Good day and welcome to the Five Below Fourth Quarter and full year Fiscal 2020 Financial Results 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 zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Christiane Pelz, Vice President of Investor Relations. Please go ahead. Thank you, Cole. Good afternoon, everyone, and thank you for joining us today for Five Below's fourth quarter and fiscal year 2020 financial results conference call. On today's call are Joel Anderson, President and Chief Executive Officer, and Ken Bull, Chief Financial Officer and Treasurer. After management has made their formal remarks, we will open the call to questions. I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and Five Below's SEC filings. The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update our forward-looking statements. 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 Joel. Thank you, Christiane, and thanks everyone for joining us for our fourth quarter and year-end earnings call. I will review the highlights of our fourth quarter and fiscal year performance, as well as share some thoughts on 2021 before handing it over to Ken to discuss our financials in more detail. We will open the call up for questions. Before I speak to our results, I want to acknowledge what an unprecedented year 2020 was. At this time last year, we had little idea how much COVID would impact our business and our lives. So many of our customers, crew, and fellow citizens were and remain deeply impacted by the pandemic. Our thoughts and prayers remain with them, especially those who lost loved ones. I want to recognize and thank our customers, our crew, our vendor partners, and others who came together during the pandemic, enabling us to adjust to the realities of operating in this environment. I truly am impressed with how our associates pivoted and embraced the change, relentlessly solving problems for issues we had never faced before. Working back from the customer and creating new ways of offering the trend-right products and store experience our customers expect from Five Below. Although it was an extremely difficult period, Five Below became stronger as a company because of it, developing new muscle that will serve us well in what is sure to remain a very dynamic operating environment. We will continue to operate with the health and safety of our customers and crew as our top priority while maintaining the financial discipline we have historically demonstrated. Now, turning to the fourth quarter, our Q4 results exceeded the guidance we announced in conjunction with our holiday sales release. Sales were strong leading up to that announcement and accelerated in January, fueled by the second round of stimulus. We delivered fourth quarter sales of $858.5 million, or a growth of nearly 25%, and earnings per share grew nearly 12% to $2.20. Comparable sales were a remarkable 13.8%, representing the best Q4 comp we have ever achieved. Our e-commerce business continues to grow at a pace significantly faster than our stores. However, due to the small base, the overwhelming majority of our comp still comes from our stores. With respect to new stores, which remain our top growth opportunity, we opened two stores in the fourth quarter for a total of 120 net new stores opened across 32 states in 2020. Notably, our Bronx, New York store performed in the top 25 holiday grand openings, even with a more restrictive environment and reduced marketing. We ended the year with 1,020 stores, a nearly five-fold increase from when we went public in July of 2012, and leaving a long runway for growth to reach the 2,500-plus total store potential we continue to see in the United States. Before I speak to the specifics about the fourth quarter, I want to mention the key holiday selling period and acknowledge that both internal and external factors contributed to our strong performance. While our team did an outstanding job ensuring a safe, smooth, and successful holiday, we have benefited from external factors such as the favorable calendar and the ongoing shift in consumer spending from areas like travel and entertainment. Regarding the internal factors, from a merchandising perspective, the trend-right, amazing value products in our stores resonated with our customers. We saw broad-based strength throughout the store, especially in our room, style, sports, and tech worlds. The trends related to COVID we experienced throughout the year continued. Room and tech benefited from the work and play-at-home trend, while style captured the direct COVID impact of customers buying masks and hand sanitizers, among other items. Five Beyond also contributed to sales, both through the permanent offering in new stores and remodels, as well as the seasonal Five Beyond wall that was in all our stores for holiday for the second year. On the marketing front, we continued the shift to digital and fully eliminated our paper circulars, while decreasing our TV reach to approximately 25% of stores. As previously mentioned, we stopped our holiday campaign early this year to avoid big crowds in stores, given our desire to provide a safe shopping environment for everyone. On the digital front, we are focused on increasing our brand awareness and conversion through more targeted marketing, focusing on the acquisition and retention of our customers through various search and social platforms. In addition, we piloted a test with Instacart, allowing us to offer our customers more flexible options to shop our stores. With respect to infrastructure, our distribution center in Conroe, Texas, became fully operational and was a big factor in helping to serve our stores in Texas and further west more quickly and efficiently. Without a doubt, the Conroe facility helped us achieve the smoothest holiday we have ever experienced. On the e-commerce front, the addition of our Ohio Fulfillment Center was vital to serving increased customer demand online. In summary, we are very pleased with our fourth quarter, especially with the overall execution and operations during the holiday, from merchandising to supply chain to our stores and hiring. Now, turning to the year, sales overall for 2020 were nearly $2 billion, with earnings per share of $2.20. We accomplished so much during 2020 while quickly pivoting to adapt to the new environment and new ways of working. None of this would have been possible without our incredible team, who I am so personally proud of. Their agility, grit, and resilience enabled us to close and safely reopen our entire fleet of existing stores in record pace, as well as complete our new store opening plans and achieve our 1,000-store milestone. We accomplished all of this while making strides against our key strategic priorities, namely product, experience, and supply chain, while continuing to innovate. Let me highlight some of the accomplishments. Number one, we deepened our commitment to gaming with our first exclusive product collaboration with Booga and opened three local host test stores adjacent to our stores. Number two, we innovated our in-store experience with the launch of our new prototype with Five Beyond in the back of the store. We also accelerated the implementation of our crew member-assisted self-checkout to now about half of our chain, which was very helpful during the holiday season and made the checkout process more efficient for our customers. Number three, regarding the digital experience, we integrated the Holler assets, including the launch of the Five Below app, which improved our e-commerce offering. We also added new online services for our customers by partnering with Instacart to offer same-day delivery in over 350 locations while piloting a test of curbside pickup in select stores. Number four, on supply chain and systems, in addition to opening our new Texas DC, we broke ground on our West Coast DC in Arizona, which will open in the summer of 2021. We completed the implementation of the new Oracle Core Retail Merchandise System, which provides us with the platform to support our future growth. We also upgraded our new warehouse management system in Pedricktown to support our store growth in the Northeast. Now, let me turn to 2021. We are really excited for this year and the return to a more normalized store growth program with plans to open 170-180 stores across 33 states in fiscal 2021. In fact, as of today, we have already opened 34 new stores, including two more opening this week. This year, we will be entering the states of Utah and New Mexico, bringing the states we operate in to 40. By the end of the year, Texas, Florida, California, and New York will have now surpassed our home state of Pennsylvania in terms of the number of Five Below stores, and we expect to continue to densify and grow in these states. We are also excited to continue to play offense, execute with discipline, and make progress in furthering our strategic initiatives. Allow me to elaborate. First, as it relates to product, it all starts with the wow factor that is our customer promise. Innovation and agility are core to Five Below. Adjusting to customer needs and new trends is what Five Below does very well, as we demonstrated during COVID. Let me give you a little more color on what we are doing with Five Beyond and product collaborations. The emergence of Five Beyond from our Ten Below tests is a great example of how we pivoted to play offense. The customer has responded positively to our new Five Beyond assortment, which is filled with fresh, amazing value items and new categories to wow our customers. In 2020, the Five Beyond permanent section was in approximately 140 stores, and we plan to more than double that number in 2021, making it available in approximately 30% of our chain by year-end. We also plan to add the Five Beyond wall in all stores in select new seasons, like we did in January with the wellness offering. In addition, we are working on exclusive online items as part of the overall Five Beyond offering. As to product collaborations, we plan to expand the Booga gaming offering as well as do more exclusive collaborations in 2021. In fact, we kicked off the year with a new partnership focused on the creative aspects of teens and tweens' lives with Andrea Pippens, who's an illustrator and author. The Pippens collections of products help kids to imagine, create, and shine. Her colorful and inspiring tees have been very popular. We plan to create more opportunities like these in other areas across our stores. Second, as it relates to experience, our goal is to elevate the experience for both our customers and our crew. How do we do that? We do that through innovation, both in-store and digitally. In-store, we are featuring the new prototype with Five Beyond in the back of the store in both new stores and remodels. While our local host test was temporarily interrupted by COVID, we will restart this initiative and continue to add more local host locations in 2021. We continue to be pleased with our partnership with Nerd Street Gamers and see them emerging as a leader in esports. Expect us to continue to expand our capabilities in gaming. We also added assisted self-checkout to over 250 more stores, including the majority of new stores and remodels, bringing the total stores with assisted self-checkout to about 60% of our chain. This allows us to move our crew from behind the register to the floor to assist our customers with their shopping journey, which makes for a better customer experience overall. On the digital front, we are focused on increasing our brand awareness and more targeted marketing. As I previously stated, we are focused on the acquisition and retention of our customers through various search and social platforms and will continue to build upon our successful trial with Instacart into 2021. As for our crew experience, technology plays a key role, and in 2021, we are planning to upgrade our human capital management system. Finally, on supply chain, we are making progress in developing our core distribution network and optimizing inventory management while focusing on other ways to make our processes more efficient. We will open our West DC in Buckeye, Arizona, this year. In addition, we expect to break ground on our Midwest distribution center in Indiana, which we plan to open in 2022. This will complete the initial build-out of our core distribution center network. The new configuration should allow us to service all our stores within two days. We are also optimizing our inventory through our new warehouse management system and implementing a new cloud-based data and analytics platform for demand forecasting. Another ongoing project regarding inventory is focused on making packaging more efficient to optimize pallets and transportation. All these initiatives will be especially important this year as we, like others, contend with the ongoing global supply chain challenges resulting from the pandemic. In summary, as a company, we are committed to remaining nimble and adapting to this dynamic operating environment, including through the vaccination period and subsequent return to normalcy we are all craving. Five Below has a long history of successfully navigating difficult times, whether economic or other, and we believe that value never goes out of style. We remain laser-focused on the customer and delivering our promise in a safe shopping environment. We work back from our customers to find those gotta-have-it, trend-right products at extreme value, and that will never change. With Easter just around the corner on April 4th, we are really excited about our offering and to be a destination for Easter basket stuffers, including gifts, candy, and all else that brings joy to our customers and helps them celebrate the holidays. With that, I'd like to turn it over to Ken for the financial discussion. Thanks, Joel, and good afternoon, everyone. I will begin my remarks with a review of our fourth quarter and fiscal 2020 results and then discuss fiscal 2021. Our sales in the fourth quarter of 2020 were $858.5 million, up 24.9% from the fourth quarter of 2019. We ended the quarter with 1,020 stores, a year-over-year increase of 120 net new stores for 13.3%. In addition, we remodeled 45 stores during the fiscal year. Comparable sales increased a record 13.8% for the fourth quarter of 2020 versus a 2.2% comparable sales decrease in the fourth quarter of 2019. The fourth quarter of 2019 was impacted by six fewer holiday shopping days. The comp increase for the fourth quarter was driven by a 15.9% increase in comp average ticket, partially offset by a 1.8% decrease in comp transactions. Our holiday comparable sales through the first nine weeks of the quarter increased 10.1%, and sales accelerated in January, driven by the second round of government stimulus. Gross profit increased 17.9% to $340.9 million from $289.1 million reported in the fourth quarter of 2019. Gross margin finished at 39.7%, decreasing approximately 240 basis points from the record 42.1% last year. As expected, the decrease in gross margin was primarily driven by sales mix impacted by customer preferences from pandemic-related items, which was partially offset by leverage and store occupancy costs on the higher sales. SG&A expenses as a percentage of sales for the fourth quarter of 2020 decreased approximately 120 basis points to 20% from 21.1% in the fourth quarter of 2019, largely due to the intentional pullback in marketing, as Joel discussed. In addition, we leveraged fixed costs, while higher incentive compensation compared to last year was a partial offset. Operating income increased 17.7% to $169.6 million. Operating margin decreased approximately 120 basis points to 19.8% of sales from 21% in the fourth quarter of 2019. The effective tax rate for the fourth quarter of 2020 was 26.6% compared to 23.6% in the fourth quarter of 2019. The increase in the effective tax rate was driven by the outperformance in the fourth quarter, which resulted in year-end adjustments to our previously estimated tax rate. Net income for the fourth quarter increased 12.3% to $123.9 million, or $2.20 per diluted share, from $110.4 million, or $1.97 per diluted share last year. For fiscal 2020, total net sales were $1.96 billion, increased to 6.2%. Comparable sales decreased 5.5% versus a comparable sales increase of six tenths of a percent in 2019. This comparable sales decrease was driven by a reduction in transactions due primarily to the pandemic-related store closures in the first and second quarters. Gross profit for the full year decreased 3.2% to $652.3 million. Gross margin decreased by approximately 330 basis points to 33.2%, driven primarily by lower merchandise margins and deleverage of occupancy expenses due to the pandemic-driven store closures during the first half of the year. SG&A expenses as a percentage of sales for the year increased approximately 60 basis points to 25.4% from 24.7% in 2019, due primarily to deleverage of fixed costs and corporate expenses due to the store closures, offset in part by a reduction of marketing expenses. Operating income for 2020 of $154.8 million decreased 28.8% over the prior year. Operating margin of 7.9% decreased approximately 390 basis points from last year's operating margin of 11.8%. The net total of interest and other expense for 2020 reported below operating income was a charge of $1.7 million versus a net total of interest income and other expense in the amount of $4.3 million in 2019. Lower invested cash balances and interest rates, combined with temporary drawdowns and higher costs on our line of credit, resulted in a net interest expense in 2020 versus net interest income in 2019. In addition, in 2020, we recognized a full year of a pro-rata loss related to our non-controlling interest in Nerd Street Gamers. Our effective tax rate for the year was 19.4% compared to 21% in 2019. The lower-than-planned tax rate in both years was primarily due to the benefit of share-based accounting. Diluted earnings per share was $2.20 for fiscal 2020, a decrease of 29.5% versus diluted earnings per share of $3.12 for fiscal 2019. Diluted earnings per share included an $0.08 benefit from share-based accounting in 2020 and a $0.14 benefit in 2019. We ended the year with approximately $410 million in cash, cash equivalents, and short-term investment securities, and no debt. We made share repurchases of approximately $13 million, or 137,000 shares during the year. Inventory at the end of the year was $281.3 million as compared to $324 million at the end of fiscal 2019. Ending inventory on a per-store basis decreased approximately 23% year-over-year against elevated inventory balances at the end of fiscal 2019, which were the result of lower fourth-quarter sales and accelerated tariff-related receipts. In addition, ending inventory for fiscal 2020 was impacted by higher-than-expected fourth-quarter sell-throughs this year, as well as delayed inventory receipts resulting from global supply chain disruptions due to elevated product demand and congestion at ports. With respect to CapEx, we spent approximately $200 million in gross CapEx in fiscal 2020, excluding tenant allowances. This reflected the cost of opening the new Texas distribution center and payments on the new Arizona distribution center, opening 122 new stores, completing 45 remodels, and investments in systems and infrastructure. Now, I would like to turn to 2021. We are providing first-quarter guidance, but due to the continued uncertainty related to both the ongoing impact of COVID-19 and potential future shifts in consumer spending, we are unable to provide formal full-year sales and earnings guidance for 2021. However, I will offer directional commentary on how we are viewing the year. This first quarter will be very different than last year when we closed our stores due to the pandemic on March 20th, the Friday following our fourth-quarter earnings call. These store closures resulted in the loss of sales for last year's Easter and spring seasons. With Easter on April 4th this year, we are currently in the key selling weeks for the quarter. Last year, the pandemic was declared on Wednesday, March 11th, and we reported a 2.9% comparable sales increase for that quarter-to-date period. For the same period this year, comparable sales increased 12.3%. Based on our current trajectory and the expected benefit to sales from the third round of government stimulus, we expect first-quarter sales to be in a range of $540-$560 million. We expect to open approximately 60 stores in the first quarter, and as Joel mentioned, we are already over halfway there. Diluted EPS is expected to be in the range of $0.56-$0.68. Our effective tax rate for the fourth quarter is planned at approximately 25%, and it excludes the impact of share-based accounting or any share repurchases. As you know, our practice is to update the tax rate outlook quarterly with actual results when we report earnings. For the full fiscal year of 2021, although we are not providing formal sales and EPS guidance, we would like to provide a framework for how we are thinking about the year. We expect it to be a more normalized year from a growth and operating margin perspective. Accordingly, we view fiscal 2019 as a better comparison year for fiscal 2021 than the pandemic-impacted fiscal 2020. In a scenario where sales growth reflects a two-year compound growth rate in the high teens, we would expect fiscal 2021 operating margin to be relatively flat to fiscal 2019. We expect the second half of fiscal 2021 to be a difficult comparison as we left a very strong second half in 2020 when sales grew 25% and comparable sales were at a record high of 13.5%. With regards to non-operating results, our minority interest in Nerd Street Gamers is also expected to have a larger year-on-year negative impact, resulting in a net other expense of approximately $0.06. We are currently planning an effective tax rate for fiscal 2021 of 25%. For stores, we expect to open 170-180 new stores and complete approximately 30-35 remodels in fiscal 2021, with approximately 90-100 new stores opening in the first half of the year. We are planning to spend approximately $315 million in gross capital expenditures, excluding the impact of tenant allowances. This reflects opening a new distribution center in Arizona and beginning construction on a new distribution center in the Midwest, along with opening new stores and executing remodels and investing in systems and infrastructure. For all other details related to our results, please refer to our earnings press release. With that, I would like to turn the call back over to Joel to provide some closing comments before we open it up for questions. Joel? Yeah, thanks, Ken. In summary, we are very pleased with our performance overall in 2020. We played offense and acted quickly to position ourselves for success. We made difficult decisions while always keeping our customers and our crew at the forefront. The experience of 2020 has again demonstrated the strength of our proven model with the inherent flexibility of our eight worlds and our unique merchandising approach. I'm pleased with how well we connected with our customers and communities, including providing for those in need through our Toys for Tots, Alex Lemonade, St. Jude, CHOP Hospital, and other donation programs. All of this has made us an even stronger company, and we entered 2021 with great momentum. We are well positioned for growth and less than halfway to our 2,500-plus store target. We are really excited for 2021 to build on our progress, deliver on our customer promise, and relentlessly raise the bar as we continue to grow our amazing company this year and beyond. I'd like to turn the call back over to the operator for questions, but must remind you that we had a lot to share with you today, and we really need to stick to one question per analyst. With that, operator? Thank you. Everyone, I'll begin the question and answer session. To ask a question, you may press the star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. 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. At this time, we will pause momentarily to assemble the roster. Our first question today will come from Simeon Guttman with Morgan Stanley. Please go ahead. Hey, everyone. It's Simeon Guttman. My question is on incremental margins and, I guess, EBIT margins broadly. In Q1, I was going to ask around incremental margin. It's hard to do the year-over-year comparison, but it looks like the implied EBIT margin is in the 8-8.5% range, which is considerably better than the 7% from Q1, I think, of 2019. Can you tell us, because we can't really see what the incremental is, is there anything in the 8-8.5% implied that's being conservative if there's anything that's holding you back in the first quarter in terms of flow-through? Bigger picture, is there anything that you see changing the comp leverage point of the business broadly? This is really beyond 2021 or maybe even the back half of 2021, because I think you've told us 3% in the past. Curious how that algorithm may change going forward. Yeah, thanks, Simeon. I'll answer the second part of your question first around our leverage points as we move forward. As you mentioned, it is going to be an unusual year anniversary in 2020. But our impression and what we see here from a leverage point going forward, we had said before at about a 3% comp, acts any meaningful investment for a year, we should start to see leverage on the business. So I think that still continues to be what we see, and that holds true. Relative to the first quarter, again, as you mentioned, it's very difficult to make a comparison, really hard to make a comparison up against Q1 2020 given the store closures, but I think you mentioned Q1 2019. And what we're seeing, at least right now versus Q1 2019, you would have, for the most part, probably gross margins are relatively flat, and we'd see some meaningful lift and leverage over Q1 2019 on SG&A. And that would really be the driver. You would call it out, your estimate of leverage in 2019. And the overwhelming majority of that would be in SG&A. Thanks, Simeon. Yeah. Simeon. Yeah. Our next question will come from Chuck Grom with Gordon Haskett. Please go ahead. Hey, guys. Happy St. Patrick's Day. My question's on new customer acquisition, particularly in light of the better traffic performance in the fourth quarter relative to the past couple of quarters. When you look at 2020 and those that shopped you for the first time for PPE or supplies, curious if there's a way to isolate that cohort and maybe compare them to the gains that you saw over the past five years with, say, the Rainbow Looms and the spinner craze. Thanks. Happy St. Patrick's Day to you too, Chuck. I got my green on here. I'm looking at Ken, and I think it's a really great question you asked. I think of any years, it's probably the one year you can really isolate it because unlike when there's other trends going on, it's pretty easy to isolate because it's really the only thing going on. In addition to customer mix changes and costs associated with PPE and then just reopening times and shopping patterns and our closing times being off, I think there's just so much noise in it. I think that's why, rather than specific guidance on the year, we focus so much on making sure that the message got back to you that we really feel like we're back to normal operating margins. 2019 is certainly a much more normalized year, but it's really hard to specifically isolate what you're asking for, Chuck, and I hope that helps you get a little clarity around it. Thanks, Chuck. Our next question will come from Matthew Boss with JPMorgan Chase & Co. Please go ahead. Thanks, and congrats on another great quarter, guys. Joel, as we think about the best back half comps, I think for the company in basically a decade, what do you attribute company-specific to the recent inflection in performance? As we exit the pandemic, I guess, how would you rank opportunities as we think about accelerating market share on the other side? It goes back, I think, to the last couple of quarters. You've talked about taking a more offensive approach. Maybe just elaborate on different opportunities you see to do that. Yeah, thanks, Matt. I mean, clearly, we were very forthright about acknowledging both internal and external factors. I think as you look at the nine-week period, the 10% comp, that acceleration where the quarter ended at 13.8%, we attribute the overwhelming majority of that to external forces, the second stimulus. If you work backwards to the holiday and then as well as what we are seeing in the first quarter, I think what you are starting to see, Matt, is a lot of offense coming together to work. Certainly, Five Beyond played a very large piece of that. Our assortment, the merchants really pivoted nicely. If you think of the pandemic as a trend, kind of a weird way to categorize it, but our job when something emerges is to move the merchandising mix. I called out specific examples in both style and room, how the customer's buying patterns changed. I think if we had stayed the same, we would not have seen quite the lift we saw in the back half of the year. These eight worlds continue to serve us well, Matt, and it allows us to pivot into wherever the trend may be. This was emphasized in especially room as people stayed home, and there was a lot more room product bought than we have probably ever seen before. Clearly, the run-up at the end was external, but the overwhelming majority of that first nine-week holiday was us being nimble and reacting to trends we saw. The merchant team continues to do a great job. The planners got back out in the market, and we rebought after canceling hundreds of millions of goods. I'll tell you, the team, Matt, really operated on all cylinders to kind of salvage what started out as probably the toughest start to the year we've ever seen. We finished 2020 with momentum, and we enter 2021 now with great momentum as well. Thanks, Matt. Our next question will come from John Heinbockel with Guggenheim. Please go ahead. Guys, how do you think about phasing investments in product and marketing, I guess, specifically through the year? You got the easy compares, you got stimulus. Do you save firepower and point things more toward the second half by design? Those type of investments, how do you sort of gauge the elasticity of either one, product or marketing, if you pointed them to the back half of the year? John, great question. I think specifically on the marketing one, what you're really seeing is we believe we're kind of back to a more normalized marketing trend, which historically has been 2-3%. While we pulled back in the back half of last year, we've pulled back in the front half of this year, but we'll shift that back into the back half of next year. I think it's somewhat become something that we can really use as needed, but I think our base marketing remains 2-3%, and we stay focused on that piece. On the product side, I'm not sure I'm following, John, what you're asking about that shift there. Is there more of a focus on new product introduction and particularly Five Beyond in the back half, right, to generate more buzz with the shoppers than you may need in the first half? Yeah. No, look, I mean, Michael and his team, and there's always product innovation. It tends to probably show itself more in the back half of the year. Craze is excluded because we come out of holiday, we really see new things emerge, new buying habits, and then the merchants spend the front half of the year chasing those and really pivoting for the back half of the year. Now, if a craze emerges, like spinner was one that we were not even talking about in March of 2017, and that one's more about us just operating with speed. In general, product innovations, Booga's a great example of one. We read a lot. We observed many new trends around gaming, and the buyers are back out in the marketplace buying that new product assortment. Just the cycle of it, it's largely going to show up in the back half again. I think that continues to kind of be the flywheel we see with product innovations in general. Thanks, John. Our next question will come from Michael Lasser with UBS. Please go ahead. Good evening. Thanks a lot for taking my question. Can you break down the ticket growth you saw in Q4 between UPT and AUR and what drove those pieces? Given those dynamics and the likelihood that retail traffic will likely improve over the course of the year, should we think about Five Below now having a structurally higher comp than the 3.3% it averaged from 2015 to 2019? Yeah, thanks, Michael. Just on your ticket, I guess, ticket component question, I think I mentioned the increase we saw in Q4 was just over 15%. When you dive a little bit deeper into that, it really is really from both UPTs and the average unit retail increases. Then the second part of your question, I did not quite understand around a historical. Yeah, the second piece is, should we think about Five Below having a structurally higher level of same-store sales growth moving forward? Because clearly, you figured out how to drive ticket growth. As traffic returns, you will be able to retain this growth in ticket, and that will lead to a structurally higher level of same-store sales growth moving forward than Five Below has achieved in the past. Yeah, I think from a longer-term perspective, and that is a difficult question to answer at this point. I think just going out into this year, I think the one thing just to recall, and I think Joel and I both mentioned it in our comments, just the significant challenge we're going to have in the back half of the year up against the record performance that we had last year. Again, as we look further out, we would expect a more kind of normalized part of the business. Where that comes from, it could be a combination of both, right, transactions and tickets. I mean, that's just something we'll have to see. It's hard to really peg anything much longer and further out. Yeah, I think, Michael, what you're getting at is a great question. I think you just got to give us a little time and some more normal times to kind of see what that long-range impact on things like Five Beyond are, where we can now change that growth trajectory. We have to get through this ambiguous period of consumer shifts back to services. Some of that might just play a bigger play until we get beyond it. What you are alluding to is exactly how we are thinking about the business. I think that I call it play offense. Many of those initiatives are really starting to come together, both in product and marketing, that e-commerce, a lot of those that can potentially drive that. You need to give us a little bit more time to kind of watch what happens here and forecast that out. Got it. Makes sense. Thank you very much. Hey, thanks, Michael. Appreciate it. Thank you. Our next question will come from Scott Ciccarelli with RBC Capital Markets. Please go ahead. Hi, guys. Good afternoon. You mentioned on the call, Joel, that the densification of stores in certain states, and now you're going to be in 40 states. Is there any way to quantify the benefit you guys get from that densification strategy, whether it's sales because of brand awareness or maybe it's a marginal line because you can better leverage expenses like marketing and distribution? Just any color on that would be helpful, just given the expansion process that you guys are going through. Yeah, it's really both, Scott. I mean, sorry about the ambiguity on some of this just because of all the noise last year. Look, I think the one thing we are seeing is our brand awareness is something we've always been watching, and it's been rather low. What we've really seen year over year is our brand awareness in kind of markets anywhere open from two to seven years is moving up three to 100 to 500 basis points faster than it used to. While I can't specifically, due to all the noise last year, tell you it's because of densification, we internally believe that. We've shared with you cannibalizations closer to 100 dips a year. We're not afraid of that because I think the payoffs around awareness and picking up market share far outweigh slight cannibalization from individual stores. Directionally, it's really impacting both, and we're seeing it show up in brand awareness. Thanks, Scott. All right. Thanks, guys. Our next question will come from Paul Lejuez with Citi. Please go ahead. Hey, thanks, guys. Curious if you can talk about anything noteworthy on the inflation front. If so, if you are seeing some inflation, which parts of the assortment, and just what's the plan of attack? Thanks. Right now, Paul, our overall inflation we're feeling is relatively flat. I mean, there's certainly pressure on the supply chain side, but we're also seeing opportunities on the real estate side. I think as it all mixes out, through our scale and everything, we've been able to hold it relatively in check, and hence the kind of guide to relatively flat operating margin. I do not care if I left anything. Yeah, Paul, I think Joel hit it. There obviously are cost increases throughout the business, right, and whether it's supply chain, product, or otherwise. We always go back to the scale benefit that we have to be able to offset and mitigate those. Even the way we operate, which is maybe a little bit different than some other retailers. Joel mentioned freight, and we all know about what is going on out there in freight and supply chain disruptions. Credit out to the team getting out ahead of that from a negotiating standpoint and locking up our contracts earlier, both in a rate and capacity perspective. Although we are seeing increases, it is probably not as much as other businesses out there. Really a combination of being nimble with our vendors and negotiating and navigating all that combined with scale really help us to either offset or mitigate increases that are out there. Thanks, Paul. Thanks. Good luck. Our next question will come from Karen Short with Barclays. Please go ahead. Hi, thanks very much. I just wanted to go to the comps in the quarter versus your comments on comps in the quarter to date pre-closing for the pandemic. I kind of get to a January comp in the mid to high 20% range. I think, Ken, you commented that comps pre-closing were in the 12.3% range. I guess what I'm wondering is, is that kind of the right way to look at the spread or the impacts differently from the stimulus? I ask that in the context that March stimulus will obviously be much more impactful dollar-wise than January. The follow-up I just had on that is, is there any way to quantify the impact of Five Beyond on comps? Thanks. Yeah, thanks, Karen. Your math around your estimates around the comps are pretty reasonable. I mean, I think you can probably kind of do the math knowing where we were in total sales through the nine weeks and then what we provided in total sales for the quarter and then the 10% comp for the nine weeks versus the 13.8% for the quarter. Yeah, I think you're in a pretty reasonable range there. Again, the impact of stimulus payments, they're always tough to measure, engage, whether it be the magnitude or the extent, how long they last. As we mentioned, the guidance that we gave for Q1 this year, it did include our estimate of benefit from the third round of stimulus in the quarter. I would say your estimates are relatively reasonable. Thanks, Karen. Thanks, Karen. Our next question will come from Edward Kelly with Wells Fargo. Please go ahead. Hey, guys. Nice quarter. I want to just follow up on stimulus here. Ken, I'm just curious, within the Q1 guidance, what you are assuming for that stimulus benefit? As a follow-up to that, how positive do you believe the increase in the child tax credit will be for you later this year, given that it looks like it's coming in monthly payments this summer? I would imagine that, I don't know, the majority of your customers live in households with kids. Just kind of curious as to how you're maybe thinking about that as well. Yeah, thanks, Ed. As I mentioned, and Karen had asked the last question too around our guidance, it does include an estimate for the benefits on the third round of stimulus. I really don't want to get into specific amounts in terms of what's embedded in that number at the end of the day. I mean, you know how we guide in terms of the total number for the quarter and how we're seeing it. I can tell you that it's less than, well less than what the consensus was prior to this call. In other words, what we reported and what the consensus from the analysts were. It was well, well less than that. With regards to the childcare credit, yeah, I mean, those are the type of things that impact us. Joel in his remarks had mentioned there's always internal and external factors. That is an external factor that if there's any change in policy and mandates out there or benefits from taxes, we have seen historically that that could benefit our business too and increase because normally that's going to increase overall traffic or spending. We benefit in that, similar to what we've seen in the second round of stimulus and currently in the third round of stimulus. Yes, if the rules change that way, it could end up impacting our traffic during the summertime. Now, keep in mind, though, other things could be happening too. I mean, it's really hard to predict around the COVID-19 and the vaccines and then where overall consumer spending goes as entertainment and travel may start to, spending on that may start to increase. Yeah, I mean, Ed, it's clearly a tailwind for us. But it's also one that we don't have a lot of data points on. That's why we felt it important to be more directional on the year. I think what hopefully everyone's taken away is we've provided you our new stores, which make up historically 80% of our growth. You know the cadence on them. You know how we're thinking about the bottom line and growth rates. It starts to triangulate in at a pretty predictable number. Now we have to add in the pluses and takes of some of these external events. Most of them seem to be tailwinds, but we also got to watch a shift in consumer behavior the other way too. We're controlling what we can control. It feels great to be back to growth cycle again. We're in a pretty good position going into the end of the first quarter here. Thanks, Ed. Thank you. Yeah, you bet. Our next question will come from Chandni Luthra with Goldman Sachs. Please go ahead. Hi. Congratulations on successfully navigating an extremely difficult year. If you could throw some more color on inventory levels, you exited the quarter down 13%. Would you say that hindered your ability to capture some sales in the fourth quarter and you had to leave some on the table? What gives you confidence in managing that, especially given all the challenges going on globally as you think about first half of the year and likely into the second half as well? Thank you. Yeah, thanks. Thanks, Chandni. Yeah, as I mentioned in the prepared remarks, we were down about 23% year-over-year basis from an average store. Again, a couple of things were going on there. One, you got to look at last year when we were up probably half of that related to the sales. Also, we moved inventory in earlier, tariff-related inventory to avoid some tariffs there. You kind of flip to this year when we oversold, right, and had some tremendous sell-throughs there in the fourth quarter. Then some delayed receipts. I think Joel mentioned it too, where we are seeing some delays related to that global supply chain disruption. I got to tell you, I think the team is managing it very well. We do not see a material impact of that related to Q1 based on the guidance and the sales that we provided. I guess more to come on that as we move through the year. Right now, we feel like we are in a pretty good position with that. Again, navigating that pretty well with our vendors and also throughout the supply chain. Thank you. Thanks, Chandni. Our next question will come from Lorraine Hutchinson with Bank of America. Please go ahead. Thanks. Good afternoon. I wanted to follow up on some of the comments you made on Five Beyond adding more frequent seasonal drawers. Can we just talk a little bit about the strategy and if there's a chance that we will see those as permanent fixtures throughout the fleet at some point this year? Yeah, great question. Let me just refresh everybody on where we're at with Five Beyond, right? Because there's actually two components at this point in time. There's the Five Beyond prototype, and then there's what we affectionately call the wow wall that's in the rest of the chain. Our go-forward prototype for the class of 2021 will, for the most part, all new stores and remodels will now incorporate Five Beyond in the back of the store. The wow wall will be used at seasonal times throughout the rest of the chain. I think it's less about it being in the rest of the chain all year round, and it's more about us continuing to convert and shift more and more stores to the Five Beyond prototype. We're obviously pretty pleased with it. We like where it's going. I also am very respectful of who our customer is, what our brand stands for. I want to walk really carefully with not violating that agreement we have with the customer, namely Five Below. I think the feedback we've gotten from them is they love Five Beyond. They love the value, the wow factor, keep delivering that, but also keep it separate and segregated. We think we found a nice, happy way to do that with seasonal in-and-out wow presentations and yet moving ahead very quickly. I mean, 30% of our chain will now have the Five Beyond prototype by the end of the year. That is the nice balance with it. Look, we'll watch it. Could it change over time? Maybe. I think we're on a pretty good path right now of moving towards this new prototype and then dropping in some wow from time to time in the fleet. Ken, anything I missed there? No, I think you hit it. Good. Thank you. Thanks, Lorraine. You Lorraine. You bet. Our next question will come from Anthony Chukumba with Loop Capital. Please go ahead. Let me add my congratulations as well on a strong finish to the year. My question, you talked about the fact that you fully eliminated your paper circulars and you pulled back your marketing 25% of your stores. I mean, obviously, this is sort of an extraordinary year. I guess, what are your thoughts as you think about marketing going forward? I mean, I'm assuming you're probably not really going to do paper circulars anymore. I guess, how do you think about your TV ads going forward, given the fact you just did your best comp in company history when you did pull your TV advertising back? Thank you. Yeah. Hey, thanks. I appreciate the support there, Anthony. Look, we were already on the journey to reduce our dependence on paper. Clearly, the pandemic allowed us to accelerate that. We're not going back. We're pretty pleased where we're at. I think what we also learned is, whereas we were heading down a pretty strong path of national TV, the consumer behavior shifted a lot. We had much more success with some of our more targeted digital. I think as we sit here today, pending consumer shift again, that'll be the path we'll go down. We've seen the opportunity to not have to spend as much marketing. I think there's still the opportunity for use of performance marketing and reaching into some of our social paid platforms. As for right now, I mean, we're in a more normalized 2-3%. I think pending another change, I'd kind of hold it towards there. It's a reasonable number that gives us the right leverage. We're certainly always looking for ways to be more efficient. I think the stuff we've taken out is setting us up nicely. Thanks, Anthony. Our next question will come from Jeremy Hamblin with Craig-Hallum Capital Group. Please go ahead. Thanks, guys. I'll add my congratulations. I wanted to talk on Nerd Street and just with the vaccine rollout really accelerating here and maybe coming a little sooner or maybe quite a bit sooner than people were anticipating several months ago. Do you have a sense on how that may evolve here in the back half of the year in terms of maybe being a little bit more front and center for testing and expanding that initiative? Obviously, you provided the $0.06 drag to EPS for the year. Any additional color you can share on how you're looking at that rollout as it stands for 2021, or is that something you're kind of punting down the road to 2022? Ken was here in 1918, and I wasn't. He's been here a long time. No, I'm just kidding, Jeremy. Look, you can just tell by our comments during the prepared remarks that we really tried to focus on what we can control and tell you how we're thinking about the business and, quite honestly, how we think we're back to our growth algorithm. What you just gave one great example. We could probably sit here and go through two or three other external factors and argue about whether they're tailwinds or headwinds. I think they're going to play out. We're going to see some ups and some downs. Net-net, I think overall, there are probably more pluses than minuses out there. I think the message I want to leave with you and the rest of the analysts is Five Below is getting back to what we can control and getting back to more normal business. We're going to keep playing offense and innovating this awesome concept and making it better than ever. I hope that gives you enough clarity, but that's kind of how we're thinking about it. Thanks, guys. Good luck. Our next question will come from Paul Trussell with Deutsche Bank. Please go ahead. Good afternoon. Just on stores. Just a question on any metrics that you can provide as we think about your new store prototype regarding productivity or returns relative to the rest of the base. Also, with you kind of breaking ground on the distro center that will open next year, just curious, what will be kind of capacity in terms of what you can support through the DC system in 2022? Yeah, thanks, Paul. Look, taking the back half of that, on the DC side, in theory, when the next one is up, it certainly gives us the capacity to support all 2,500 stores. Now, that does not mean you'll never hear us open another distribution center because at some point in time, you're also going to look at efficiencies, and you want a smaller regional in, say, the Pacific Northwest or something. Our overwhelming heavy lift, the multi-year investment phase, which we're honestly kind of behind in, we're now ahead. I think we feel pretty good at that as we get Arizona open this year and the Midwest next year. Store metrics are tough. I mean, obviously, stores are getting more productive. We continue to see lifts in the remodels we're doing. We expect those productivity gains to continue to grow. I'd ask for a little patience from you guys before we kind of give you specifics because we've been trying to parse it out in the remodels we've done. There's just so much noise from closed stores, open stores, states having different levels of shutdowns, stimulus money dropping in. Obviously, we feel really good about it as you're seeing us move forward with this prototype and remodels. Thanks, Paul. I think we're wrapping up here. We'll end with Paul there. Really appreciate you getting on the call with us. Thanks, everyone, for joining. We look forward to speaking with you again on our first quarter call, which will be in early June. Have a good evening and appreciate the support of Five Below. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.