Welcome everyone. To kick off our program, please welcome our Vice President of Investor Relations and Treasury, Christiane Pelz. Everyone, welcome to Five Below. It is so nice to see all of you here today. Thank you for coming. Good morning as well to those watching virtually. This is a very important day for Five Below. It's our first ever Investor Day. It's a big milestone for us. We are here with our entire leadership team, who are very excited to share with you insights about our business and to meet you. Joel Anderson, our President and CEO, and Ken Bull, our CFO, will start with a quick review of Q4 and fiscal year 2021, and then Joel will introduce our growth vision for 2025 and beyond. Excuse me. Our executives responsible for components of our growth strategy, including product, supply chain, and experience, will discuss their respective areas. We'll take a quick break at that point, and then Ken will share more on our long-term vision and thoughts on fiscal year 2022, which, as you may know, is a unique year for us. At that time, the formal part of our presentation will conclude, and then we'll open it up for Q&A. I'll give more information about the lunch and the store tour and the meaning of the dots on your name tags at that point. Throughout this presentation, we may make certain forward-looking statements that pertain to our future. These statements reflect our knowledge, our current forecast based on our knowledge of our business today, and we are under no obligation to update these statements. In addition, actual results may differ materially from these expectations due to risks and uncertainties as outlined in our public filings. Now, before I turn it over to Joel, we're excited to show you a short video taking a look back at where we came from. I, too, wanna welcome you to Five Below's first ever Investor Day. I would remind you, though, this is not the Academy Awards. This is the Investor Day for Five Below. We will have no unwelcome guests joining me on stage this morning. We got lots of candy back there. It's not for looks. It's there for you to eat. If you see some special item, enjoy that too. Where's Janet? I was talking to you earlier. I know you want those Burt's out there. They're for you, so enjoy. Seriously, we're here to have a lot of fun, and what's amazing is that we're in person, right? It's hard to believe that. Being in person is amazing, but it's great to see all of you. We are looking forward to having you here, and I promise you will not be disappointed. I wanna recognize that there's also a lot of people with us online, and I thank you for also joining us. Behind me, you'll see a deflated basketball. Allow me to tell you the story. It is something that we give to everybody at Wowtown, that's our corporate headquarters, and our field leadership after they successfully complete their first holiday. It's iconic. It's a tradition at Five Below. It serves as a reminder for all our associates that we wake up every day and our goal is simply to break the paradigms of retail. There's no packaging, there's no box, there's no air. All of that saves on freight. It takes costs out and allows us to bring an unbelievable item with distorted value to our customers. That's what we do at Five Below every day. My basketball also has a number on it. It's 331. That serves as a reminder of how important growth is to Five Below. We've nearly quadrupled the number of stores since I joined. Now, listen, we're gonna have a great event today, but we're gonna be fast. We're only gonna be up here for an hour, and then we'll take a break, and Ken and I will come back for guidance and a Q&A session. Finally, the most exciting part of the day is we're gonna finish with a tour of our new store, our new prototype. I hope you are as excited to see it as we are eager to show it to you. It's Five Below's newest growth vehicle. Let's get started. What a milestone today is. It's hard to believe that it's only been 20 years since Five Below was started just outside of Philadelphia. We've come a long ways from the beginning. Many things have changed, but I wanna talk about what hasn't changed. While that store, that picture you see, is only 4,000 sq ft, it was a unique concept then, and it still is today. It's never been replicated. There isn't a mirror image of Five Below. It was built on the values. It was built on a foundation of incredible value in a fun treasure hunt experience. Five Below was created for tweens and teens. It was a place where they could spend their allowance and call Five Below the yes store because mom always said yes. It took us 10 years to perfect the concept of Five Below, and that was validated with our IPO in July of 2012. This year marks the tenth anniversary of that celebration, and what a celebration it was. Sales have grown 10x, operating income's grown 15x, our operating margins improved 400%, and our stores, well, they're up 6x. All this growth, and we are just getting started. Now let's quickly turn to Q4 and our 2021 results. It was a record year for us in a very tough macro environment. As I share these results, we will do that and then turn to our future growth vision. I'm gonna ask Ken Bull to join me up here to look at these results. While Ken needs no introduction, as everyone in this room and online knows Ken. He's been with us since 2005. I wanna share this fun fact. His basketball number is 27. Ken has seen it all. He's taken Five Below from a great concept to what we are now creating is a great company. Let's turn to the results. As I said, what a year it's been. We opened the most stores ever, 171 to be exact. Just weeks into 2022, we've already crossed the 1,200 milestone. The trends, well, they're the strongest in our history. Squish and sensory and Slime Lickers all at the same time. In fact, Squish even became a craze. We love all our trends as they expose new customers to Five Below, and then they come back and become loyal. We've also made significant advancements around product, experience, and supply chain, and you're gonna hear more about that. With that, Ken, I'll turn it over to you to share the financial results. Great. Thanks, Joel. Good morning, everybody. Really great to see everybody live and in person for probably the first time in a while. As Joel noted, 2021 was an amazing year for Five Below. We finished the fourth quarter with nearly $1 billion in sales. Actually, it wasn't too long ago, in fact, it was in 2016, when we first reached the annual $1 billion in sales milestone. Included in the fourth quarter was a great holiday season, where for the nine-week period, we achieved a 7.7% comparable sales increase on top of last year's 10.1% increase. Total sales for the fourth quarter grew 16%, and we achieved a 3.4% comp sales increase, which was driven both by an increase in transactions and ticket. And, which was on top of last year's record fourth quarter comp increase of 13.8%. As expected, January was a difficult comparison against last year's 38% January comp increase as we were lapping stimulus payments. Additionally, we experienced unfavorable weather in the back half of the month. We opened a record 17 new stores in the fourth quarter, and going forward, we'll continue to open more stores in Q4 than we have historically as our store count, geographical footprint, and capabilities increase. Gross margin increased by about 10 basis points over last year, driven by efficiencies and leverage, which were partially offset by higher inbound freight costs and the shift in store freight we discussed on our third quarter call. SG&A expenses of 21% were about 100 basis points higher than last year, driven by higher store expenses. This all led to an operating margin of 18.8% and diluted earnings per share of $2.49, which was a 13.2% increase over 2020. Additionally, we also executed $60 million in stock repurchases in the fourth quarter, buying back about 369,000 shares. Now turning to the full year, I'll compare our results against 2019 as 2020 was impacted by store closures due to COVID-19. Sales for the year were $2.85 billion and grew 24% on a two-year CAGR basis. For existing stores, we achieved a record $2.5 million average unit volume. Looking at profitability, gross margin was down about 30 basis points due to higher inbound and outbound freight costs and SG&A expenses finished at 22.8%, which was 190 basis points lower than 2019, driven by leverage of store expenses and lower marketing spend. Overall, operating margin for the year was a record 13.3%, up 160 basis points versus 2019, and up 100 basis points compared to our previous record in 2017. Diluted earnings per share for 2021 was $4.95, which was more than 1.5x 2019's diluted EPS of $3.12, and a 26% two-year CAGR. We ended the year with 1,190 stores or a CAGR of 15% on a two-year basis. We also remodeled 45 stores during the year. Ending inventory on a per store basis was up 6% compared to a more normalized 2019, and our balance sheet remains strong, with a cash position of $380 million and no debt. CapEx for the year of $288 million was driven by new distribution centers in Arizona and Indiana, 171 new stores and 45 remodels and investments in systems and infrastructure. With that, I'll turn it back to Joel. Joel. Thank you, Ken. There's a lot of numbers to absorb. The team worked really hard in 2021 to accomplish what we did, and I'm so proud of those results. Now let's turn to why we are all here, Five Below's growth vision for the future. In order to do that, though, you've got to look backwards in order to look forward. I wanna remind you what our last vision was that we shared with you in 2016. It was quite simply, 20/20 Through 2020. We're gonna grow the top line 20%, and we're gonna grow the bottom line 20%+, and we're gonna hit 1,000 stores in that period of time. Let's see how we did, right? We focused on disciplined, profitable growth. Those sales, well, they grew on a six-year CAGR, 23%. The bottom line, 30%. We hit those stores, 1,020, and our earnings per share was up 5x. This was significant leverage, especially for a growth company, as we realized several scale benefits. Now, hopefully that gives you confidence that we're going to achieve what we're about to outline for you in the future. Five Below is about execution. If we're gonna continue to grow, it always starts with people, right? You know several of the people on this slide. You certainly know Ken. He just finished up here with me. You're gonna have the opportunity today to interact with all of them, and everyone on this slide is gonna join me up here in a little bit. Now, look, this team was with me throughout the overwhelming majority of our 2020 through 2021 journey. This team was instrumental in guiding Five through our last vision, and they're gonna be important in our next vision. They are a reason for our continued success. They helped us play offense, they helped us accelerate our growth, and I couldn't have done it without this team. Listen, my proudest accomplishment through our last journey was what we've done to build out the broader team. Now, most of this team, you have not met. In fact, only Aaron Bookman was with us when we went public, and I'd encourage you to interact with Aaron. He knows a lot about our history. He knows how important execution is to us and how important building out a great people culture. We were purposeful with building out this team. We chased some of the best talent in the country, we built new capabilities, and most importantly, we built a stronger foundation for our continued growth. I'd encourage you today to meet as many as possible. Hopefully, you met some of them out here for breakfast, and you're gonna have that opportunity at lunch. Specifically, on the tour of our store, you're going to meet Todd and Idalia, and Felipe Zardo is gonna join us also up here in a little bit. A big thank you to this entire group. In fact, I give a big thank you to our entire Five Below crew. They are the ones that constantly unleash their passion so that we can achieve the impossible every day and wow our customer. It takes people like this that have the right mindset to wake up every day committed to delivering our purpose and, quite frankly, making an impact in the communities we serve. Speaking of purpose, it's real simple. We try and create an environment for our customers, a place where they can let go and have fun in the most amazing experience, where they can buy the newest, coolest stuff. My goal is that 100% of our customers hear these five words: "Hi, welcome to Five Below." It puts a smile on their face, and they know that they've just entered the fun zone. As I said, we also have a deep commitment to the communities we serve, and ESG gets at the heart and soul of who we are. I'm proud of the progress we've made in this area. Throughout the day today, you're gonna hear specific, meaningful examples of what we've done. In our proxy later this spring, you'll see a full report. Okay. Listen, enough of the warm-up. Let's turn to the specifics of our growth vision. I'm very excited to share with you today our future vision is called the Triple- Double. That's right, the Triple -Double. We now believe we have the opportunity to triple our U.S. store base to 3,500 by 2030, and we'll double sales, and we'll more than double earnings by 2025. That's our Triple- Double. We are still a strong growth retailer. In fact, you might even say we're accelerating growth because the numbers we're talking about now aren't only big in percent, but they're big in dollars. So how do we get there, right? What are the details behind the Triple- Double? If you're gonna have the same conviction that you did for the 20/20 Through 2020 vision as you are going to have for the Triple- Double, you need to understand our framework for success, and it's real simple. There are five drivers. First, innovation. It's all about a culture of innovation, and you'll hear about that. Second, product. It's pretty simple. How do we continue to distort value with relevant trends and constant newness? Third, supply chain. That's all about controlling our destiny so that we can drive speed, visibility, and efficiency. Fourth, experience, which is about executing amazing fun every day. Fifth, growth. We'll give you the details how we will remain a disciplined, profitable deliverance of growth. Let me start with the meaning of culture of innovation, and then I'll turn it over to the team for the remaining four drivers. All right. In order to drive our Triple- Double, you have to see innovation, and innovation for us shows up everywhere at Five Below. It shows up in big ways, and it shows up in little ways. Where it's most visible to our customers and, quite frankly, all of you is in the continued evolution and optimization of our prototype. Allow me to take you through a quick journey of that prototype so that you understand where we're going, and you understand how fast change is continuing to happen at Five Below. The prototype is a measurement of all our success. It's a measurement of how we deliver amazing experience to our customer. The first evolution, which you see on the screen behind me, took place in 2008. That prototype we call Vintage. It was introduced in 2008, and it was a racetrack layout. By racetrack, we meant easy in, easy out. We doubled the size of the store to 7,000 sq ft, and keeping this easy-in, easy-out environment was important to parents at that time that Five Below was still a safe zone to parents. Today, that prototype is only in 30% of our chain. The second iteration was our Fresh Prototype. The Fresh Prototype was introduced in 2017. It's what we called a runway layout, one way in, one way out. It was also our first attempt at creating an environment that delivered on our purpose of let go and have fun. The store was brighter. The shelves were white. We invested in music. We had fun, interactive departments like Sugar Rush and the Five Dollar T-Shop and Five B Style. While the wheelbarrows remained, they got stacked, and they became much more interactive. The size of the prototype, it grew again to 8,500 sq ft and now represents about 40% of our chain. The next generation, well, that one only took three years to improve the experience once again, and that's when we introduced the Beyond Prototype in 2020. Quite honestly, we perfected the idea of easy in, sticky out. As the shops became more defined, we expanded the customer value to $5 and beyond. We imagined new trip occasions and new rituals to celebrate. We also completely reimagined the checkout experience. Finally, for the first time ever, we eliminated lines at Five Below at holiday. Once again, the prototype grew and now 9,000 sq ft, and it represents about 30% of the chain. Where do we head next, right? I'm gonna ask Michael Romanko, our Chief Merchandising Officer, to join me in a minute up here and share the details of our product journey. Most of you know Michael. Michael's extremely passionate, more passionate than me. He leads our merchandising organization. He heads our product development, our sourcing, and our brand marketing initiatives. Michael's been with us since 2015, and his basketball number is 364. That's a triple for Michael. Michael's gonna share our product vision with you, and as they say, a picture's worth 1,000 words. A video must be 1 million. We're gonna give you a quick sneak peek what you're gonna see this afternoon on the store tour. Then Michael will join me up here to share the details. Let's roll the video. Thank you, Joel. Good morning, everyone. I get a chance to talk about product. Good morning, everyone. All right, there we go. It really is so nice to see everyone. You know, for those of you that have been following us for a while know that our eight worlds haven't changed. Not only have they not changed, it's one of the reasons that we're set apart from other retailers. We're not category constrained like those other category killers. In fact, we're just the opposite. It's our eight worlds that remain relevant, give us that flexibility to give that constant growth and innovation. I think all of you know how much I love growth and innovation. Really, what I should have said, our eight amazing worlds. That's what allows us to find, we source, and we bring all those unbelievable items to the customers. No other retailer offers the relevant trend-right product at our incredible value. We're trendy, we're not spendy, but we're always relevant for way low prices. We never sacrifice on quality. From sweets to sensory toys, bluetooth to bedroom decor, and the latest style. I like to say, "Wow me now." Right? It's our amazing product and expert merchandising that really is a foundation of what we do. Value never sleeps. We are determined on having Five Below be the number one choice for teens and tweens. You know, it is the eight worlds that I just spoke about that have given us the license, the freedom, the ability to celebrate the rituals of life and milestones of growing up. The more rituals and milestones we serve, the more successful Five becomes. Like, I want you to think about this for a second. What other specialty brand. It's not a quiz, but what other specialty brand has those marching orders? We are the yes store filled with fun that makes you smile. We celebrate those rituals of life and milestones of growing up every day. Getting your ears pierced? Yes, we are piloting ear piercing in 150 stores. Balloons on a budget? Now that's a party. We are piloting an expanded selection of balloons in 250 of our stores. Having your own room is a big milestone. Guess what? Our room world really allows kids to create their own personalized space, from blankets to pillows, wall decor, and so much more. Who remembers getting their first car? Yeah, that was a huge milestone. I wish I had a blinged-out steering wheel, but we have it now at Five Below. I will tell you, it's an unbelievable value, and the kids are going to feel unbelievably special. We love our pets. Do you know over 23 million pet adoptions happened during the pandemic? Are you ready for this little pun? We are positively hyped to bring more fun to our furry family members. Yep, we curate the best products each season for our customers. You know, we care about kids, and kids care about the planet. That means Five Below cares about the future of the planet. We are striving to be so much more eco-conscious with our products and packaging. In our tech world, we have reduced 400,000 pounds of paper and plastic per year with our new cable packaging, which is 100% recyclable. By incorporating less packaging, we are using less cardboard and less plastic. There's an added benefit. We're just gonna save about $1 million per year in freight and packaging on just this one item. Our young customers are caring deeply about the environment, and it's our turn to do our part to help the planet. Didn't you just love that video a few moments ago? I mean, seriously. I am so excited to have the chance to unveil the ever-evolving Five Below prototype. I want you to think about it like this. Crawl, walk, run. Our first phase was crawl. Five Beyond was simply extreme value items on a shelf. Today, the phase we're unveiling is walk. Think about Five Beyond as a store within a store. It's easy to shop. It's light, it's bright. It's an inviting experience filled with unbelievably great product with impactful signage. No, I cannot imagine what the run phase will be, but we will save that for another time. Honestly, I really am excited about what we're gonna unveil today with the iteration of what Five Beyond actually is becoming. It's going from a concept based on items on a shelf to the unveiling of a store within a store. You're gonna see it later this afternoon on the store tour. Let me give you a few fun facts. First, we expect mid-single digit lift for all our remodels to the Five Beyond prototype. Second, we know our customers who buy Five Beyond product spend 2x the amount the typical basket size. And third, we have seen 50% higher units per transaction. Can you blame them? The Five Beyond experience is here, and the value distortion is clear. In addition, we are also unveiling our new reimagined tech department, which you're gonna also see later on the store tour. We are the pros at bringing disruptive product at extreme value while always focused on relevancy, whether it's a trend, a craze, or new licenses. What do we do? We find them. We distort them. Like Joel spoke earlier with the recent trends, Squishmallows, Slime Licker, and sensory toys. We love them all because they do expose us to more customers who then love the brand. One of my favorite topics you've heard me speak about is our scale and leverage, and this has allowed us to capture more market share with key licenses with big companies and big brands like Disney, Marvel, Squish and Bugha. Bugha? Yeah, he is the Fortnite World Cup champion who just claimed his third consecutive Fortnite Champion Series title. He is more than just a gamer. He is a world-class influencer, a champ, and he's only available at Five Below. With Bugha, the team collaborated, we created, and we launched a gaming brand within a champion himself. It is these exclusive relationships that really allow us to create and bring our own direct-to-retail items. I love to say it, we're about cool stuff and amazing product and all that innovation which keeps us going, but we're also here to inspire. We do this in a fun and cohesive store environment where merchandising, marketing, visual come together and make everything fun. You're gonna get to see it later in action on the store tour with Tom and Idalia. Do not forget to shop. Remember, extreme fun, extreme value, that's how we do it at Five Below. I'm gonna leave you today with this awesome video highlighting one of our current trends, Squishmallows. It's the power of this video that's gonna show you the power of Five Below and the loyalty of our customers. I hope you enjoy it. Thank you, and have fun. Wow, that's a fun video. Thank you, Michael. I couldn't be more proud of the entire merchandising organization for what they've done to create Five Beyond. This is truly gonna be an exciting growth opportunity for us. Now let's turn to the supply chain. This is an area we've made a heavy investment in the last five years in both people and infrastructure. Speaking of people, we hired Rich Tannenbaum. He's our Senior Vice President of Supply Chain. I encourage you to meet him as well at lunch. Rich reports to Eric Specter, our Chief Administrative Officer. Eric is now gonna join me to share the progress we've made on our journey for the supply chain. Eric's been with us since 2014. His basketball number is 336. That's a quadruple for Eric. In addition to supply chain, Eric also leads our planning and allocation teams, as well as real estate. Eric has a true end-to-end perspective of everything that impacts our supply chain. Eric? Thank you, Joel, and welcome everyone. Really great to see everyone, and thanks for joining us this morning. Joel talked about going public in 2012. Back then, we just had one small distribution center in Delaware. Our supply chain network looks quite a bit different now. For those that have been following us for a while, you know that we've been making significant investments in our supply chain over the past four years, specially focused on our distribution center network, so we can quickly and efficiently distribute product to our stores and our customers. Since 2019, we have opened the doors on a brand-new distribution center each year, ending with our latest in Indianapolis that's getting ready to be fully operational this spring. Building out this network has been a $400 million investment over the last 4+ years. We look at this as a strategic investment by purchasing our distribution centers and investing in technology and automation. We saw the importance in controlling our destiny by building out our five-node distribution center network, servicing most of our stores in one to two days. We also added e-commerce fulfillment capabilities at three of our distribution centers to support our online customers. We have started to see the benefits of scale throughout our supply chain as we have continued to grow and mature our capabilities. For example, we've been able to reduce the average distance to our stores by nearly 40% over the past several years. These benefits have helped us to successfully navigate through the challenges that presented us themselves over the last two years and continue here into 2022. Scale and control are two major themes we think about our global supply chain. First, a few key points on how we leverage scale as we continue to grow. The current distribution center network can service 2,000+ stores. Our shared inventory model, where we have inventory for all channels under the same roof, gives us flexibility to manage inventory at stores and to support our omni-channel initiatives, including e-commerce fulfillment, BOPIS, and ship from store. Our continued growth and scale of the business enable us to drive efficiencies with speed and accuracy, moving our product faster through the network. We have begun to implement engineered labor standards to drive additional productivity, activity increases to help offset rising wages. We also implemented scanning technology in all distribution centers, decreasing the time it takes our stores to move product from the back door to the floor by eliminating approximately 50 million carton scans annually. Continue to build and develop strong relationships with key vendors globally. These relationships foster innovation, provide greater efficiencies, and give us more control over our sourcing, creating a more streamlined and efficient supply chain. For example, these strong relationships enabled us to proactively secure multiyear ocean container contracts that cover approximately 90% of our product demand for 2022 and 2023. Shifting to control. Our Five Below-owned distribution centers give us better control over our network to service both stores and customers. In fact, our existing distribution centers have a total expansion capability of over 1 million sq ft to support our upcoming growth. Related to our sourcing strategy, we have plans to increase our direct import penetration to approximately 50%, providing a range of benefits, including product development and innovation, speed to market, and logistics management, all to deliver the wow product at extreme value that Michael just spoke to. To support the growth of our business, we are continuously diversifying and expanding where we source our products from globally. We've developed important relationships in countries like India and Vietnam that allow Five Below to deliver amazing values to our customers. We've also established bicoastal consolidation points on the East and West Coast to consolidate domestic vendors' product. This drives lower freight costs and improves our upstream visibility. We have had success piloting our own truck fleet with good ROIs while gaining more control in timing, consistency, and reliability in delivering product downstream to the stores. At the end of the day, with all the uncertainty in the world, we're taking control of our own destiny. Okay. Thank you, Eric. Okay, Joel. It's a lot that Eric had to unpack there. It's no small feat what we've accomplished. Think about it, a new 1 million sq ft distribution center a year as we continue to take control of our destiny. It's been on time and on budget, and it's been a massive unlock for the service to our stores. Now, speaking of service, let's turn to our fourth driver, the experience in our stores and on digital. To do that, I want to have Judy Werthauser join me on stage. Judy is our Chief Experience Officer. She's been with us since 2019. Her number is 755. During this Triple- Double vision, she's gonna experience a triple. Judy leads several of our teams like strategy, data analytics, technology, and our people teams. All those teams help us improve our experience. Felipe Zardo is also gonna join us on stage with Judy. Felipe's number is 975, and he'll experience a double during this Triple- Double vision. Felipe is a great example of the amazing talent we hired during the middle of the pandemic, and he leads all of our digital efforts. I'm gonna turn it over to them for an overview of our journey to improving our experience. All right. Thank you. Good morning. It is so great to be here with you all to highlight our focus on our customer and also share more about how we care for our crew and community, all of which helps to fuel our growth. As you heard from Joel, Michael, and Eric, we always walk everything back from our customer, and we continue to focus on learning who they are, how they interact with Five Below, and how we further shape the experience to expand their engagement with us. One of the critical investments that we have made over the last few years is leveraging data to drive improvements throughout our business. Examples include improving productivity, perhaps, maximizing our store potential, and perhaps most importantly, deepening our knowledge and relationship with our customer. I'm going to turn it over to Felipe, who's going to share more about how we create and leverage this data to create more amazing and relevant experiences. As Judy mentioned, every decision we make begins and ends with our customers in mind. This has been true at Five Below since day one. Our founders, Tom and David, would speak to every customer that walked into that original store in Wayne, Pennsylvania. Those interactions provided them key insights that allowed them to dial in both the experience and the assortment. As the business grew, we layered on other means to collect information, like mining our point of sale data and leveraging customer panels to improve our knowledge. As the business scaled and the quantity of data that we collected increased, it was quickly becoming too transactional and relatively anonymous. We saw an opportunity to get back to that intimate knowledge that Tom and David had in those early years, but at scale by leveraging modern tactics and techniques. To support that vision, we made strategic investments in data and analytics that are helping us understand the behaviors of individual customers, unlocking richer and deeper insights into how individuals are interacting with the brand. This is providing our teams with data on customer lifetime value, customer product and category affinities, and their omni-channel behavior. These insights have broad applications across the entire business to drive sales, but one area that really stands to benefit is marketing. While it is still early days, our teams have started to deploy our new learnings into how we acquire and retain customers, and we are very pleased with our initial results. Ultimately, we see these efforts coming together underneath our Five Below loyalty program by 2025. We are taking our time with this because we simply do not want members in a database. We see an opportunity to harness the innovative thinking that has been the catalyst for our continued success to create a program that builds long-lasting relationships with customers by providing personalization, value, and relevance. We also leverage our qualitative and quantitative understanding of our customers as a key input into how we design and deliver amazing experiences for them. Assisted self-checkout is a great example of how we do this in our unique Five Below way. Assisted self-checkout is a result of customer feedback that we received during our busiest days. Customers told us that while they love visiting our stores, waiting in line to pay was a hassle. Our teams got together and delivered a solution that is knocking it out of the park. Customer feedback for assisted self-checkout has been off the charts. They love the speed and convenience that it provides them. If that wasn't enough, the design also freed up additional space on our sales floor to allow our merchants to assort even more amazing product. It pulled our crew out from behind a cash wrap, allowing them to interact with customers where it matters most, on the sales floor. This truly represents the culture of innovation that we have here at Five Below. Assisted self-checkout is already available in 60% of our doors and will be chain-wide by 2025. George will take you through the experience during the store visit later. Another area I wanna highlight today is digital. It is probably not a surprise for you to hear that our customers are asking us that they want for more ways to interact with the brand digitally. Our new data and analytics capabilities are telling us that when customers engage both in stores and online, they have higher brand affinity, they have a better retention rate, and they spend more. Which is why I am so excited about the digital experiences that we're bringing to our customers. In summer of 2020, we deployed our Five Below app to complement our dot-com experience. This put Five Below literally just a touch away. Last year, we provided even more convenience for our customers by enabling same-day delivery in all of our markets. Later this year, we will roll out ship from store in select locations and buy online pickup in store across the entire chain. This will truly create an omni-channel experience that is seamless for our customers. This is just the beginning. We have additional investments planned in the coming years to further enhance how customers can interact with Five Below digitally. At Five Below, we believe an amazing customer experience starts with our crew. As you can see in these photos, they live our purpose of letting go and having fun. They are a huge part of our winning formula, and we're now 20,000 strong, and that number doubles during holiday. Speaking of doubles, here's a fun fact. We've doubled the size of our crew since 2015, and we'll basically double it again by 2025. We leverage our Five Below way to create a culture where they feel included and belong and bring their unique personality to bring our purpose to life. Connected to our purpose to let go and have fun are five values that we live by every day. Wow our customers, where we commit to delivering incredible value and creating a positive difference in the lives of our customers. Unleash your passion, aiming to leverage the superpowers of our crew to make a difference. Hold the penny hostage, showing our commitment to efficiency and reinvesting value for our customer. Achieve the impossible, our internal challenge to go beyond and think big. Work hard, have fun, build a career, where we commit to creating possibilities for our hardworking crew. Our purpose and values drive a highly engaged team, and we're really proud to say we are in the top quartile in overall satisfaction according to Gallup. I'd like to bring our purpose to life for you through the eyes of one of our customers. It's a story from a mom of a little boy named Henry. Last year, Henry, who's from Minnesota, had to have back surgery. One of our leaders discovered a post Henry's mom made on Facebook while he was in the hospital. In her post, she said, "Henry's really looking forward to getting out of here. He can't wait to go to the store called Five Below. He's requesting two toys and one candy." Living our purpose of letting go and having fun and creating an amazing experience with unlimited possibilities, our store crew sprang into action. Rather than tell you what they did, I'll let Henry's mom tell you from her next Facebook post. "Following Henry's back surgery, Five Below contacted us after some of Henry's followers called in and shared his video from the hospital. They closed down their store and gave Henry a shopping experience of a lifetime. We couldn't believe how amazing they made this experience for him. Shout out to Five Below in St. Cloud, the one we frequent the most." Creating moments and memories like this for Henry are at the heart of our purpose. Our crew made all the difference to this one family. What they did, it isn't in our employee handbook or our training guide. It's not something we teach. It's a spirit that lives in our team every day. I think Henry has become a customer for life. The value of creating a positive difference extends beyond the walls of our stores and distribution centers and into our communities. There's nothing that gives our crew more pride than serving the communities in which we work. Take a look at some of the different ways we partner with local charities to make a difference. Of course, our partners focus on kids in need, and we are proud to be in a position to contribute. This year, we're excited to set a goal of $10 million in giving, and that means that by the end of this year, we will have raised $40 million since going public. In fact, our St. Jude campaign is currently running, and we invite you all to participate in this giving campaign later today when you visit our store. On behalf of our customers, crew, and St. Jude, thank you. Our focus on building an incredible experience in each store we operate and each community we live in, starting with our crew, is a huge differentiator for us. Our customers love Five Below, and we are just scratching the surface of the amazing relationships that we can build with them as we continue to learn more about who they are. We have a saying here at Five Below, "There's nothing but upside." The combination of our focus on customer, crew, and community to drive our experience positions us well for our next stage of growth. Thank you. Thank you, Judy. Thank you, Felipe. As you can tell, experience is at the heart and soul of everything we do. Stories like the one Judy shared happen every day at Five Below, and that's what's so amazing about this brand. Now I wanna turn our attention to our fifth and final driver of our Triple- Double growth vision. Joining me now is George Hill. He's our Chief Retail Officer, and George leads our entire stores organization. George has been with us since 2017, and his number is 555. That's a double for George. The stores organization is also, in many ways, the recipient of and must execute all our growth initiatives. Who better to share the vision of our growth than George Hill? George? Thank you, Joel. Hey, good morning, everyone. Again, how you doing today? That was a little bit of active participation there. Sorry about that. Okay. Hey, honestly, I couldn't be more excited about the opportunity I have to share with you a vision of our oncoming record growth. So far, you've heard Michael speak to the relevancy of our products and the flexibility of our eight worlds. Well, that equals growth. Eric spoke to our supply chain infrastructure and the ability to build capacity to help grow our business. Well, that equals supporting our growth. Judy and Felipe, you just heard from, spoke to a deep understanding of our customers, of our crew, and of the importance we place on serving our communities. Ultimately, this informs, it shapes, and it guides our growth. To be clear, we've been a high-growth retailer, and let me tell you something, we're gonna continue to be a high-growth retailer. How much growth? Well, earlier you heard Joel speak to when he unveiled our Triple-Double, and I'm gonna provide you context, more context to what this really means. We'll triple our U.S. store base growing from 1,200 stores today to over 3,500 stores by 2030. Listen to me. That's 10x as many stores as we had just in 2015. We'll double our top line, and we'll more than double our earnings per share by 2025. As I said, our supportable store base potential now is to operate over 3,500 stores in the U.S. Said another way, we believe Five Below Anywhere. We believe in that deeply, and here's how. We're expanding in the new geographical markets, and as we continue to scale outside our home base of the Northeast, we are encouraged by our new store opportunities. For instance, growth in states like Texas and California and in Florida, they've provided much bigger opportunities than we had first originally planned. Those states now have a larger store count than our home state of Pennsylvania. We continue working with leading analytics firms to help define our future growth, identifying more opportunities for Five Below Anywhere across the U.S. Our urban opportunities are stronger than we originally thought, too. In fact, in 2022, we'll open 15 new stores in urban markets. 11 of those will be right inside New York City. We've learned and are executing on our ability to densify suburban markets, and I'll show you an example of that in just a moment. In addition, we continue to be very encouraged by the performance in our smaller semi-rural towns. This is what we think of internally as a semi-rural surprise, with several stores exceeding our initial sales volume expectations. As an example, our Flowood, Mississippi store ranked in the top five overall stores for us in total volume last year. Like Flowood, some of our top-performing stores are in these smaller semi-rural markets, including towns like Ashland, Kentucky, Charleston, West Virginia, and Hammond, Louisiana. That's just to name a few. Another example of innovation you heard Joel speak to when he first started. Innovation is about Five Below Anywhere, our recent store opening in a working distribution center. Now that's a first. As we continue to see strong performances across these diverse markets, combining store growth with our emerging digital experience you heard Felipe speak to, we've no doubt created a model that enables Five Below Anywhere. As I mentioned previously, we have a unique opportunity to densify store locations inside established markets. As an example, here's a view of our oldest market or DMA in our hometown of Philadelphia. I wanted to share this market with you specifically because it's our oldest market, and it's one of our most dense. Yet you will see significant growth opportunities. This is also an example of how we will realize our overall store potential now and again, over 3,500 stores by 2030. Let's take this journey together. We opened our first store in Wayne, PA in 2002. At the time, we believed we could grow this market to about 20 stores. As the success of our brand and our value offering continued to grow, in 2012, we are proud to say we opened our 30th store in the Philly market. Over the next 10 years, we grew our store count in Philly an additional 30 stores. To that end, we will finish this year, 2022, with over 60 stores in the Philadelphia market. That's more than double where we were in 2012. You know what? We're not even close to being finished. Here's the future view of our hometown. Over the coming years, we believe we can double our store base again, successfully densifying the market to over 120 stores. You know what? You talk about Five Below Anywhere. That's big. As you can see, we're rapidly becoming a coast-to-coast, border-to-border retailer. We are committed to accelerating new store growth over several new markets and over the years to come to deliver on our long-term potential. Our plan is to open 375-400 stores over the next two years. We also plan to open approximately 550-600 stores in fiscals 2024 and 2025 combined. That's approximately 1,000 new stores across 48 states. It took us 18 years to open our first 1,000 stores. This plan has us opening another 1,000 stores in just four years. We couldn't be more focused, more determined, and more encouraged to do exactly that. This story isn't just about store unit growth. It's all of that and beyond. Just like I talked about Five Below Anywhere, we also recognize our growth strategy is about Five Beyond Everywhere. We see Five Beyond as a significant part of our growth strategy and an unlock to help us grow comp store sales. Our forecast of 3%-5% comps is built on the strength of our eight worlds and the addition of Five Beyond Everywhere in the coming years. We've assembled a comprehensive strategy that gets over 80% of our stores into the format we unveil today and you'll see later on by 2025. This strategy leverages our new store build-out and our ability to convert about 750 of our existing store base into this new format. As I speak to conversions, recognize these conversions take less than two weeks, and we don't close the store to execute them. Look, in the end, we're gonna go profitable sales, whether it's a new store or a comp store, whether the customer is new to the brand or has been with us for years, whether they're digitally native or brick-and-mortar centric. Five Below is poised for growth and will continue to have a relentless focus on our customer and Five Beyond Everywhere. In closing, recognize the entire enterprise, everyone in this room, everyone that's out there in the Five Below universe has the passion, has the vision, and has the expertise to triple our store base, to double our top line, and more than double our bottom line. That's our Triple- Double. Thank you. Joel? Thank you, George. Not only is George excited, the entire team's excited about our future, our future for the Triple- Double. As I said at the beginning, it's all about five drivers. Innovation, never standing still. Product, celebrating the rituals of life and the milestones of growing up. Supply chain, we're gonna control our destiny. Experience, it's about connecting, connecting with our customer, our crew, and our community. Growth, we've got Five Below Anywhere, Five Beyond Everywhere. We are accelerating. We are stronger than ever. Now we're gonna take about a 15-minute break, and when we come back at exactly 10:20 A.M., we will restart the streaming webcast. With that, we'll do guidance and a Q&A session. Before we break, we're gonna run a quick video, and then I'll see you back up here in 15 minutes. Enjoy some of that candy, get a cup of coffee. The restrooms are out that way. We'll see you all in 15 minutes. Let's run the video. Okay, welcome back, everyone. I'm here to walk you through the details of our long-term vision and algorithm and our expectations for annual performance in fiscal years 2023 through 2025 before providing some color on our fiscal 2022 guidance and color. As Joel and George, they mentioned our Triple- Double vision, so we see a huge opportunity to triple our current store count over time. By 2025, we expect to double sales to $5.6 billion and more than double EPS to $10. On a four-year CAGR basis from 2021 through 2025, this represents 18.6% growth in sales and 20% growth in EPS. Beginning in fiscal 2023, we plan to generate leverage on our sales growth and achieve an approximate 14% operating margin by 2025. As Joel mentioned earlier, our 20/20 Through 2020 algorithm called for sales growth of 20%, driven by high teens unit growth and low single-digit comparable sales growth with more than 20% growth in earnings. As you've heard so far today, we will continue to be a high growth retailer. Our 2020 vision is to grow total sales from 2023 to 2025 by 20% per year, with over 75% of that growth coming from new stores. On a three-year CAGR basis from 2022 to 2025, we expect to continue high teens unit growth. We also expect to grow comparable sales on an annual basis beginning in 2023 from 3%-5%. Now we've got multiple drivers for this expected sales growth, including increased penetration of Five Beyond, growth in our e-commerce business, new customer acquisition through increased brand awareness, customer data, and new trends, sales lifts from remodels and conversions, and selective merchandise price increases in response to inflation. New stores will continue to be the main driver of our growth. The performance and returns on our new stores have remained remarkably consistent. The pro forma model we presented at our IPO 10 years ago has grown significantly in both total sales and store profitability. Our new store model for the new Five Beyond prototype calls for a year 1 AUV of approximately $2.2 million, four-wall EBITDA margin of approximately 25% with a net cash investment to open a new store of approximately $400,000. Based on these metrics, our payback period will remain industry-leading at well under a year. I'll say that again. Our payback period will remain well under a year, and we also expect new store productivity to continue to be strong. Now on to guidance for the first quarter and the full year of fiscal 2022. As you've heard, 2022 will be a unique year for us. First, we'll be lapping significant government stimulus, including the third round of payments that began in March of last year, plus accelerated child tax credits in the back half of the year. Second, we'll still be operating in an environment with residual pandemic impacts, primarily on supply chains and store openings. Third, there are ongoing inflationary pressures, especially and most recently, fuel costs. Fourth, we'll be cycling a very strong year of multiple trends. The first quarter will be the most difficult comparison given the timing of last year's stimulus payments. We have now cycled about two weeks of these stimulus payments, and with a later Easter this year, the key holiday selling weeks are still ahead of us. Our outlook for the first quarter includes opening approximately 35 new stores, sales of $644 million-$658 million, comps of flat to -2%, diluted EPS of $0.54-$0.62, and a 25% effective tax rate. At the midpoint of this guidance, we expect operating margin to be down about 400 basis points over last year, with a little less than 1/3 of that decline in gross margin, driven primarily by fixed cost deleverage on a - 1% comp, and the remainder in SG&A expenses, driven by fixed cost deleverage, higher store wages, and increased marketing. As Joel and George noted, we plan to open between 375 and 400 new stores over the next two years. For 2022, our initial plans were to open 200 stores. However, due to industry-wide construction and permitting delays, we've had to shift certain open store openings later into the back half of 2022 and first half of 2023. As a result, we now expect to open approximately 160 stores in 2022. Also about 100-110 openings in the second half of this year, including approximately 20 openings in January. This later cadence of store openings in 2022 has a significant impact on sales for the year and unadjusted new store productivity. In addition, during the year, we expect to complete about 45 remodels and about 200 conversions to the new Five Beyond prototype. For fiscal 2022, we expect sales of $3.16 billion-$3.26 billion with comps in the flat to + 3% range. We expect the second quarter to be the easiest comparison of the year, with operating margin declines moderating from first quarter levels. We expect comps for the back half of the year to be in line with our full year guidance. We also expect operating margin of about 12.7% at the midpoint of guidance, with a decline versus last year driven primarily by higher SG&A expenses from a more normalized marketing spend. At the high end of our guidance, operating margin is assumed to be relatively flat year- on- year. With an effective tax rate of 25%, we expect diluted EPS of $5.19-$5.70. For the year, we will spend approximately $220 million in gross CapEx, excluding tenant allowances, primarily for opening new stores and executing remodels, opening a new distribution center in Indiana and investing in systems and infrastructure. For other details related to our results, please refer to our earnings press release. With that, I'll turn it back over to Joel. Joel? Thank you, Ken. As you can tell, 2022 has been a celebration of milestones. It's our 20th anniversary since we were born. It's our 10th anniversary since our IPO. Today, once again unveils another amazing growth vision. So, Five Below expects to double in the next four years. Double in the next four years. With that, I'll have Christiane join us back up on stage, and she will lead us in a Q&A session. Christiane? Sorry. I guess we're going without name badges up here. For Q&A, we have Andrea and Elsie, both with mics. I'm gonna call on you, and they will come over with the mic, and if you can please just say your name and your company and keep your question to one so that everyone in the room can ask a question. I'll start with John since he was the first person I spoke to this morning. He was here bright and early. All right. John Heinbockel with Guggenheim. Two real quick, second one. The first is, when you think about Five Beyond and expanding the TAM, right, and not just product, but also age, you know, what do you think that does in terms of an older customer, right? Keeping you relevant for a longer period of time. Secondly, you know, you didn't mention e-gaming, which still seems like a huge opportunity long term. How do you think that plays out over the three-year period? Yeah, John, great question. You know, as you think about TAM, you know, go back to what Michael talked about, you know, celebrating the rituals of life and the milestones of growing up. Quite honestly, I mean, that's how we go to market every day. Our merchants just continue to find, you know, new rituals that we can bring to market and new milestones. Ear piercing is a great example of a milestone that in today's world happens in an overwhelming majority of, you know, our customer. Look, having worked at Toys"R"Us for 12 years, what we don't wanna do, though, is go the other direction and become a infant and preschool store. We're constantly trying to, you know, how do we continue to keep this store aging up, you know, so that the younger kids aspire to go to Five Below. That's how we wake up and think about it all the time. You asked about gaming. Look, we still believe strongly in gaming. Michael went into details about Bugha. Unfortunately, the pandemic really, you know, we took a setback on being able to open local hosts. Those are starting to come back to life with live events and, you know, we'll have to now see how those do, you know. Certainly that wasn't in the program when we started it two years ago, ironically, right before the pandemic happened, and it's taken much longer to get live gaming going back, but that's what we expect to happen. It's not booked into anything planned. All right, I'll continue with this table. Chuck and then Matt. Hey, good morning. Chuck Grom from Gordon Haskett. Ken, can you talk about the puts and takes ahead for operating margins? You know, 14% is a nice uptick from the 13.3% you just reported. When you think about doubling sales over the next few years, it seems pretty conservative. Just wondering what the potential headwinds can be, particularly since it seems like the DC rollout is complete, at least for the time being. Yeah. No, good question, Chuck. You know, we started with 2022, so we gave our 2022 guidance, right, a little bit down at the high end of our guidance. Operating margin's relatively in line with last year, and then in our vision, growing to a 14% operating margin out through 2025. If you look at some of the things we're talking about, right, the drivers, we got a 3%-5% comp that we're looking at in those years, 2023 through 2025. You heard Eric talk about the development of our distribution network and the efficiencies that we're driving there. Really, how we're gonna see that happening, you're probably gonna see the leverage happening in both gross margin and down in SG&A, as we should have the ability to lever those fixed costs at the comp that we're putting out there. You know, I just add, Chuck, it's important you also look backwards. You know, we were stuck at 12% for a number of years. This last year was a big unlock, and then taking it to 14% will be another unlock. What also hasn't fundamentally changed is, as we continue to get scale benefits, especially on the gross margin side, we're gonna let Michael reinvest that in the product. We are not going to let quality sacrifice. 14's a nice expansion and, you know what, we'll see where we can go from there. Where are we going, Christiane? Matt. Oh, Matt. Matt. Great. Matt Boss, JP Morgan. Maybe Joel, your top line has proven more resilient in the past year with times of consumer stress. I guess, what do you think differentiates the model to be well-positioned in today's dynamic macro backdrop? And then, Ken, on comps, could you help bridge drivers of the 3%-5% same store sales in this plan relative to low single digits in the past plan? And maybe just I'll throw in the near term, any comments on the last couple weeks, you know, lapping up against the stimulus that gives you maybe increased confidence. Look, I think, Matt, you gotta go back to what Michael outlined in the eight worlds. I think that is really at the heart of what makes this concept so unique. You know, one of the worst things about Five Below is its name. One of the best things about Five Below is its name. Because the name, you know, a lot of people, "Is it a cold weather store? What is Five Below?" The best part about it is every time there's a new trend, it gives Michael's team the license to go after that trend. There's very few retailers that can go at that breadth of a trend, and that's what's really helped us continue to grow this business. I think, look, nobody's been through this inflation. Certainly, when it happened back in the '70s, you know, I was riding in my dad's car, sitting in a long gas line. But what has happened, and every time there's been a consumer setback is Five Below wins, right? As a consumer looks for value, that's a real opportunity for us. Yeah. Matt, on the comp drivers, we spoke about it and you heard a lot about it today. You know, go back to Michael and the presentation on Five Beyond and just the excitement around that product. We see that as a key driver of the comps and the business as we're going forward. You heard Felipe talk about what we're now gonna learn about our customer, and we've come all this way really with just transactional, and as he would call it, anonymous data. Now we're gonna have true customer behavior and be able to react to that and respond to that. We think we have the ability to not only garner new customers but also retain customers longer. You have things like e-com and the increase in the penetration of e-com. We also talked about the remodels and the conversions. A significant amount of those that we think will also help drive comps and drive the top line there. Look, we've been experimenting with remodels for quite some time. You know, with what we put up on the board there today, you can tell we're ready to accelerate, and that'll really probably be the single biggest driver with Five Beyond. Yeah. Then I think the last part of your question was around, you know, where we are now going up against that stimulus. We're about, you know, two weeks into it versus when that third payment came out. As we always do when we provide our guidance, we really look at where we are today, and we also need to look forward and see if there's any anniversaries or anomalies. This year is a little bit different. There's some shifts going on with Easter. Based on our guidance, you can see kind of how we feel about where we are so far, guiding to that flat to - 2%, up against some pretty significant payments and impact that you all remember from last year's first quarter. Look, you can all back into how January was. March is playing out pretty much, we think, the same way with landing at a, you know, relatively close to flat comp is pretty impressive given what we're up against from last year. Yeah. Over to Michael. Thanks a lot. It's Michael Lasser from UBS. Over the next few years, you're expecting your per store volumes to approach $3 million in light of probably going into less productive real estate. The 2,000 stores probably gonna go into an area that's maybe less densely populated than the 50th store, and there might be more competition. You've got Dollar General with pOpshelf. Is there a risk that you're gonna see diminishing productivity of your boxes as you grow? Hi, Michael. Great question. You know, think back to what George shared with you when we were outlining growth. What's really been surprising is just the opposite. It's why we're kinda saying, "Five Below Anywhere." We've continued to push into smaller markets. We've continued to push into more dense markets. You know, places like Flowood, Mississippi, being in our top five stores, and then George rattled off a bunch of other examples, probably gives us the confidence that just the opposite's gonna happen. Five Below is still a unique concept. You know, we are the only national kids general merchandise retailer. That's a scenario that could happen, but right now we don't really have any signs that it's gonna kinda go the direction you just outlined. I don't know. Ken, anything? No, no. I think you're dead on, Joel. Michael, I mean, we called it out too. The average unit volumes now of existing stores is $2.5 million. I mean, honestly, that's pretty impressive for what we've now achieved. We look back too. During the pandemic, we saw a lift in the business, and really we saw it across all different types of stores in all areas and all locations. Yes, there is a little bit of a dispersion in sales in that group, existing stores, between densities, populations and, you know, different factors. But we're pretty confident in that ability to be able to grow that based on what we've seen. Again, Joel called out, you know, in some of those semi-rural areas that have been really big surprises for us and the outperformance there. Then now the potential to grow in urban locations, because I think the pandemic opened up some opportunities for us there. Where are we going, Christiane? Simeon. Hi there. Simeon Gutman, Morgan Stanley. You put the slide up, the four-wall EBITDA margin on the new build is around 25%. I wanna talk about incremental return on capital and the scope for that to maybe be a little bit bigger. Granted, the focus here was on growth. I think you showed it was a $400,000 build out. Question is, the math, you know, going forward is gonna be better on comp. You're internalizing some parts of the business. You talked about transportation. I know it's not about margin, but is there scope for that to be better over time, given some of the positive things happening on the top and the margin? Yeah, I'll take that one. Yeah, you get that one. You're right, Simeon. We laid out. Again, that's our model, right? We see the stores starting off at that $2.2 million productivity and about 25% EBITDA. You mentioned distribution. That's not the number that's in the four-wall EBITDA. The amounts that are in there, remember you've got wages in there. We're gonna make sure we continue to be competitive. We get the appropriate talent out there from a wage perspective. You probably heard us talk about last year, we increased our wages towards the end of the year last year. There might be some of that that's continuing to move forward. There is an opportunity to improve that down the road. But in terms of a model, that's what we're looking at in terms of laying out. We think, you know, again, that's pretty healthy. It really, you saw the significant increase in four-wall EBITDA from when we started 10 years ago, and I think I called it out in my presentation. It's still amazing how consistent the performance is from store to store. No matter if you're looking at a store that's based in New York where your rents are higher, obviously the store productivities are higher, or a store, say, out in Flowood, Mississippi, again, a pretty tight range in terms of EBITDA margins there. That's what we expect going forward. Karen. Right here in the middle. Right to your left. Hi, Karen Short, Barclays. I just wanna clarify one thing, and then I had a bigger question. The road to 14%, is that more or less linear as we go 2023, 2024, 2025? Just to clarify, that's largely leverage on SG&A with the idea that you would continue to reinvest gross margin to continue to improve, you know, maintain product quality and improve product quality. The bigger question I had was just on the loyalty program, because that seems like a big unlock potential, so I'm wondering why not move a little faster on that. Ken, if you wanna discuss margin, and then I'll take on the loyalty. Again, we see operating margin moving to that 14% when we get to 2025. I mean, there's gonna be puts and takes as we go through the years. I guess it's relatively linear once you start in 2023 and go out to 2025. We should see, as you would guess, on a 3%-5% comp, again, the investments that we've made in the distribution facilities and the network, that we should see some leverage there. Obviously, fixed costs, there's occupancy and cost of goods sold. To Joel's point, we could very well reinvest some of that back into the product in gross margin. When you look at SG&A, it would be on the fixed cost components of SG&A where we see that leverage. It is relatively linear. Yeah, yeah. Hey, look, on the loyalty program, I know it's a topic that's come up for many years here, and I'll take accountability for that one. I think, you know, it'd be really easy, quite honestly, Karen, to speed that up. Felipe talked about it in detail. Hopefully you caught some of what he said. The other side of it, though, and I hope you all will observe when you get to the store later today, where we've chosen to go is on the prototype, right? I'm completely committed to improving the experience in our store, and we just haven't run out of ideas. We just keep getting better and better at developing an amazing experience. I think, honestly, there's a lot of retailers that launch a loyalty program for the sake of trying to save their business model. We're in a fortunate spot that we don't have to play defense. We can play offense. Now, having said that, you know, we don't have blinders on. Felipe and our entire IT organization, you know, is working on getting to know our customer better. Adding tokenization in, we need a year to kinda have that all caught up, is a key driver to it. We didn't have color, style, size before. That's a key driver to it. There's a lot of foundational things that, honestly, we're just doing it the right way so that when we do it's just not a program, but it's something that really the customer gets excited about. Right now, the energy and effort, you know, especially after two years of the pandemic and a lot of other distractions, has been into the store experience. Look, we put it on the slide. We usually pretty much deliver what we say we're gonna do. That's what Five Below is great at, and we'll have her done by 2025. Scot. Thank you. Scot Ciccarelli, Truist Securities. For your 3%-5% comp expectation, can you help us understand how much of a driver the Five Beyond program is supposed to be to that? 'Cause you did mention that's one of the keys, number one. Number two, when you think about whether it's, you know, 2025, 2030, how much do you expect the $5+ price point to be as a percent of sales when we kinda think about that algorithm? You know, I'll take the second half of that and Ken can unpack the same store sales side of it. What hasn't changed and what we've learned from a lot of customer intercepts is there's still a lot of value in Five Below. The customer really doesn't want us to lose Five Below, and we're not planning to. As we've created Five Beyond, you know, one of the impacts of it is how do you keep it separate and segregated? What you're gonna see today is really the direction we're heading with Five Beyond. What you're gonna see is a lot of room and a lot of tech. We've broken the $5 price point. That is all contained inside of Five Beyond. It truly, as Michael said, we have migrated from items on a shelf to a store within a store concept. Our goal, Scot, is to continue to keep it that way, that when somebody walks into the front half of that store, it's still overwhelming. You know, I'm talking 90%+ feels like it's Five Below. That's the commitment Michael has. It's the commitment the merchants have. It's the commitment he gets from Ken and the finance team. You, you'll see it today firsthand. We are keeping it pretty much contained back there. If anything, we'll just continue to grow the size of our prototype so that that part stays part and parcel and true to Five Beyond, and the front stays true to Five Below. Scot, your other question around the comp drivers and Five Beyond. Five Beyond's probably gonna play a pretty big role in that. We went through a lot of the factors behind that. You know, both through a combination of remodels and conversions. I mean, you heard us talk about the number of remodels that we're gonna do this year and then conversions, right? You know, 200 conversions that we're gonna do. We'll talk about that, too, a little bit later, and then just the impact of Five Beyond for the new stores, and then when they start to turn comp and the ability to drive that. I would put that as probably one of the largest drivers out there for us. Again, we're still gonna be looking to increase customer acquisition and retention, which should help to drive traffic also on an overall basis. Ed. Hi. Ed Kelly, Wells Fargo. I was curious. You know, Michael has brought a lot of energy and, you know, success on the merchandising side since he's, you know, come to Five Below. I'm curious as to, you know, what his thoughts are on the opportunity that's still ahead in that perspective. How excited are you today versus what you were when you got there? As part of that, how are you thinking about, you know, lapping some of the trends, like Squish trends for instance, you know, as we think about the remainder of this year? Yeah. Look, I mean, one of the advantages of Investor Day is we're all here. Michael, you wanna talk about some of that passion? Yeah, I think it's great. Thank you very much. Hopefully you still recognize the passion. I love that part. You know, listen, I will say this. We have still an unbelievable runway, and I'm also fortunate that I have two great senior vice presidents and GMMs that share that passion. You're gonna get a chance to meet them on the store tour. I said this when I came into the company, you know, over seven years ago. We have so much runway at one to five, and we're gonna continue to do it. What Five Beyond, I mean, look at that picture back there. What Five Beyond does, it creates that white space that we're gonna go out and capture. We're gonna capture that, continue to be relevant, use the flexibility we have within our worlds, and then we solve the one-to-five business. As it relates to the trends, you know, I remember when there was this trend called Frozen happen, and we're like, "Oh, just let go." We actually went out, and we actually killed it. Then a spinner came, and we're like, "How do we do the spinner?" Well, we did it again. What we continue to do is recognize them, we find them, and we'll distort them. I say that constantly, and it's not just us saying it. It's proof that we actually know what our customer is looking for, and we listen to them. Again, the great merchant team that we have really is a young, strong group that goes after and utilizes it. You'll see that, see us continue to do it. As I say to the team, it's our JOBs, and we're gonna continue to go out there and find it. When you see the store today, remember, it's an experience. That's really what we continue to do. Ed, I'll tell you, Michael's starting to see some other trends emerge, but like always, we kinda keep those under our hat until they take off for obvious reasons. I think what you'll see in the store today will give you a pretty good sense that he hasn't run out of ideas. We're gonna continue to develop on the rituals of life and milestones of growing up. Thanks, Michael. Great. Joe. Where are we going, Christiane? Joe. Oh, Joe. Yeah. Thanks. Joe Feldman, Telsey Advisory Group. Actually this might be more for Michael, but what are you guys displacing, and I guess we'll see it in the store, but with all the new merchandising things, like you talked about ear piercings and balloons and, you know, even the pet category. Like, that takes space, so what, how are you repositioning the store and rethinking other categories within it? Yes, that's a great question. I was mentioning it to someone earlier. I think I was talking to Matt about it. We've actually been really strong with our efficiency, and Idalia and Todd will call out certain areas where we've actually made the store much more efficient. We've done some great things with new fixturing. You'll see we actually haven't displaced classifications. It actually has allowed us to be smarter, become more efficient with the box, and then go after and distort those other classifications, like in pet, like in the ear piercing or like you'll see with balloons. When Joel talked about keeping the Five Beyond area confined, we have higher walls, and those wing walls have allowed us higher efficiency with linear footage. Let me be really clear. You're gonna see in that store everything that you'd see in an existing store, except for the expanded Five Beyond, balloon and the ear piercing. I would, Michael, just add, you know, like, if you think about tech, you know, as a specific example, you know, our iPhone chargers used to be this big. While Michael's team shrunk it, you'll also now see wireless in there. The customer changed. It's not that those cables aren't still important to us. It's just we don't need as much space, and the customer has shifted. We're also gonna do a little Q&A after the tour, so if you don't see some really good examples of that during the tour, ask the question again. Good call. Thanks, Michael. Yep. Plus the packaging got smaller. Packaging got smaller. Yeah, that's helped a lot. It's true. All right. Brad. Thanks. Brad Thomas, KeyBanc Capital Markets. Wanted to follow up on the remodeling plans and hoping you can give us an update on where the Vintage stores track in terms of sales per store versus the Fresh versus the Beyond. Then there's been a trend of the stores getting bigger as you've done these new formats. Dovetailing off of Joe's question, with all these interesting merchandising initiatives that you have, do we think the stores should get bigger than they are today? Thanks. Look, I think, and Ken, you can add any of the details, but look, we will probably continue to evolve the size of the prototype. The difference is we're not moving on the size of the prototype until we have ideas to put in it. What it does is it provides for a nice constant evolution. Certainly, some of those original Vintage stores, you know, we will have to move to a bigger box, or we'll remodel them to a smaller prototype. We have a lot of options there. You know, the classic, which was our original store, 4,000 sq ft, we only have 8 left? 7 left? Yeah, less than 10. Yeah. As the Vintage comes up on its ten-year initial real estate lease, we have the option to either, you know, take some bigger space, keep them in that and remodel it. I think what you're gonna see today is relatively in line with the size of the box and where we're heading. Yeah. I think you also asked about the kind of productivities of the types of stores. You know, it's interesting because you know, those older stores, they've been around for longer, so they've been comping. It's one of the groups that actually the reopening from the pandemic benefited pretty significantly. You don't really see a huge dispersion around the performance of stores, you know, based on the type. It's some more of some other factors that are impacting it. Again, I think Michael mentioned it too, the lift that we would expect when we remodel a store and go to a Five Beyond is that 500 basis point lift. We feel good about that. Then you have the conversions also just to go from a Five Beyond to this new Five Beyond prototype. Andrea, your table. Scott Mushkin from R5 Capital. We've done a lot of modeling on the potential downside to Five Below of some of this, you know, the Ukraine war and stimulus really starts to hurt you guys. 'Cause we have a hockey stick here. Obviously, we look at 2025. When you look at your downside modeling, you know, how do you think of the business in a very aggressively negative, we're in a recession environment, how do you think it will perform? Well, as it relates to the stimulus, the overwhelming majority of that piece is almost behind us. You know, January is already behind us. We're in the middle of the March, April one. When you get to the child tax credit in the back half of the year, that is this big compared to what we're going through now. You can tell by what Ken outlined, the difference in our first quarter comp to our, you know, ultimate comp for the year shows you that, we've got pretty good data now on getting through that, and we really have the overwhelming big piece behind us. It relates to, you know, some of the downsides you're talking about inflation, war, et cetera, you know, like I said earlier, while we don't have an exact replica of this, inflation like this was long before Five Below was born. Every time there's been some sort of consumer setback, take 2008 as an example, Five Below has been a winner in that. I see no reason why that wouldn't be the case this time as well, as a customer seeks value. The last thing I would tell you know, 12 years of Toys"R"Us, the last place parents cut back is on their kids. They're gonna do everything they can to make sure their kids have a great experience around a birthday, around Christmas, around Hanukkah, whatever those rituals in life that they're going through. I'm not near as pessimistic as your model might outline. Yeah. Scott, as you can hear from Joel, we tend to be a little more positive in terms of our approach and our outlook. We do the downside. We look at the downside. When we look at it, again, we think we have huge opportunities from a top-line perspective. I mean, you heard it today in terms of the product and the experience in the store. Inflation that we've all talked about, right? We've been talking about this for the last year last year when they said it was gonna be transitory, and it's still here with us. You also heard the things that we can do to be able to offset those input costs. You know, the efficiencies that we're driving. Again, you heard about our distribution network and being, you know, the ability to lever that now. You know, some of the things we're doing with our own fleet, the scale of the business, is a huge benefit for us throughout the entire organization, whether it's talent, whether it's vendor relationships, whatever it is to really help drive down those costs. Again, we feel pretty good about what we're kinda laying out and the levers that we have to pull to be able to offset any of those downsides. You know, the other intangible is people, Ken. People, yeah. You know, we laughed earlier. I'll take this one. Ken and I have been doing this so long together, we just kinda finish each other's sentences. But that team over there has been with us too. We all kinda know how each other work, and it really takes a lot of the unknowns out of the equation as, you know, we kinda move from year to year, quarter to quarter. Yeah. That's a good call. Christiane? I'll go over to you. David Shepley, Windancer Holdings. I was hoping you could share some more detail on your customer demographic by age. One of the things I'm always fascinated by when I shop the store is how wide it is. You clearly have your core teen, tween customer, and I do my best with my girls to get them there. But I'm just curious if you have any breadth of metrics that you could share, in the millennial demographic or mom, grandparent, things of that nature. Yeah. I mean, look, we always say the store was created for teens and tweens, but it also finished with a universal appeal for all. That's the other unique aspect of this brand is that as our awareness continues to grow, more and more non-teens and tweens continue to discover us. The only area I'm really dogmatic about is we're not gonna allow it to go downward, infants and preschool. John, you asked earlier, if anything, we're expanding it for older age groups. Squishmallows is a great example of this trend. Boy, the people you see in line on our Sunday Squish, it's big with college-age girls. We're seeing lots of teens in there, and quite honestly, it's attracting a collector group as well that's about the age of everybody in this room. I know I'm not giving you the specifics. We can get those for you. What you're really hearing from me is, you know, on the household income side, you know, we've got a big segment under $50,000, but shockingly, what are we? About a quarter over $100,000? Yeah. Yeah. Over 100. Yeah. It's about 1/3 under $50,000 and a quarter over $100,000. Over 100. Over 100. Over 100. You know, we could go through every single one of them, and it's pretty amazing how wide it continues to get, and I think, as Michael and the team, you know, we stay focused on staying older. That's only gonna bode well for us. Paul. Thanks. Paul Lejuez, Citi. Two questions. One, just curious how you're thinking about rent. You know, are you seeing better deals as you're expanding the stores at the pace that you're opening? You know, how do you think about rent as a percent of sales over time? Is that a lever in the model? Do you get any leverage on that? Then second, just curious how you're thinking about e-com as you think about that long-term, you know, big sales number that you put out there. What role does e-com play as a percent of sales or just how it can kind of you know, become an omni-channel initiative for you even more than it is today, if that's the way you're thinking. Let me start with the second half of that, and Ken can give you specifics on rent. You know, I was having this conversation at break with a couple of you. You know, e-com we think of as icing on the cake, not the cake. What I mean by that is our core customer is teens and tweens. They start with that phone. That is their life. That is where everything begins and ends. Having said that, you know, you're not seeing us do free shipping. You're not seeing us trying to juice the business for the sake of juicing the business. Same philosophy with loyalty. We need to have a digital experience with our customer. What Felipe and team are working on is not only e-commerce. We gotta get, h ey, look, we gotta be really good at that, right? You gotta be able to order from us and get what you ordered and get it in a timely basis. Now you're gonna have to pay for shipping for that. At the same time, you know, Felipe also outlined many initiatives are coming forward this year that truly creates an omni environment. We have not had BOPIS. We had to get color, style, size done so that we could, you know, really deliver on that. So that's coming later this year. So we're implementing many of the core tenets of omni channel, but it's a part of a bigger belief that it's more about a digital experience. It's about brand awareness. It's about having a connection with the customer, not only e-commerce, but, you know, having some fun with the brand. I think you're gonna see us continue to get better with that experience online. Don't just think e-commerce, but just think about the experience as it is as good in the stores from that perspective. Ken? Yeah. Paul, on rents, we've got a phenomenal real estate team. They've been doing this for a long time. That team is growing. You can see by the results that we've talked about in terms of especially the year-one economics and how consistent they've been. From a specific rent perspective, those guys are, you know, the team's cutting deals all the time. I don't think we've seen anything dramatic in terms of the shifts in rents recently. The one call out I'll have, and it was really pandemic-related, was the opportunities in the urban locations. You know, to really kind of open up for us. We are gonna open a good amount of urban locations this year, and the majority of those are gonna be in New York City. That it wasn't too long ago that, you know, New York City was too far removed for us to really work from an economic standpoint, and those reductions in rents have really opened it up. Then I think you talked about kind of going forward as we grow with that 3%-5% comp. That's one of the things that I called out, I think, for Karen's question, too, in the levers that we would be able to and should be able to leverage on occupancy costs as we move forward. When you talk New York City, are you talking Manhattan or the boroughs? The boroughs, yeah. And Manhattan. It does include Manhattan, yeah. Yeah. George, where'd we just open? Union Square. Yeah, we just opened in Union Square a few weeks ago, and you're gonna see us open in Times Square this year. Times Square. There's been some great opportunities there. It's actually rent going the other way. Joel, you mentioned style, color, size. I don't think we've talked about that with this group. Do you wanna try to explain it? Yeah. Look, a lot of our product in the past came as assortments. That works fine for a in-store customer. They come in, and they can choose pink or black or white. For an online customer, we had to really break it down, so that if you ordered pink, we didn't send you white. If you ordered black, we didn't send you pink. Over the last year, you know, combination of several teams, planning and allocations, IT, the merchandising group really broke down everything so that it doesn't come as an assortment, but as somebody now orders online. Quite honestly, it helps us just have better visibility into our sell-throughs and will only make us stronger both in our stores and online. Back to the room. Blair Bodek, Pacifica Capital Investments. I wonder, as you enter this next stage of growth, if you can talk about if your thinking on returning capital to shareholders has changed at all. Yeah. I think one of the biggest changes for us going forward, and as you've seen, you know, the significant investment that we've made over the past few years, not just in the distribution network but also in things like systems and IT. I mean, we've made some pretty large upgrades over the last few years. That's going to continue as we move forward. You know, we always talk about the foundation that we have to build to keep this successful growth going, you know. That's a combination of people, that's systems and infrastructure. We do see an improvement in that return on invested capital as we move forward. Then in terms of allocating the capital, as you know, obviously, with the returns that we see on new stores, that's our best investment at this stage, is to continue to do that. We'll continue to invest in the foundation of the business to be able to grow it. You also heard us, and we've talked about it before, in terms of stock buybacks and repurchases, that we'll look at that opportunistically, and we called out today that we actually took advantage of that, in January. I think that's kind of some of the drivers and the combination of that as we're going forward. Kate. In the back. Hi. Thanks. Kate McShane, Goldman Sachs. I just wanted to ask a question about the supply chain. I know you mentioned the opportunity for adding a million more square feet to your existing DC network. Just could you maybe talk to us about the cadence over the next few years, about how you plan that? What about any kind of future DC growth? Just one question around the truck fleet. Is there a goal in mind in terms of how much of that you'd like to own? Yeah. I think the theme in all that is, as you just said, control. It's controlling our destiny. All the recent distribution centers we've built, we own the land, we built the building. The expansion opportunities in those collective DCs adds up to about 1 million sq ft. If we do nothing, the current network gets us easily to 2,000 stores. We have the option then to, you know, add that square footage. That then takes you up to the 2,500. Kate, I think ultimately, as real estate finds more and more opportunities, that'll drive where we go next on whether it's expanding the current network or, you know, building something like up in the Pacific Northwest or a second facility in the Northeast, as those are probably the next two opportunities. For the most part, you know, there's a pretty. You're gonna see a couple-year pause now on the need to build any distribution centers. You know, it'll have some impact on operating income, but not near like the old days when we used to run, what, 60-80 pips of drag. Yeah. We shouldn't really see any material impact to bringing on that incremental square footage in the distribution network. I think she had another question on the truck fleet. Look, no goal. I think it's something we called out that started last year as just a really good example of controlling our destiny. It has a very nice payback for us. Rich and the team are really evaluating how far we can take that into our network, but all the signs so far have been very positive. Consider it a pilot at this point in time. We also put it up there, as you understand, the culture of innovation happens not only in our stores but in every department throughout the organization. Go ahead. Hi, good morning. Thanks for taking my questions. Corey Tarlowe with Jefferies. First, just broadly, could you talk about the health of your core customer, perhaps by income level? Secondarily, you mentioned that you're increasing your direct import penetration to 50%, I believe. One, where is that today? Two, what countries do you expect to be of greater emphasis going forward? Thank you. Yeah. The 50% is where it will be this year, so that's specifically talking current 2022. Look, China's still the overwhelming majority of where the imports come from, although we have reduced that reliance for a number of years now as we continue to move into, you know, other countries like India and Vietnam. Andy, our Senior Vice President of Product Development is here and another great person to meet as he's joined us recently. We'll continue to explore other countries. The supply chain is truly becoming global. As far as the core customer goes, look, it's really hard to decipher exactly what's happening with the core customer as we're right in the middle of, you know, lapping the stimulus from last year. It's playing out very similar to what we thought it would be once we saw the January results. We haven't seen anything on top of that. I think it's a great question. We need a little more time to kinda get through the end of that and see if there's any lingering impacts, but it's all accounted for in the guidance Ken outlined for you. To that end, I mean, the lower-end customer is the one that's probably gonna be the most stressed, right? From an inflationary standpoint. Again, as you heard from Joel, and we've seen in the past, that's where we do well, and the customer comes back to us 'cause that's where the value really steps up. You've heard it from everybody here today, especially Michael, in terms of the product. We think we're really well-positioned, you know, to be able to support that customer during difficult times. All right. Has every table had a chance to ask a question? All right, so we'll go to the online. Are there any questions online that we'd like to ask? Yeah, there are a few. Jeremy Hamblin from Craig-Hallum. He says the guidance for FY 2022 is much wider than typical. Can you discuss the factors for why there's that much uncertainty contributing to that wider guide? Sure. I mean, I think we've talked about a little bit today, you know, we're talking about lapping stimulus, and we're talking about inflationary times moving forward. You know, we are gonna be up against some pretty significant trends out there that we had last year. So really I think what you're looking at is there is a little bit more of an uncertainty and just a little bit wider range than we normally do to be able to cover that. But again, we feel confident in terms of what we've seen so far this year. One of the biggest anniversaries and challenges is going up against the stimulus. So based on what we've seen so far, you see how that's translated into our guide for the first quarter. Look, I think it's also, Ken, why so many retailers and companies for that matter the last two years haven't given guidance. Right. You know, I think while we could have gone down that route, as we sit here unveiling for you all a long-term Triple- Double vision, we needed to help you understand where we're going with some specifics. Our guide gives you a range of potential outcomes. Outcomes, yeah. But, you know, Michael, go back to your pessimism. I'll tell you what, given that we're almost now through, you know, or halfway through the stimulus from last year, I think, you know, you tell me how the war is gonna play out, how inflation's gonna play out. We think long term, though, we'll end up a winner in that as, customers turn to value. There's one from Anthony Chukumba at Loop. Of the incremental new store potential you outlined, about 1,000 incremental stores, can you talk about the mix of those stores, whether it's new market versus existing market? Just drill down. Yeah, real quick. I mean, the overwhelming majority will be in the existing markets. It's one of the very reasons George highlighted Philadelphia as an example, where we're gonna densify that from 60 to 120 stores. Very few new markets. Quite honestly, that's been the case for the last several years. Really no change in strategy. All right. All right. Any last question before we wrap it up? Okay, great. Well, thanks for all the questions, and I'm happy to answer them in the coming weeks, as is Ken. We look forward to continuing the dialogue.