sort of where comps land sort of in 2027 and 2028?

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Spencer, in terms of new and existing customers, we actually had what I would call a banner year in terms of both acquisition as well as repeat visits. I would attribute that to more effective marketing and really, again, meeting customers where they are. I talked about the fact that we’ve just started collecting records for customers, and we think that our ability to again get additional repeat and to drive you know our current customer base in terms of their value is much higher as we move through the year, and that’s one of our major initiatives for the year. We will also continue to focus on new customers and driving our brand awareness. All really really good stuff.

I’m gonna pass it on to Dan to talk about comp in the future.

Dan Sullivan, Chief Financial Officer and Treasurer, Five Below, Inc.: Yeah. Look, we’re super bullish on the growth profile of this business, right? You have to be. You look at the comp growth that we have delivered, you look at the new store growth. We haven’t talked about it on this call, but what we’ve seen in 8 new stores in new markets in the Pacific Northwest. So we’ve got a business that we think has an optimal opportunity to comp strongly with a lot of white space, and that is a very unique concept within retail. That’s how we feel about it. I think going back to Winnie’s earlier comments, we’ve got a compelling strategy. We’re executing at an incredibly high level with a talented crew, and there are so many things left to do here. We have not scratched the surface on what’s possible.

You put all that together, I’m gonna stop short of putting a number to it, but certainly we are bullish with the growth aspects that this business offers us, particularly with this strategy. Thanks for the question.

Operator: The final question will come from Joseph Feldman with Telsey Advisory Group. Please go ahead.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.8: Hey, guys. Thanks for making some time for me. I pressed late, I guess. I did wanna ask you guys, ’cause I know you’ve talked about with maybe thinking about a new format for the store now that you’ve brought out the Five Beyond items back into the aisles and have a more fluid merchandise flow. I was just wondering if you guys have been playing around with a newer format and what you’re thinking there. Thank you.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: Thanks so much, Joel. I think we’re always looking at ways to make the shopping experience that much more inspiring and frankly, just easier. Certainly with the abolition, I would say, of the Five Beyond area, we have opportunity to take the back of store and make it even that much more productive. We are looking at how to create better flow within the store without that Five Beyond area in the back and testing how we honestly convert stores in the network, but then also looking at new format work that allows us to really, truly bring to life this idea of these worlds that customers can shop in and move from.

We are serving some distinct customer groups, you know, the youngest customers, which are Gen Alpha, Gen Z, more teens, tweens, and young adults, and millennial moms, and they have very different needs. We’re thinking through how do we optimize the experience for each of those cohorts. More to come on that, but thanks for your question.

Operator: This will conclude our question and answer session. I would like to turn the conference back over to Winnie Park for any closing remarks.

Christiane Pelz, VP, Investor Relations, Five Below, Inc.9: First and foremost, thank y’all so much for your support, and we hope to see everyone in our stores for all your spring break and Easter essentials. We appreciate you. Please connect with us. Thank you for your attention on the call.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.