Good day, and welcome to the Five Below first quarter 2021 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 zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one. 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. Thanks, Cole. Good afternoon, everyone, and thank you for joining us today for Five Below's first quarter fiscal 2021 financial results conference call. On today's call are Joel Anderson, President and Chief Executive Officer, and Ken Bull, Chief Financial Officer and Treasurer. After management has made their formal remarks, we will open the call to questions. I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the 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 first quarter earnings call. I will review the highlights of our first quarter performance before handing it over to Ken to discuss our financials and outlook in more detail. We will open the call up for questions. We've been fully reopened for three consecutive quarters, and on March 20th, we lapped our initial temporary closings from the first quarter of 2020. I remain amazed at the resiliency and flexibility of our customers, vendors, and crew. We thank them all for continuing to support Five Below in this dynamic operating environment. Turning to the first quarter, we are extremely pleased to deliver Q1 results that exceeded the guidance we provided on our last earnings call in March. We achieved first quarter sales of $598 million and earnings per share of $0.88. Versus 2019, which is more comparable than 2020, sales grew 64%, and earnings per share grew 91%. Sales growth continued to be driven by double-digit ticket growth, while transactions remained slightly negative due to reduced store hours. We saw strength across the business in both existing and new stores, including all-time records for new store performance that I will discuss shortly. This strong performance also played out across channels with our average sales per store hitting record levels for the first quarter and our nascent but fast-growing digital business posting double-digit growth over last year's first quarter when e-commerce grew four times. New stores have always been the fuel for the Five Below growth engine, and in Q1, we opened 68 new stores, the most we've ever opened in a quarter. Six of these stores across five states made the top 25 list of our all-time spring grand openings. In fact, one of our stores in Lubbock, Texas, set the all-time grand opening record. Considering the reduced store operating hours and increased grand opening marketing, these results were even more remarkable. We successfully entered our 39th state, Utah, with seven new stores in the Salt Lake City area, where the customer response was very strong. We also opened a store in the new market of Tucson, Arizona, which is one of the stores that finished in the top 25 spring grand openings. We are on track to open between 170 and 180 new stores this year and end fiscal 2021 with approximately 1,200 stores, leaving us a long runway ahead to reach the 2,500-plus total store potential we believe exists in the U.S. Before I speak to the specifics about the first quarter, I want to acknowledge that once again, both internal and external factors contributed to our strong performance. Internally, our teams executed well across the organization, delivering WOW for our customers with amazing product at outstanding values, injecting a little fun into their lives when they arguably needed it most. Externally, we also continued to benefit from the government stimulus as the third round of stimulus began to hit bank accounts in mid-March. We maintained an unrelenting focus on our strategic initiatives across product, experience, and supply chain in the first quarter. On product, from a merchandising perspective, we continue to work closely with our vendor partners around the world to capture and chase trends for our customers to offer them the products they've just gotta have. We saw broad-based strength across our worlds during the first quarter, especially in the sports, tech, style, candy, and room worlds. Sports was strong in the games and toys category. Tech benefited from gaming products, including the Bugha items we launched last year. Style was supported by apparel and accessories. Candy recovered nicely after losing most of the Easter season last year when our stores were closed. Finally, room continued to benefit from the trend of people working and schooling from home. Whether in the $1 to $5 product category or the newer extreme value Five Beyond section, the merchandising team is focused on distorting value across categories using their expertise and experience, combined with our growth and benefits of scale. For example, the Room World has evolved incredibly over the last several years and now features regularly sized tables and other furniture to outfit an entire room on a budget. The pet category within the Room World has grown significantly as we expanded the assortment, especially this past year in response to the pet adoption trend. The merchandising team continues to remain nimble and flexible when sourcing amazing trend-right products by working with our vendor partners, listening to our customers, and spotting trends on social media, among other channels. The ability for Five Below to participate in almost any trend through our eight worlds, and the flexibility within those worlds, is a key distinguishing feature of our model. Our second initiative is focused on the experience for our customers and crew. Experience includes both in-store and digital, and we constantly look for ways to enhance the experience through innovation. In-store, we have now successfully pivoted to our new prototype with Five Beyond merchandise included in the tech and room worlds in the back of the store. In addition to the 68 new stores, we remodeled about 12 stores in Q1 into this prototype and now expect to finish 2021 with about 30% of our stores in the Five Beyond format. Additionally, Associate Assisted Self-Checkout, or ACO, as we call it, is in most of these stores, and we are adding over 250 ACO stores to be in over 60% of the chain by the end of this year. ACO allows our crew to move from behind the register to the floor to assist our customers with their shopping and checkout process, which makes for a better and faster customer experience. Five Beyond and ACO are just two examples of how fast we are transforming the Five Below concept to make it an even better experience. For digital, which includes marketing as well as e-commerce, we focused on increasing our brand awareness through more targeted marketing, utilizing paid search and social platforms such as Instagram. Through digital channels, we are able to highlight our amazing value, hot new products, and inspire and delight our customers. Our approach is integrated with our store experience, visually appealing, bright, and engaging. We believe we are attracting both new customers to Five Below, who convert to regular customers, as well as developing a deeper connection with current customers. Similarly, for e-commerce, we are growing the number of new customers while also increasing the percentage of repeat customers. In addition, we are continuing our test with Instacart, which is currently operational in a third of our chain. With respect to our third strategic initiative, supply chain, we made significant progress in preparing our next two distribution centers to open. We started inbound shipping to our Arizona DC, or ship center, as we refer to our DCs, a few weeks ago, and also broke ground on our Indianapolis ship center in mid-April. The Arizona ship center is expected to open later this summer and will include e-commerce fulfillment, which will improve our service to customers in the western states. These ship centers feature a new warehouse management system, which, combined with our demand forecasting platform, will help optimize our inventory levels and allocations. Within our supply chain, consistent with other retailers, we are contending with the ongoing global challenges and rising costs resulting from the pandemic. Our teams are doing a great job navigating these tight supply conditions, whether it be by negotiating our annual contracts early or finding new carriers to help ship our product. In summary, we are very pleased with the results and the progress we made in the first quarter. We are excited to continue to play offense, execute with discipline, and make progress in furthering our strategic initiatives across product, experience, and supply chain. We continue to be nimble and pivot quickly to capture trends, wowing our customers with extreme value products. We believe our product lineup for summer fun offers an awesome selection of outdoor products, including new beach toys and towels, as well as sandals and summer apparel. We are sure to have something for everyone. Looking ahead, we are excited to offer a more traditional Five Below back-to-school assortment, as well as our seasonal WOW wall with new Five Beyond product. We have sourced truly amazing WOW product for our customers to enjoy and celebrate a return to normal. Our customers have told us they recognize the extreme value we offer through Five Beyond, and we will continue to listen and work back from them to find those gotta-have, trend-right products at extreme value, and all packaged in a fun and amazing shopping experience. With that, I'd like to turn it over to Ken for the financial discussion. Ken? Thanks, Joel, and good afternoon, everyone. I will begin my remarks with a review of our first quarter results and then provide guidance for the second quarter and commentary on the back half of the year. Because our stores were temporarily closed during the first quarter last year, making a year-over-year comparison less meaningful, I will also provide a review of our results versus the first quarter of 2019. We were very pleased with our record first quarter results. Our sales for the first quarter of 2021 increased to $597.8 million from $200.9 million reported in the first quarter last year. Total sales this year grew 64% compared to the first quarter of 2019 on an average store count growth rate of 37%. For the comparable subset of stores that were open in both the first quarter of 2019 and the first quarter of 2021, sales increased 23%, driven by record first quarter tickets on the heels of a strong demand environment aided by stimulus, as well as the success we are seeing with our own merchandising initiatives. Transactions continue to be down given we operated the stores with fewer hours versus our standard pre-COVID operating hours. These ticket and transaction trends are similar to what we have seen since reopening the chain last year. We opened a record 67 net new stores across 28 states in the first quarter compared to 20 net new stores opened in the first quarter last year. We ended the quarter with 1,087 stores, an increase of 167 stores or approximately 18%, versus 920 stores at the end of the first quarter of 2020. As Joel mentioned, we entered our 39th state with seven new store openings in the Salt Lake City area of Utah. We were very pleased with the performance of our new stores, especially given the more restrictive shopping environment and extremely limited grand opening marketing. Gross profit for the first quarter of 2021 was $200.9 million versus $20.5 million in the first quarter of 2020. Versus the first quarter of 2019, gross profit increased by 67%, while gross margin increased approximately 70 basis points, driven primarily by occupancy leverage on the strong sales results, which more than offset higher inbound freight costs resulting from the tight supply chain conditions Joel mentioned. SG&A expenses were $137.2 million for the first quarter of 2021 versus $92.7 million in the first quarter of 2020. Compared to the first quarter of 2019, SG&A expenses increased 44% but decreased approximately 320 basis points as a% of sales, driven by lower store expenses on the reduced operating hours, reduced marketing expense, and fixed cost leverage. As a result, we reported operating income of $63.7 million for the first quarter of 2021 versus an operating loss of $72.2 million in the first quarter of 2020. Versus the first quarter of 2019, operating income this year increased more than two and a half times. Net income for the first quarter of 2021 was $49.6 million versus a net loss of $50.6 million last year and net income of $25.7 million in 2019. Earnings per diluted share for the first quarter was $0.88 compared to last year's loss per diluted share of $0.91, and it was a 91% increase versus earnings per diluted share of $0.46 in 2019. We had a share-based accounting benefit of approximately $0.04 in the first quarter of this year compared to approximately $0.02 in the first quarter of 2020 and $0.11 in the first quarter of 2019. We ended the first quarter with $392 million in cash equivalents, and investments, and no debt, including nothing outstanding on our $225 million line of credit. Inventory at the end of the first quarter was $327 million as compared to $368 million at the end of the first quarter last year. Average inventory on a per store basis decreased approximately 25% versus the first quarter last year, as last year's first quarter inventory was inflated by the temporary store closures. Versus the first quarter of 2019, average inventory per store decreased approximately 12%. Our current inventory levels are in a good position to support the second quarter. As we look to the second half of the year, we are working to accelerate receipts and add carrier capacity as we navigate a tight supply chain environment. Now looking ahead, we are providing formal guidance for the second quarter of 2021, but not the full year due to the continued uncertainty related to both the ongoing impact of COVID-19 and potential future shifts in consumer spending. However, I will offer directional commentary on how we are viewing the full year. For both the quarter and the full year, I will compare to fiscal 2019 due to the disruption in store closures caused by COVID-19 last year. We are very pleased with the start to the second quarter. We expect second quarter sales to be in a range of $640 million-$660 million. The midpoint of this range represents an increase of 56% versus sales for the second quarter of 2019 on an average store count growth rate of 36%, given we plan to open approximately 30 stores in the second quarter. We expect significant operating margin leverage versus the second quarter of 2019, driven primarily by SG&A expenses, including a shift in marketing spend into the second half of the year. Our effective tax rate for the second quarter is planned at approximately 25%, which excludes the impact of share-based accounting or any share repurchases. Our practice is to update the tax rate outlook quarterly with actual results when we report earnings. Net income for the second quarter of 2021 is expected to be in the range of $56.9 million to $63.7 million, with diluted EPS expected to be in the range of $1.01- $1.13. This represents a growth rate at the midpoint of more than double the net income and EPS reported for the second quarter of 2019. We are on track to deliver a much stronger first half of fiscal 2021 than we had envisioned when we spoke with you back in March. As I mentioned earlier, due to the continued uncertainty related to both the ongoing impact of COVID-19 and potential future shifts in consumer spending, we are not able to provide full year guidance at this time. Back in March, I discussed a scenario for the year where a high teens compound annual sales growth rate from 2019 to 2021 would result in operating margins in line with 2019. Given our first quarter results and guidance for the second quarter, a higher two-year sales CAGR in the low 20s range would result in operating leverage of approximately 30 basis points versus 2019, driven by SG&A leverage. With regards to non-operating results, our minority interest in Nerd Street Gamers is still expected to result in a net other expense of approximately $0.06. In addition, we are currently planning an effective tax rate for the back half of 2021 of approximately 25%. For the year, we expect to open 170- 180 new stores, with approximately 100 new stores opening in the first half of the year, and we expect to complete approximately 30 remodels. We are planning to spend approximately $315 million in gross capital expenditures, excluding the impact of tenant allowances. This reflects opening a new ship center in Arizona and beginning construction on a new ship center outside Indianapolis, opening new stores and executing remodels, and investing in systems and infrastructure. In conclusion, we had a great first quarter and are off to a strong start for the second quarter. Agility, flexibility, and innovation, along with extremely disciplined cost and capital management, and the ongoing growth and scale in the business are all inherent to our model and how we have always operated. These qualities will continue to serve us well as we navigate a dynamic operating environment. Now I'll turn it over to Joel for a brief summary before we begin Q&A. Joel? Thanks, Ken. In summary, we are very pleased that the momentum from a strong finish to 2020 continues, and I'm proud of how our teams are executing across the company. With the inherent flexibility of our eight worlds, unique merchandising approach, and focus on innovation across product experience and supply chain, we believe we remain in a position of strength to continue growing Five Below and driving sustainable long-term value for all stakeholders. With that, I'd like to turn the call over to the operator for questions. Operator? We will now begin the question and answer session.To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble the roster. Our first question today will come from Matthew Boss with JPMorgan. Please go ahead. Great. Thanks, and congrats on another great print, guys. Hey, thanks, Matt. Maybe a two-part question. Joel, on top-line growth relative to 2019, how would you best rank the company-specific drivers that you think are contributing to the outperformance? Maybe for Ken, as we think about success with Five Beyond and the new customer acquisition that you're clearly seeing, I guess, any way to speak to productivity and brand awareness that you're seeing in new doors today? I know you guys have talked about moving to offense. What could it be in terms of the ability maybe to even accelerate and take market share coming out of the pandemic? Yeah. Thanks, Matt. On top line, it's hard to distinguish between just external and internal. Obviously, the stimulus was an external one. I think you can tell, though, by our guide in the second quarter that it wasn't just external factors and you see the momentum continuing both in April and then now well into the second quarter. Clearly, adding things like Five Beyond makes a difference. The eight worlds gives us a lot of flexibility to chase trends in many different categories. I think what you heard me call out five different worlds that really drove it, and I think it all adds up to, like we've seen in any kinds of trends or in this case, COVID, we picked up a lot of new customers. Those new customers try out Five Below, they like what they see, and then they become regular customers with us, and that keeps the momentum going. We feel really good about the internal drivers to our growth. Ken, you want to? Yeah. Matt, on Five Beyond, I think Joel had already mentioned a little bit of it there. We're really pleased with what we're seeing and the reactions from the customer. Another example for us to present extreme value to the customer. We continue to roll that out in our stores. We're going to be at probably about 30% of the chain. Yeah To have that prototype in at the end of this year. Again, it gives us a chance there to continue to offer that value to customers, and they continue to respond really well for that. That is something we see as a great opportunity for us. Again, as you've heard from us before, just another area of innovation for us where we continue to just up the game from an experience standpoint. Matt, what I'm probably most proud of the team is when we get a new idea, we move fast. I called out in my prepared remarks both ACO and Five Beyond. Those were basically nonexistent a couple of years ago, and ACO is now in 60% of the chain and Five Beyond in 30% of the chain. Really changing the experience to make it even better. Matt, I think you also asked about new customer acquisition. I think we've talked about that before. We were really happy with what we saw in the fourth quarter, very healthy results there. We saw that again in this first quarter, so it's good to continue to see those new customers coming on board. Thanks, Matt. Great testimony. Yep. Thank you. Thanks, Matt. Our next question will come from John Heinbockel with Guggenheim Securities. Please go ahead. Two questions. One, how do you guys think about gauging demand for the holiday season with a lot of moving parts and in light of the supply chain environment flowing product in? That's number one. Two, what are the things that COVID might have created that is structural? You think about operating hours, marketing spend. Is any of that structural that would improve the profitability of the business on an ongoing basis? Yeah. John, great questions. I think as it relates to demand for holiday, it's part of the reason we're not giving formal guidance. I think as you look ahead, there's a lot of unknowns. I would say they're equally weighted as headwinds and tailwinds. I think with the momentum we got right now, and as Ken gave you the revised outlook on a scenario for the year, you can see we feel pretty good about the setup going into the back half of the year. You asked specifically about supply chain. I think everybody's talking about it. We have two advantages. One, we're pretty locked up with contracts throughout the year, and that really helps on the cost side to mitigate a bunch of that. On the other hand, with our concept being a treasure hunt concept, it allows for a lot of substitution. Customers don't come in necessarily for a specific item. They come in to solve a specific problem, a birthday, a fun little gift or something like that. That really helps us as we might face temporary out of stocks or something being behind. I'll tell you, the supply chain team's done a great job of setting ourselves up. We're bringing product in early for holiday. I think we're in a good space. As for structural coming out of COVID, some of the structural changes, hey, we tightened our belts and as we always say, hold the penny hostage. I think we pivoted our marketing significantly during COVID. We're now 100% off of paper and 100% focused on digital. That was a big piece. Our marketing this year is probably going to come in around 2%, which is lower than it's been in the past. I think that efficiencies we gained during COVID is a really good example. Ours is another one. We've been able to tighten the hours up, which in a rising wage environment, that's nice. Has really allowed us to flow some of that through as you see pretty good operating margins coming out at first quarter and a guide for second quarter. Ken, anything to add? Yeah. Just another structural one I'll throw in there, too, is because we all learned how to operate differently during the last year, John. Look at the buyers and what they've been able to do. In terms of look at the response to the merchandise, and they did it really with a tremendous amount of less travel, right? Yeah. Than we've ever done. I'm sure they're anxious to get out there and get back with the vendors, but we still saw that we could be successful in another environment there. Yeah, there are a good number of kind of takeaways and learnings that we're applying going forward. Yeah. Great. Thanks, John. Thanks, John. Our next question will come from Karen Short with Barclays. Please go ahead. Hey. Thanks very much. Wondering if you could just talk a little bit about maybe some pressures that people are concerned about. I know you said you were in a good position on freight, but wondering if you could give a little color on where you're at in terms of freight on contract versus spot, and then how to think about actually 2022 with respect to freight headwinds or maybe even tailwinds. Also, if you could just give a little color on how you're thinking about inflationary pressures on the wage trend, but also in products in general. Hey, look, on the first question about specifically contract versus spot, we're 90%+ on contract. Spot would only come into play as sales go up and we're exceeding our number of containers. The team did a great job. We locked up our contract rates back in, actually, in 2020. That really helps mitigate a pretty tough environment for the spot rate right now. It's a little early, Karen, to speculate on 2022. I would be surprised if the spot rates stay up that high. The fact that we are such a growth retailer really helps as we negotiate the next year because no carrier wants to lose somebody that's growing the number of containers as much as we are. That's really helpful. It's too early to speculate exactly on the numbers. I think we'll be fine there. I'm not too worried about it. As far as inflation goes, I think it's an advantage for a value retailer like us. We've seen in every other recession or some sort of tough environment, value becomes even more important. We will win with value. I think the difference this time is we now have Five Beyond. If you'd asked me that question two years ago, Karen, it'd be tough. We'd be hitting some pricing ceilings. We have pivoted nicely with Ten Below, which is really a defensive strategy, into an offensive strategy of Five Beyond. The last place we go is raising prices. I think some retailers, that's the first place they go. As we can create more value, we're going to win. We do have now the ability to go above the $5 price point, which is really a nice way to overcome the pressures of inflation. Okay, just on the wage trend? Oh, specifically you're saying, what are we seeing with wages? Well, obviously there's many concerns that investors have, but wage rates rising in terms of where you may be on your wage scale. No, look, we got a couple of things going for us there. First of all, we stay competitive in every market, and our average wage is now around $13. We also hire a lot of 16 and 17-year-olds, and it's their first job. They're willing to work for a little bit less. It's a fun environment. Another nice thing about our stores is, especially with ACO, it's a smaller store. It doesn't take a lot of associates to run a Five Below store. While we're certainly seeing the wage increases, and I think they'll continue to creep with the nice increases in the top line, that's really helped mitigate it. Bottom line, we're not having any problems hiring. We are raising in spot markets where we need to. Overall, the teams have done a really nice job of hiring, and it hasn't risen to any materiality for us. Great. Thanks. Congrats on a great quarter. Hey, thanks, Karen. Appreciate it. Our next question will come from Simeon Gutman with Morgan Stanley. Please go ahead. Hey, everyone. My question is also relative to 2019. The implied guide for Q2 is still way above on a volume basis, but still consistent or somewhat consistent with the Q1 run rate, and compounded on a two-year basis way above where this business has grown on a single year basis, if that makes sense. My question is, it kind of makes the case for a potentially higher normalized growth rate going forward. I know you're not going to guide to any of that now given the environment we're in. Is there a case to be made, and what would have to happen for that to occur, and where would that year come? My second question, unrelated, a little tongue in cheek. Your first half is getting raised effectively by 30%-35%. Is there any reason why the whole year can't be bettered by that entire amount? Thanks. Simeon, trying to pick up that second part. You're asking why couldn't the second half growth rate be as high as the first half growth rate? Is that what you're asking? I was looking at the consensus, which is in the low fours. You're effectively revising the first half by 30%. Can we think about it proportionate? I know you're not guiding for the full year. Thinking about the second half as well, proportionate. Look, certainly the second half, the difference between the first half, you're just up against tougher compares. Clearly you can tell by Ken's comments that we have great momentum going into the second half that we feel really good about. Your first question is a tough one, too. You're absolutely right. We're not going to guide to a higher normalized growth rate, and especially at this point when there's a lot of unknowns in front of us. I think what's more important that everybody takes away is, we're back to playing offense and we're back to opening stores. The 2021 program's almost done. You can see how broad-based the momentum is across the merchandising assortments. We're clearly starting to pick up market share. We've really become the only national kids retailer that's out there. As long as we can continue to deliver extreme value, we're going to keep growing Five Below. Five Below is one that really helps us expand our reach. It moves us into the main gift destination, and it's just another way to deliver extreme value. I don't know, Ken, anything to. Yeah, no, I think you mentioned it, Joel. Simeon, again, you can hear, and just knowing where we've come from, we feel really good about where we finished last year, the first quarter, and then where we are today in terms of sales and customers and brand and market share. Obviously, as I mentioned in my comments, there's just some uncertainty out there from a macro perspective that kind of prohibits us from providing explicit guidance. We do have some tough compares given the business that we had in Q3 and Q4 last year. That's really what we're looking at in terms of not providing guidance. You can hear it from Joel and myself that we're really confident in terms of where the business has been and where it's going. Yeah. Just really happy with the momentum we've got going. Yeah. Good. Thanks, Simeon. Our next question will come from Michael Lasser with UBS. Please go ahead. Good afternoon. Thanks a lot for taking my question. You didn't give guidance, but you gave the parameters on how to think about the full year of a low 20s growth rate this year and last year, which would get you to about 30 basis points of operating margin expansion versus 2019 getting you to a 12.1% operating margin. Why wouldn't it be higher than that? You've seen great leverage in the first part of the year. Why wouldn't the leverage be even greater than that? Conceptually, is 12.1% a level that you can grow off of next year? Yeah. Look, Michael, it's a great question, right? I think given the uncertainties that we just haven't had answers to yet, it's harder for us to put a number higher than that on it without giving explicit guidance. We're obviously trying to figure out the child tax credits that are coming, understanding supply chain. I think any way you slice it, you don't hear Ken and I looking at the second half of the year being a down half of the year. I think there's upside there that we've set ourselves up, and we just got to go keep continuing the momentum and the broad-based strength of our merchandising categories sets us up nicely, and we just need a little bit more time to kind of understand the macro environments. Yeah. Michael, I think the takeaway from that scenario that we provided was that we see the road to a meaningful improvement in operating margins over 2019. I think that's the story there. I know you asked about go forwards, and obviously we're not in a position to talk about that now. The one thing we can reference back to is what we've said historically, where we talk about comps and I think we've always said when we're in that 3% comp range, that gives us the ability to leverage. I think that still holds true when we're in a non-investment period. You can kind of take that and use that go forward from this point. Just can I clarify what, Joel, you said? You previously indicated it would be difficult to comp the comp in the back half of the year given what you experienced last year. Are you now more confident that you'll be able to comp the comp, recognizing there is a host of uncertainties out there, but based on the momentum of the business, are you more confident now? We're certainly, as we obviously get closer and closer to that half, we get more confident. I'm way more confident than I was a quarter ago and more than I was a year ago. Look, we just got a lot more tools of offense to use than we had two years ago. I think you were asking about bottom line earlier. There's some, obviously, Karen asked about inflation, wage inflation, supply chain, and our job is to go mitigate those things like we always have. What's in our control is chasing trends. Michael's team's always done a great job in that. I wish I had the crystal ball on potential shift in consumer spending. I don't have that. Right. I think the prudent thing for us to do is control what we can control, and that's just about delivering an amazing experience with great product at incredible value. When you start looking at it, you and I could sit here on a piece of paper and we could put headwinds and tailwinds down, and they're going to measure out equally one way or the other. There's a good sense of headwinds, and there's a good sense of tailwinds. They balance each other out, our job is to go execute. Clearly, Michael, you can tell from us, we're feeling much more confident about the year than where we were. Makes sense. Thank you so much, and good luck. Our next question will come from Chuck Grom with Gordon Haskett. Please go ahead. Hi, guys. Good quarter. I'm curious if you've updated any of your brand awareness metrics that you've done in the past, and I guess where we are in some of your most mature markets versus some of your more nascent ones. I guess the reason why I'm asking is that your sales per store is moving up nicely. You're obviously getting more customers through the door. I'm curious kind of where some of the more mature markets are resting on that sales per store front versus some of the newer markets. Yeah, look, I think the awareness metric I study the most, Chuck, that I'm probably most excited about is-- I know you're asking about the more mature, but it's really the ones that are less mature. Our zero to two years stores, you don't have to go back too many years ago when that awareness stood in the, let's call it, the high teens. The most recent survey we've done is it's close to 40% now. Utah is a great example. We went into Utah this first quarter, and those stores have opened rather nicely. Record openings, right? Lubbock, Texas, the biggest opening we've ever had. And there's no reason that we would have done that without a higher awareness. By the way, we've done it without any marketing in our new stores this year which was due to COVID. We've been really studying the less mature stores more than the more mature stores because that's the part of the needle we needed to move faster to. You're seeing it in new store productivities, which are hard because you can't measure right now, but that's helped nicely in really improving the productivity of the model. Right. If I could just follow up, is there a way to contextualize what your best stores are comping across the country? Is it $3 million, $4 million per store? We certainly have stores in that range, Chuck. Some of that is contextual to where they're located. It's not always because they're in Philadelphia. It's they're in an urban environment with more density. I think the two factors in the higher volume stores are the density of the store and then the length of time we've been in a market. At the same time, some of those markets, we told you guys, we run about 100 basis points of cannibalization now. We haven't been afraid to impact those stores either. Yeah, that's about the right range. Got it. Thanks very much. Congrats. Yeah. Thanks, Chuck. Thanks, Chuck. Our next question will come from Scot Ciccarelli with RBC Capital Markets. Please go ahead. Hey, guys. Scot Ciccarelli. I have a bigger picture question. You guys mentioned some of the merchandise assortments. For room, you mentioned full-size tables, an expanded pet offering. I know they're only two examples, but I guess I'm wondering if that starts to move you a little bit away from your traditional focus on teens and pre-teens because you're finding higher value items outside of that historical theme. Yeah, look, I think it's a fair question to ask. The answer is no. I think there's a reason we call it room and not home. We really try to still focus on a teen's room, kid's room. Certainly, John Heinbockel was asking earlier about structural changes. Kids being at home more, they want more in their room. Pet is a family thing. The pet adoption trend last year was huge. I think both of those still stay true to it. Could you find examples where you're like, "How does that tie into a teen?" Probably, yes. I don't think it's our intent to move away from that. What is our intent, though, is to still deliver extreme value. The customer, every survey we've done at Five Below has been very positive, and it's because we're continuing to deliver that extreme value. Look, we stay focused on families, teen, parent, but we're not trying to move away from that, Scot. Great question. Got it. Thank you. Yeah, you bet, Scot. Our next question will come from Paul Lejuez with Citi. Please go ahead. Hi, guys. This is Kelly on for Paul. Thanks for taking our question. I was just hoping we could dig into the gross margin a little bit more in Q1. How did product margins do relative to FY 2019? Was mix still a negative impact for you? On the same note, just could you quantify how much the freight negatively impacted gross margins in Q2? Again, relative to 2019 and how we should think about that in 2Q and the back half of the year. Thanks. Sure. Thanks, Kelly. Your first question, the first part was around Q1 and the gross margins there. As you saw, we came in about 70 basis points favorable, if you look at it versus 2019. Again, the key driver there was occupancy leverage. That was actually a little bit more than double of the actual gross margin leverage. That was offset by freight costs for the most part, that we saw in gross margin. As you shift into Q2, it's similar type of dynamics, that although the overwhelming majority of the leverage that we're expecting, operating margin leverage we're expecting in Q2 is going to be driven by SG&A. There are going to be similar dynamics in the gross margin for Q2 where we expect to see occupancy leverage on the sales outperformance. Again, offset for the most part by higher incremental freight costs. Yeah. I think, look, some people are calling out hundreds of basis points. For us, it's in the tens. That's the advantage of growing as fast as we are. The other side of it is, we've been making an investment for a number of years on our distribution network, and we're starting to get leverage there. That's a good guy that goes the other direction, and that's why, when they net it all together, you're still seeing leverage come out of gross margin despite this rising environment around supply chain. As I answered somebody else's question earlier, we've contractually locked up a large percentage of our freight. That's why it's tens of basis points, not hundreds for us. We don't expect it to deteriorate any further than that. Thanks. Thanks, Kelly. Thank you. I can do that. Our next question will come from David Bellinger with Wolfe Research. Please go ahead. Hey, Joel. Good quarter. Appreciate you going into detail about these different worlds and the higher number of those you called out for Q1. On the categories that underperformed over the past year or so, such as party or candy, are you seeing those come back to call it normalized levels? Do they still have room to go? Also, just give us some insight on the space allocated to categories like apparel or even something like pool. Are those flexing and getting more attention in-store than just a few months ago? Thank you. Look, David. Honestly, I called out the top-performing worlds. If I was to take you through all eight, there's only one world that is still underperforming. When I tell you what it is, you're not going to be too surprised. It's party. You can imagine where COVID's been and the lack of parties and all that. I think that's one world that certainly has a lot of upside as America's reopening here. Candy was up against nothing last year with Easter being closed. That was obviously really coming around nicely. Other than party, we're really pleased. Michael's team does a good job. If you go in our stores today, our party section's been contracted pretty tight. That's to give room for some of these other departments that have really taken off. When that starts to come back, we'll flex it back up. Like I said, this is pretty broad-based growth for all our worlds. Yeah. David too, your question about flexing the store, I think that's one of the advantages of the model, the eight worlds in a 9,000 sq ft store, that we can flex it based on the customer's preferences and response. It actually gives us an advantage from an assortment standpoint to put that product in front of the customer and really show it out there, whether it's a trend or whether it's just certain departments that we want to highlight. Thanks, David. Our next question will come from Jeremy Hamblin with Craig-Hallum Capital Group. Please go ahead. Thanks. Well, I have my congratulations. Welcome back to the performance in Q1 versus 2019 levels. The 23% growth versus 2019. Kind of as we move here into Q2, I think the implied guidance suggests that basically you're comping similar levels versus 2019, kind of that 20% plus versus 2019, despite the fact we don't have any stimulus juice here in Q2. Why do you think the relative performance has maybe not only sustained, but probably you could argue is maybe even better than in Q1? Yeah, look, I'll take the second half of that, and Ken, do you want to comment? Sure. Jeremy, I tell you, I give a lot of credit to the merchants. We've got several trends out there right now. You can tell just in the last question, I was going back and forth with David on they've done a great job of really bringing it in. We've been flexing the store. That treasure hunt makes for a great environment for customers to pick up a variety of different things. It's a good economy out there right now. I'm glad you picked up on it, Jeremy. That's why you're not seeing the deceleration coming into the second quarter. A lot of momentum. Yeah, the first part. Yeah, Jeremy, you called out the growth rate that we spoke to, which was that comparable set of stores that were open in both the first quarter of 2019 and this past first quarter, the 23% growth rate. If you dig into that, we saw transactions down single digits, obviously the opposite of that was the tickets to get you to a 23%. A very healthy ticket response from the customer. Similar to what we saw back in the second half of last year when we came out and opened up the stores post-pandemic. Tickets really been driving it. Yeah. Thanks, Jeremy. Thanks. Great job. Yeah, thank you. Thank you. Our next question will come from Anthony Chukumba with Loop Capital. Please go ahead. Anthony, yeah. Congrats again on a really strong quarter on start to the year. I guess my question, I remember the days of talking about different fads, whether it was fidget spinners or Rainbow Loom or Was it Rainbow Loom? I don't remember the name anymore. It doesn't really matter. I guess my question is, which makes your performance all the more remarkable because we haven't had a fad, at least that I can remember, in quite some time. I guess two questions related. One, is there anything that you guys are seeing right now from either a fad or a trend perspective that's worth calling out? Then second, somewhat related, I know you had some strength with mask recently, given the pandemic. I guess, are you seeing that kind of reverse, given that we're beginning to get to the other side of it? Thank you. Look, all the PPE stuff is certainly reversed and slowing down quite a bit. We're in a good position inventory-wise. No inventory liabilities. In terms of specific trends, I think it's pretty broad-based right now. I called out pet earlier as one example. Squishmallows is another that's been out there for a while that I would call out. I think the bigger one is just the gaming is another one I called out. You put them all together, and it really leads to driving a lot of footsteps, and we're chasing them all, and the merchants are following up and pivoting as new things come up. Sorry, guys, we just realized that it's almost 5:30PM, so we're going to go right into our conclusion, and then we'll pick up in a little bit here. All right. Hey, thank you. We appreciate everybody joining us today on the call. As you can tell, a lot of great questions, and hopefully Ken and I answered all those, and we look forward to seeing you in our stores, and we'll speak to you again the end of the summer. Thanks all, have a great evening. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.