Cool. Thanks, everybody. Paul Lejuez here from Citigroup. With me, I've got the management team of Five Below, CEO, Joel Anderson, CFO, Ken Bull. We're gonna try to be very efficient and get through a lot of questions that I'm sure you guys are all wondering. We'll start with holiday, guys. Obviously, it's the news of the day. Maybe talk about what you saw during the holiday period. Talk about the peaks and valleys that you might have seen, what worked and what didn't, and if there are any surprises, positive or negative. Yeah, let me kick it off, and Ken, add anything into it. Yeah. I think the big news of it, Paul Lejuez, honestly, is your last statement. There were no surprises for the most part. It was. You know, as we sat there at the beginning of December on our third quarter call, you know, we came through November. It was fine. We liked Black Friday. We didn't see the lull in the middle of December, which we've seen, you know, several years. Honestly, the only surprise on it was probably Mother Nature. That storm at the end certainly hit pretty hard. It went all the way from Mexico to Canada and came across. Certainly saw some disruptions from that. Other than that, it was a very good holiday. Trends were strong. Squishmallows, Slime Lickers, Hello Kitty. I think that's something that, you know, I've been here eight years now. We've really got a good cadence with those, how to get into them, how to get out of them. It was a really no surprise holiday for us other than if I could have taken away those two winter storm events at, right at the end there. Ken, anything? I think you covered it, pretty much as planned until we hit those weather events, you know, earlier to Christmas. If you go back to how we spoke about what our expectations in the fourth quarter around product and Five Beyond and marketing and the much improved marketing, what that did for us, our inventory position's much better than last year. All those things really played out for us, even down to operations. You know, we continue to see the assisted self-checkouts in our stores. We have about 70% of our stores have that now. Really does a good job in terms of controlling the lines and creating an efficiency for customers, especially during those last couple of weeks of the season. Yeah, look, those of you that have followed us for a long time know lines have always been a problem in our stores. The assisted self-checkout has really helped us now that, in fact, in our stores that don't have it, that's probably an opportunity for us. To see the lines, yeah. to keep fixing. Yeah. Is there anything you would've changed if you go back to the beginning of the season? Anything that they would've done different? Well, if I went back to the beginning of the year, I probably would've guided the year a lot different for all of you. You know, in all seriousness, I think as we guided on 2022 and we thought about, you know, how do you come around the horn on all these stimulus payments, inflation, Child Tax Credit, that's something we hadn't been through before. Trying to get that right was certainly proved out to be more challenging, especially the first half of the year, Q1 and Q2. As the year went on, you know, the business has improved. We've gotten more of those headwinds behind us, and in fact, the 90% of them are, you know, behind us now. I think the story now is about looking forward and talking about 2023 and our long-term vision and everything we laid out for everybody at the March Investor Day that kinda got disrupted with, you know, some huge inflation, gas prices, war in Ukraine, et cetera, et cetera. Those are all kinda built into it now, and we move forward and get back to stuff we can control. Yeah, we'll get to 2023- Yeah. in a second. Yep. Maybe just sticking on holiday for a second. Yeah. Five Beyond, obviously big initiative for you guys. How did that product perform during the holiday? Did you see any, you know, lift that you can talk about in those stores? Just maybe give us an update on what you saw, and anything that maybe you learned from the holiday season that influences how you think about that section of the store for 2023? What I'd share with you on Five Beyond now is, we're very pleased with what we saw. Give us a little time. I mean, the 10 weeks just ended Saturday, we know the what, and we know the facts. We shared the facts. We gotta really do all the math, and we gotta really do the analysis to understand what was the lift in Five Beyond versus the rest of the chain, 'cause you gotta tease out win, weather and all those kinds of things. Obviously, with our press release this morning, we said we're gonna open 400. I would tell you what the teams did great in 2022 was execution. We went from a state in March of 2022 with one store, and we're sitting here today with 250-ish. It was a, you know, we moved really quickly from strategy to execution, and the teams performed. The concept feels really good. We saw lifts in it. What I would tell you, like we've said in years past, we see roughly twice the spend of a customer that puts Five Beyond in their basket. That basket's about twice the size of a non-Five Beyond basket. All the feedback's been very positive, and we're gonna push forward with it. I don't know. Ken, anything else on Five Beyond? Yeah, I think you hit it. Again, more to come as we get onto the Q4 call and the March call. We'll dig in a little bit more. We were really pleased with the results of Five Beyond and seeing, to Joel's point, the consistent performance in terms of those lifts that we've been seeing historically. And it was also good to see the increased penetration out there. Whether it was the product itself, we had more SKUs out there, or the increase in the penetration of the Five Beyond format stores. The customers really responded well to that. Yeah, I would just add, you know, especially for any of you that aren't following us closely, you know, the original launch of Five Beyond was really items on a shelf. Now we're migrating to a store within a store concept. To Ken's point, we're seeing about twice the penetration of our stores that just kinda have Five Below items on the shelf to now the prototype that includes Five Below as a concept store. Yeah. Got it. You know, I think one of the things that investors have been pretty impressed with, especially for the holiday season, is that you're going up against some very difficult trends, very difficult comparisons against some very strong trends. You know, maybe talk about how you're able to comp some of those hot trends and, you know, maybe offset some of the fading trends, you know, just in terms of an innovation perspective. Yeah. Hopefully by now, you know, with, you know, 10 years as a public company, many, many years sitting up in front of here in quarterly calls, it seems like we're always talking about trends. I think it all goes back to 2017 with that spinner year, and nobody believed we could come around the horn on that spinner year and comp positive, which did happen in 2018. From the beginnings of those times to now, it's kinda part of the secret sauce of Five Below. It's, it's kind of in our DNA, and it's not only about getting into a trend, but also knowing how to land the plane and get out of it. You're not gonna walk into our stores today and see heavy leftovers of past years' trend products. I mean, last year, the poppers was gigantic. And y ou'd be hard-pressed to even find a popper in our store today. Right. It's as much about getting into it as it is getting out of it. We're pretty nimble and quick. There's not a lot of bureaucracy at Five Below. When we identify something, we move really quick to get that in the store, test it, and then push it out to the stores. Squish has been a great one that's actually that's gone on for a couple years now. Slime Lickers emerged really strong this year. Hello Kitty. We're starting to see some licenses appear for the first time. It's nice to see movies starting to come back. That usually then leads to licenses. Now it's just kind of part of the cadence. You get into some, you get out. You get in, you get out. It's gonna hover probably in that low to mid-single-digit or sorry, mid to high single digits penetration of our business. We feel really good about it, and we're in great inventory shape as we move forward. Anything else? No, again, I think you nailed it. The other thing with the trends too is again, Joel mentioned we love trends. That's what we're all about. It's really kinda the mindset that we have around those. We deal with this all the time. The two keys is they do help drive traffic, and they also bring in new customers. We continue to see that, and that's really powerful for the growth of the brand as we continue to do that. As some fall off, although Squish has been out there for a few years, we saw the introduction of new ones come on, and that happens every year. You're gonna see that continuing. Great. Let's move over to 2023. Okay. We saw in your press release, I think you said 200+. Maybe just talk about the new openings next year, the cadence of the new openings. Also, on your last call, I think you alluded to planning the business around a positive comp. You know, any update to your thoughts there? You know, I'm sure everyone's gonna wanna hear about EBIT margin expansion opportunity, gross margin versus SG&A. Put some polls. Maybe talk about those things as you think about 2023. Well, let me set the stage, and I'll let Ken cover kinda comp and margin, how to think about that a little bit. You know, coming out of the pandemic, getting the engine restarted on new stores, you know, proved to be tougher than we thought. It was important that we include that in the press release. You know, although we'll give you all the details as we, you know, get to the March meeting. You know, as you're all setting your models, we now feel like the majority of those headwinds related to new stores is largely behind us. We still have line of sight now to about 200 stores, 200 +. I don't wanna say about. It's gonna be over 200. The cadence is a little off, right? It's gonna be more one-third, two-thirds, first half of the year to second half of the year, as we continue to get the pipeline filled back up. We feel really good about 200 stores. The other piece of it is the 400 plus conversions. We're really moving fast now to convert our fleet from the old prototype into the Five Below store within a store prototype. 250 this year, 400 next year, and we'll continue that path into 2024 and 2025. Over the next few years, really the entire fleet'll be transformed into the new prototype. You know, Ken. Yeah. Obviously, that's the key driver, Paul, is the store growth and the unit growth. I mean, we put that out in the investor day with the Triple-Double. That's the, you know, it's probably 75% of our longer term growth is coming from unit growth, but you also mentioned the comps too. When we spoke a little bit about that in terms of what that those numbers would be. We talked about a 3%-5% comp. We're talking about positive comps next year, and we'll give more color on the March call in Q4. From a cadence of those, I mean, as you can tell, you know, we have easier compares in the first half of the year, but again, more to come on the comps. In terms of the operating margins, you mentioned gross margin and SG&A. One of the things we did on our Q3 call to give an indication of where we're gonna be for 2023 was it wasn't guidance, but it was a scenario that we gave out there that if we were to achieve a 3% comp, given what we know today, we would see slight leverage over the midpoint of the guidance for this year. When I say slight, it's, you know, 10-20 basis points. We're up against a few challenges next year. We've got lower incentive compensation this year that we're gonna anniversary next year. We spoke a lot at this year about the cost management strategies, how we reacted to the reduction in the number of stores and the reduction in sales that took place earlier in the year. I think the teams did a great job coming together with that discipline to reduce costs. We're gonna be up against some of that also next year. When you look at our scale and growth and other things that are gonna happen inside the business, like I said, we do expect slight operating margin leverage over where we'll land this year. Yeah. What's the macro assumption that you use as you formulate your view for 2023 and how you expect the business to perform? What are you thinking about the macro and just the competitive landscape? Rational, more rational, less rational? I'll jump in after you. Yeah, let me start. Yeah. Look, I definitely think it's gonna be more rational. At the same time, I mean, there's still macro, you know, issues out there that have to get solved. You know, inflation's not going away overnight. On the flip side, we've seen gas prices start to come down. You know, I think a lot of it's gonna come down to where does unemployment land? The nice thing is, you know, assuming there is a recession, we're going into it with full employment. That'll play a nice factor into, you know, mitigating it from being a major recession or anything like that. Forget that. Let's take it back to Five Below. For us, I think regardless of whether it's a hard recession or a soft recession, easy landing or not, value is gonna play out. We saw that play out in fourth quarter. Our, our consumables, you know, candy, snack, HBA, travel, things that are needs-based for us, outperform non-needs-based. There's no reason that doesn't continue into 2023 as well. Value's more important than ever. I think retailers that improve their business model during the recession, or sorry, during the pandemic, when there was a lot of money out there, are gonna do very well. For us, that, you know, was a new, whole new concept. We're, we're in the process of rolling that out. We sit here with a nice balance sheet, we're not hamstrung on, you know, increasing rates or anything like that. For us, we're set up really nicely to really accentuate value, drive the customer into our store, and they're certainly gonna appreciate it more so than ever. Ken? Yeah. I think two other concepts to add to what Joel mentioned. You know, coming out of the pandemic, and we saw that, right? We saw resilience from the team, flexibility, innovation, creativity. All those things combined with our model, right? The eight worlds, give us the ability to really flex wherever that customer may go. I mean, Joel mentioned already what we've seen over the last year or so, and it continued through the holiday season, was the strength in kind of the needs categories, right? Candy, food, beverage, travel, beauty areas like that the model has the ability to flex, right? With those eight worlds, and we can really go wherever the customer goes. That's another piece that's pretty powerful for us, no matter what happens from a macro perspective or with the economy. Great. I think one of the things that most investors appreciate about the story or, you know, one of the reasons they admire Five Below as a stock is that runway of growth that you have, right? In terms of the number of stores. Maybe just take us back to what you're thinking in terms of that long-term store potential and what gives you the confidence to get there. Maybe, you know, along the same lines, maybe talk about some of the places that you are most deeply penetrated, you know, and how you're performing in some of those markets and how does that tie in to that long-term, you know, ultimate store growth opportunity. Well, big picture, it looks like this, then Ken, maybe you give an example with, say, Philly or something. Yeah. You know, when we went public, we saw about 2,000 stores. You know, somewhere, you know, mid-teens, 2016 or so, we started, you know, looking at it again, and we really wanted to wait till we got into California, 'cause if you, if you can't operate in California, it's gonna bring your numbers down. I believe it was the January 18 ICR, we updated that number to 2,500. The confidence at that point was, hey, look, we've gone to the West Coast now, we've moved national, worked in Texas, certainly works on the East Coast, and we took it up to 2,500. Most recently, as we've penetrated, probably more successfully than we thought into both urban and rural, 'cause we've always kind of been suburban-oriented, that gave us the confidence that when the numbers came back, that it was 3,500 +, that we could certainly share that publicly with you. I think to really prove that out, you gotta then take it down to the DMA level, and I don't know maybe. Yeah. kinda think about how we think about, like, Philly. Use Philly as an example, right? That's our hometown. That's where we started. If you go back to when we were public, I think we took a step back in some of those studies, and they showed that we could open up 60 stores in the Philly DMA. With the history that we have, much more store openings, we've been densifying there, so we get an understanding of the cannibalization and the impact there that we do see when we densify in these markets, but what we end up getting, obviously, is a much larger market share. The other interesting thing we see is when we anniversary those stores that are impacted by cannibalization, they start to get right back to comping again, right? That's not a long-term decline in business. It's really just for that anniversary period. We put all that together with the additional data we had, along with increased productivities, and now we think we can put 120 stores in the Philadelphia DMA. Doubling that. That's pretty dramatic. And that's kind of where you're seeing that evolution from 2,000 stores to now greater than 3,500. The other piece that gives us a lot of confidence is when you look in some of these outlier markets. We call it out on all the quarterly calls, and we just did one on the third quarter call. We opened up, we just opened up the Dakotas, so North Dakota and South Dakota. A store in each one of those states that we opened hit the top 25 fall all-time grand openings, which is actually a good indicator of that store's productivity. They didn't notice at all out there in the Dakotas, right? There wasn't much going on there for in terms of awareness for us. When we continue to see that in outlier areas like that, and then you also include the productivities and the success in the urban locations. We've got a lot of stores in the boroughs now in New York City that years ago. Mm-hmm. I didn't think we were ever gonna have that many. Those are also successful. When you put all that together, that really supports us saying, "Hey, you know, this can easily go over 3,500 stores. Yeah. Got it. What does the store look like five years from now in terms of the assortment? You know, what% of the store do you think would be above, you know, above that $5 price point, above $20 for, you know, how high do you go? Paul, I think what's most exciting about Five Below in answering that question is the entire fleet's gonna change in 3- 3.5 years. It's very rare you see in retail where in such a short period of time you're able to transform the entire fleet. I really encourage all of you to, you know, get into Five Beyond so you understand where we're heading. It's not just about new stores opening this way, it's about taking the existing fleet and converting it to the new prototype. What's the same though is value. Whether you're in Five Below or Five Beyond, it's all about value, and it's all about the store experience. Fun music, fun fixtures, great product, treasure hunt. That's the same in Five Beyond as it is in Five Below, and that has to continue or we've lost our way. That's true to who we are and the fact that the whole concept's gonna transform itself in such a short period of time. I can tell you the store manager's excited about getting the new store. Customers are excited when we change the store. We see an immediate lift the week after we change it. It's a really good time for us. We got the headwinds of largely of some of the macro stimulus Child Tax Credit behind us. And I think the headwinds in front of us from a macro actually work really to our advantage 'cause it's all about value. Great. maybe talk about priorities for cash, you know, as you think about 2023 and beyond. maybe talk CapEx next year. Yeah. ... places that, you know, maybe you wish you spent more money. That's his job. ... sooner, right. Right? Maybe where you're playing catch-up. Well, as you know, our philosophy has always been to maintain an ample amount of liquidity for our business because of the high growth, right? You need that to be able to support the new stores and also to support what you have to build to for the new stores, the foundation, right? The people, the systems, and the infrastructure. You're gonna continue to see us do that as we move forward, and that is gonna continue to be, you know, the priority for us. Once we get, you know, beyond that, in other words, we satisfy those priorities of supporting store growth and ample liquidity, obviously we'll consider giving back to the shareholders. You know, we've got a $100 million repurchase plan that's out there now, and that'll be in the considerations too. You talked about specifically CapEx and the numbers there. Over the last handful of years, a good amount of that was spent on building out our distribution network. That has slowed down. We're still gonna be expanding some of the existing ones, but, the spend is not gonna be at the same volume that we've had historically. That's gonna be more than offset by the increase in the new stores. We talked about in the press release today, 200+ stores, and even more importantly, over 400 conversions. That's a huge number. There's dollars in CapEx that's needs to support that. We are gonna see an increase in CapEx in 2023, versus 2022, and those will be the drivers. Still a payback, though, less than a year. Yeah. That model's still intact. That's why it's obviously the right investment for us is back in the stores, given our new store economic model. Still remains strong and to Joel's point, still paying back in less than a year. Got it. We've got about a minute to go, so maybe we'll end with this. Give me a crazy prediction about 2023. Retail-related, politics, sports. Take it however whatever direction you wanna go. You don't wanna get me on predictions. Am I going first or you? You go. go. Yeah, yeah. Look, I grew up, I was always taught when you get together with family, don't talk politics or religion. I'm with my retail family, so I'll leave the politics and religion aside. I'll go with TCU winning tonight and I'll be wearing- There you go. It's a big- You got some big fans. It's a big fan. I don't got a lot of fans there. It's a big one. Come on, TCU. All right. Go Horned Frogs. Got some fans there. Well, in that sports theme, I'm a little more superstitious, and I don't wanna jinx things. There is a football team in Philadelphia that could potentially win a very important game this year. I'll leave it at that. I have another, this should be a lock. I will not grow any hair in 2023. I think that's a lock of a prediction. I'm with you. I'm with you there. At least on my head. I'm with you there. Yeah. There you go. Thank you guys for doing this. Yeah, thanks, Paul. Really appreciate it. Appreciate it. Great job. Thanks, everybody. Thank you.