Good day, and welcome to the Five Below Q1 2022 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Christiane Pelz, Vice President of Investor Relations. Please go ahead. Thank you, Gary. Good afternoon, everyone, and thanks for joining us today for Five Below's Q1 2022 financial results conference call. On today's call are Joel Anderson, President and Chief Executive Officer, and Ken Bull, Chief Financial Officer and Treasurer. After management has made their formal remarks, we will open the call to questions. I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and our SEC filings. The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update our forward-looking statements. If you do not have a copy of today's release, you may obtain one by visiting the investor relations page of our website at fivebelow.com. I will now turn the call over to Joel. Thank you, Christiane, and thanks everyone for joining us for our Q1 2022 earnings call. When we last spoke at our Investor Day in March, we unveiled our vision for future growth, the Triple-Double, and characterized 2022 as a unique year within that framework, given the lapping of stimulus and ongoing macro issues, including record inflation, the war in Ukraine, and continued lockdowns in China. While 2022 is indeed proving out to be a unique year, the customer response to our new prototype has been overwhelmingly positive. We remain excited about our future and are focused on execution to convert our store fleet to the new prototype. Key initiatives related to this rollout include opening all new stores in the Five Beyond format, executing store conversions, and adding new products and services to celebrate rituals and milestones to further enhance the store experience. Now, on to the Q1. The Q1 was challenging from a sales perspective as we had to anniversary the impact of stimulus amid the uncertain macro environment. While sales in April came in softer than expected, we effectively managed costs and delivered solid bottom line results in line with expectations. Total sales in the Q1 grew 7% over last year to $640 million, while comparable sales decreased 3.6%, driven by a decline in both basket and transactions. We delivered diluted earnings per share of $0.59, driven by strong cost discipline. Our key growth driver, new store growth, continued with 35 new stores opened across 23 states. The new store in Albuquerque, New Mexico, ranked in the top 25 spring grand openings of all time. Other highlights of the Q1 include opening our 1,200th store in Union Square, Manhattan, and two other stores in the New York boroughs, as well as a new store in downtown Chicago. During the Q1, we also continued to make progress across our strategic initiatives of product, experience, and supply chain. On product, one of the key distinguishing features of our model is our team's ability to recognize trends and capitalize on them quickly. The flexibility of our model with our 8 worlds and ability to quickly shift is what makes the Five Below concept so unique. During the quarter, our merchants stayed on top of the Squishmallow trend we spoke about previously, sourcing new edition Squishmallows for our popular Squish Sunday events, which our store and marketing teams featured on social media and in-store marketing campaigns. The strong performance of the Squish trend drove outperformance in the sports world, while our candy world benefited from novelty candy, snacks, and drinks. Pet also continued to be a strong category in the room world. Turning to our second initiative, experience. As I outlined in my opening comments, we are excited about the latest prototype unveiled at our Investor Day. This newest model features a Five Beyond destination, our store within a store concept, which showcases reimagined tech and room worlds while also doubling the SKUs dedicated to Five Beyond. As we mentioned at the Investor Day, we are planning on converting over 750 of our current stores into this latest format over the next four years. Our mission is to bring Five Beyond everywhere. In 2022, we are on track to convert over 200 stores to the new Five Beyond prototype. Regarding the digital experience, we focused on developing deeper connections with our customers and communities while better engaging our crew. Through more effective digital marketing, we are growing brand awareness and are gathering data on our customers to better understand and market to them. We are also focused on enhancing the customer experience even further by letting them experience Five Below in the way they want. To that end, we are working on a BOPIS rollout this summer. Moving on to our third strategic priority, supply chain. Recall that we spoke in detail about the theme of controlling our destiny on Investor Day. While this area continues to be challenging, given the impacts of lockdowns in China, our teams remain nimble, putting us in a great position to flow the majority of our expected product into the ports, distribution centers, and our stores. This is a great example of how focused we have been on execution, and I am extremely proud of the progress we made. We were proactive in our approach, from securing additional container capacity to adding to our truck fleet at the ship centers. We have improved our inventory in-stock position significantly since the beginning of the year and have the freshest inventory since I joined Five Below. This sets us up nicely for the second half and allows us to take advantage of closeouts and one-time special buys that have already begun to emerge. As it relates to our distribution infrastructure, we are very excited to officially open the Indiana Shipping Center this summer to further gain efficiencies and speed to our stores and ultimately our customers. As a reminder, after we open this distribution center, which will enable us to service approximately 90% of our stores within one day, we will have completed our five-node network. We will then take a pause from opening distribution centers for a couple of years. The entire supply chain team has made great progress to set us up to serve incredible value to our customers this upcoming holiday season. In summary, we remain focused on our growth strategies with disciplined investments in people, systems, and infrastructure to support the execution of our future growth. Growth is at the center of our long-term strategy, and throughout the organization, our attention is solely focused on execution to deliver our Triple-Double strategy. We now have full line of sight on delivering our goal of approximately 160 stores in 2022 and have made significant traction on our 2023 goal of opening over 200 stores for the first time ever. Our scale continues to benefit us and our customers as we continually reinvest in wow products and provide the fun experience they expect from us. We are also poised to take advantage of dislocations in the marketplace, including merchandise and real estate, and will aggressively pursue the opportunities we are seeing, which we expect to grow given the current environment. While the pressures facing some of our customers due to the reduction in stimulus and the current inflationary environment weigh on our near-term results, history has taught us that consumers will seek out value even more when times are tough, and nobody is better positioned to deliver fun at outstanding values than Five Below. With that, I will turn it over to Ken to provide some more details on the financials. Ken? Thanks, Joel, and good afternoon, everyone. I will begin my remarks with a review of our Q1 results and then provide guidance for the Q2 and the full year. As Joel said, the Q1 was more challenging in April than we expected as we cycled the impact of large stimulus payments amid an uncertain macro environment while consumers experienced record high inflation. Our sales for the Q1 of 2022 increased 7% to $639.6 million from $597.8 million reported in the Q1 of 2021. As we have said on previous earnings calls, we believe that a meaningful measure of our performance in the near term is to compare our results to pre-pandemic results from fiscal 2019, given the outsized stimulus impact in 2021 and the impact of COVID in 2020. Sales for the comparable set of stores open in both the Q1 of 2019 and the Q1 of 2022 increased 17% or 5.4% on a three-year compound annual growth rate. Comparable sales decreased by 3.6% versus the Q1 of 2021, with a decrease in comp ticket of 1.9% and a comp transaction decrease of 1.7%. As we have seen since reopening our stores in 2020, our average ticket continues to be strong, increasing over 20% when compared to 2019. We opened 35 new stores across 23 states in the Q1, compared to 68 new stores opened in the Q1 last year. We ended the quarter with 1,225 stores, an increase of 138 stores or 13% versus 1,087 stores at the end of the Q1 of 2021. In line with our guidance, operating margin was 6.6%, which declined approximately 400 basis points versus the Q1 of 2021, with approximately one-third of the decline in gross margin and the remainder in SG&A expenses. As a comparison to a pre-pandemic period, these operating margin results were in line with the Q1 of 2019. Gross profit for the Q1 of 2022 was $206.8 million versus $200.9 million in the Q1 of 2021. As expected, gross margin decreased by approximately 130 basis points to 32.3%, driven primarily by fixed cost deleverage on the negative comp. As a percentage of sales, SG&A expenses for the Q1 of 2022 increased approximately 280 basis points to 25.7%. As expected, SG&A expenses as a percent of sales were higher than last year, driven primarily by fixed cost deleverage, higher store wages, and increased marketing. Our effective tax rate for the Q1 of 2022 was 22.3% compared to 20.9% in the Q1 of 2021. Net income for the Q1 of 2022 was $32.7 million versus net income of $49.6 million last year. Earnings per diluted share for the Q1 was $0.59 compared to last year's earnings per diluted share of $0.88. We had a share-based accounting benefit of approximately $0.03 in the Q1 this year compared to a benefit of approximately $0.04 in the Q1 last year. Now, looking to our balance sheet, we ended the Q1 with $320 million in cash equivalents, and investments, and no debt, including nothing outstanding on our $225 million line of credit. We repurchased approximately 247,000 shares in the Q1 of fiscal 2022 at a cost of approximately $40 million. Inventory at the end of the Q1 was $504 million as compared to $327 million at the end of the Q1 last year. Average inventory on a per store basis increased approximately 37% versus the Q1 last year. Average total units of inventory on a per store basis increased approximately 20% year-over-year. Accelerated merchandise receipts and higher inbound freight costs drove the year-over-year increase. As Joel previously mentioned, we are pleased with the makeup and level of our inventory and are well-positioned for our summer selling season. We remain disciplined and flexible in our inventory purchasing so that we can adjust to customer demand and preferences, chase trends, and be opportunistic in a dynamic supply chain environment. Now on to guidance. As we stated at our Investor Day in March, we expected 2022 to be a unique year for several reasons. First, lapping significant government stimulus. Second, the uncertain environment with residual pandemic impacts primarily on supply chains and store openings. Third, ongoing inflationary pressures, especially fuel costs. Fourth, cycling a very strong year of multiple merchandise trends. Given our Q1 performance and Q2 sales trends to date, we believe it is prudent to adjust our outlook. Our guidance for the Q2 includes opening approximately 30 new stores, sales of $675 million to $695 million, comps of between -2% to -5%, a 25% effective tax rate, net income between $41 million and $48 million with diluted EPS of $0.74-$0.86. At the midpoint of this guidance, we expect operating margin to be down approximately 450 basis points over last year, driven by deleverage in both gross profit and SG&A expenses. We had originally planned for a Q2 operating margin decline that moderated from Q1 levels due primarily to un-anniversaried freight costs, higher store wages, and increased marketing expenses. However, due to fixed cost deleverage on the lower sales outlook, we now expect a larger operating margin decline than in the Q1. Our current outlook assumes lower sales than originally planned for Q3 and an operating margin decline year-over-year of approximately 350 basis points, due primarily to fixed cost deleverage, higher store expenses, and increased marketing spend. As we look out further to the Q4, our current outlook assumes that more consumers overall and our customers specifically will be looking for better value, as we have seen in the past during difficult economic periods. For Q4, we currently expect an improvement in year-over-year sales trends from Q2 and Q3 levels, and we still expect significant operating leverage. We believe several factors will drive the sales improvement in Q4, including improved year-over-year inventory position and merchandise in stocks, expanded Five Beyond assortment and penetration of store count, and increased and more effective marketing. For the full year of fiscal 2022, we now expect sales of $3.04 billion to $3.12 billion, which is a reduction of approximately 5% versus our previous full year guidance. This sales range is an increase of approximately 66% versus fiscal 2019 total sales or an approximate 19% compound annual growth rate. For fiscal 2022, we also expect comps in the range of flat to -2%, which assumes an approximate 17% increase for the same subset of stores open in 2019 and 2022, which is in line with a similar comparison I mentioned for our Q1 2022 results. We expect an effective tax rate of 25%, net income in the range of $271 million-$293 million, and diluted EPS of $4.85-$5.24. We expect operating margin of about 12.2% at the midpoint of guidance, with the decline versus last year driven primarily by the leverage on fixed costs and higher SG&A expenses from a more normalized marketing spend. For fiscal 2022, we plan to spend approximately $225 million in gross CapEx, excluding tenant allowances, primarily for opening approximately 160 new stores, executing over 200 conversions to the new Five Beyond prototype, opening a new distribution center in Indiana, and investing in systems and infrastructure. We still plan to open approximately 60% of new stores in the second half of the year, including approximately 20 openings in January. Over the next two years, we still plan to open between 375 and 400 new stores. In closing, we remain committed to delivering an amazing experience and exceptional value for our customers, something that is even more important now than ever before. We will continue to manage our cost structure and spend with great discipline while staying focused on our long-term vision and sales and profitability targets. For other details related to our results, please refer to our earnings press release. That concludes our remarks, and with that, I'll turn it over to the operator to begin Q&A. Operator? We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourself to one question. If you have further questions, you may reenter the question queue. Our first question is from Matthew Boss with JP Morgan. Please go ahead. Great. Thanks. Joel, maybe could you elaborate on the softer than expected April across your world? Have you seen any change in consumer behavior so far in May or June? For Ken, are you embedding any improvement in the macro backdrop into this revised outlook? Maybe could you help walk through the underlying comp build for the back half of the year relative to trends in the business that you're seeing today? Yeah, Matt, I mean, obviously for the Q1, we guided 0%-2%, and we were with you guys pretty late in March. You know, for us to come in at -3.5%-ish comp, the April results were, you know, obviously softer than what we expected. I would also just tell you that, you know, like many retailers, this is an extremely hard time to, you know, predict exactly what's gonna happen as, you know, we were in the height of the stimulus from 2021. You know, while you know when the dollars were distributed, you know, it's really hard to tell exactly when they were used. You know, honestly, we probably focused a little too closely to when they were distributed and didn't give enough tailwinds, you know, into April and May from the stimulus. I think the other thing in May was, you know, there was a lot more tax return dollars in May last year than there was this year, and we didn't factor that into it. You know, I think the height of the biggest headwinds are behind us in that $1.9 trillion stimulus. You know, the consumer continues to face a lot of hurdles, you know, most recently being the formula shortage, which, you know, for families, it's gotta be something that's front and center on their mind, et cetera, et cetera. I think you can tell by our guide that we're, you know, expecting Q2 relatively in line with Q1. Then I think as the consumer gets out of their frozen mode, we'll start to seek out value, and that's where we start to do better. Then Matt, your question around the assumptions, I guess, in our guide or outlook around the macro backdrop. I mean, as Joel mentioned, we're really looking at the current environment at this point. I think one of the other pieces we add into it is the comment around, you know, customers returning to value and really going after value in these difficult periods. We do expect that to kick in. We've not seen that full benefit yet up to this point. When you translate that into the comps you mentioned. When you look at comps, obviously, with the guide, a negative comp for the first half of the year, and then given the guide that we provided for the full year of flat to -2%, it would assume positive comps in the back half of the year. We feel really good about the Q4 given some of the things that I called out and some of those factors, especially inventory positioning and in-stocks in Five Beyond. Our outlook right now assumes that we see what we're seeing in Q1 and Q2 kind of moderating sometime in Q3 and then much bigger benefits in Q4. Thanks, Matt. Yeah. The next question is from Simeon Gutman with Morgan Stanley. Please go ahead. Hey, guys. Can you talk about your ability to drive traffic, given you're somewhat aspirational, somewhat discretionary retailer, how do you drive traffic if, like, the trips are down in the background? Simeon, I was having a hard time. Are you asking how do we drive traffic as a discretionary retailer? Yeah. Any tactics that you lean into or you change given that the backdrop is evolving? Well, I mean, I think first of all, we certainly look back to the last time there was a recession in 2008 and, you know, that was a pretty successful time for Five. I wasn't here during that time. I was at Walmart at that time. We saw the same thing at Walmart. I think for us, you know, that's why so many of our remarks and comments were on value and the opportunities we're starting to see around one-time buys and special buys and that type of thing. I think as we especially get closer to holiday, the back half of the year, you know, we're gonna see a lot of customers start their trip at Five rather than finish their trip, because they know the value that they're gonna find there. So, you know, we start to move as we get into the back half of the year from a discretionary retailer into a needs retailer. History would tell us, and certainly from our days at Toys "R" Us as well, the last place the consumer will cut is for their kids. We see no reason that doesn't change this year. You know, that is why we're so focused on the value message as we look ahead to the second half of the year. Thanks, Simeon. The next question is from John Heinbockel with Guggenheim. Please go ahead. Joel, two related questions, right? How aggressive do you wanna be on closeouts, and in what categories and price points? Then secondly, maybe just remind us your philosophy on markdowns versus pack away. Yep. It's a good question, both of them. I think pack away is something you really have to balance. I'm taking your second part of that first. A few years ago we were too heavily invested in packaways. I think that worked really well when we were just a small regional player. As you become national, that becomes a really complex thing. You know, I don't expect us to see packaways becoming a big change in our philosophy going forward. Your second part of that, how aggressive on markdowns. I mean, sorry, on one-time buys. Look, John, if they present it to us in any category and it relates to, you know, our core customer, we'll be in the market buying them. We're starting to see those opportunities present themselves. That's been a pretty dry area for the last two years. We're, you know, Michael's given full carte blanche to him and the merchants to be chasing that product across all eight worlds. We expect our inventory to be very clean by the end of the year. This is product that sells extremely well at holiday. We've got a good track record in how to manage that, but we'll be aggressive in all eight worlds. Thank you. Thanks, John. Yep. The next question is from Paul Lejuez with Citi. Please go ahead. Hey, Joel, can you just frame the closeouts and special buys, like what percent of your sales does it typically represent versus where you think you might be going this year, next year? You mentioned capitalizing on some opportunities in real estate. I was curious if you could just dig into that a little bit in terms of what you're seeing there. Thanks. Yeah. Look, regardless of how you look at closeouts and special buys, it is a very small piece of our business. It was much bigger when we were a small chain. You know, we can't rely on closeouts to drive our business. You know, they're not gonna be sitting on 20,000, 40,000, 60,000 units of an item that we can constantly use as a flow of goods. Having said that, Paul, they really serve as traffic drivers. While it'll still be less than double digits of our total, we can use those in our emails and social media and really try and use that to lure customers into our store with incredible value. It's more opportunistic and it's more about you know, be able to drive traffic. We can use them for online exclusives. But it's really a nice piece of our strategy, but it doesn't make up the overwhelming piece of our business. As far as real estate goes, you know, as you've listened to some of the announcements of several retailers, you know, we're just coming back from ICSC a couple weeks ago, which is in Vegas, but probably the biggest real estate show of the year, which really hasn't occurred in the last couple of years 'cause of COVID. Our team came back energized. The landlords are talking to us. The landlords are getting excited and ready to get back to growth. They're starting to see some of their bottlenecks start to loosen up. I think that it's really been a sea change from where we were at the beginning of the year, where everything was kinda backing up into the back half of this year and into next year. We pretty much are done with all the deals for this year, and that's why, as my prepared remarks said, you know, we got great line of sight of the 160 for this year, and next year is really starting to shape up with the added, you know, commentary of the kind of the tenor of the meeting out in Las Vegas a couple weeks ago. Joel, are those rates coming in better than you anticipated at the beginning of the year? No, I mean, it's less of a rate change. Clearly, if we went into the C and D centers, we could easily take rates down, but we're still staying committed to the A and B centers, and it's just more about the opportunities presenting themselves as opposed to, at least at this point, a change in rate. Got it. All right. Thanks, Bob. The next question is from Brian Nagel with Oppenheimer. Please go ahead. Hi, good afternoon. My question, you know, if you look at the sales performance here in the quarter and particularly in the month of April, you're modestly short of the guidance. Under the underlying drivers, is that more a function of just lapping this really difficult comparison last year? Or are you seeing, you know, within your business some signs of a consumer that actually is pulling back? If you are seeing that, you know, maybe you could help us understand what that would be. Yeah, Brian, it's kind of a combination of both. I think because they both hit at the exact same time, it's really tough to tease out, you know, which one weighs more than the other. You know, clearly the consumer and, you know what? We can measure that because our, you know, lower household income markets are not performing as well as our higher income household markets. You know, that, you know, clearly those dollars have dried up from last year's stimulus. Those customers have less discretionary income, and therefore, that's where we've seen a tightening in sales. Kind of separating those two out, you know, because they happened at the same time, it's hard to weigh one over the other, but we are definitely seeing both. Got it. Thank you. Thanks, Brian. You bet. The next question is from Karen Short with Barclays. Please go ahead. Hi. Thanks very much. I just wanted to go back to guidance for the second half, more specifically. I mean, obviously, I appreciate that things are very volatile right now, but when you look at your second half guidance with respect to, and I'm looking at this on a three-year basis, but three-year sales growth, three-year comp, three-year EBIT growth and margin expansion implied, it just seems that, you know, you really need to see meaningful strength in the second half that doesn't necessarily seem realistic. I wanna tie that into the fact that I know you feel good about your inventory, but obviously inventories are up quite a bit, year-over-year. The question is like, what's the risk that you really have to have much greater markdowns in light of the ongoing weakness in the consumer? Yeah. Thanks, Karen. There's obviously different ways to look at the numbers now, given, you know, the challenge in comparing things year-over-year, right, with the pandemic and other challenges there. One way to look at it, and I'll put out there, is to go back again as we did for our Q1 results and look at 2019. One way you could do it is to go back and look at, you know, the average sales per store in 2019, which again was a more normalized year pre-pandemic. When you look at that, you'll notice that the increase on a quarterly basis is relatively consistent when you look at the Q1 and the third and Q4. There's a little bit of a shortfall in the Q2, again, based on the current environment and what we're seeing. It really kind of gets back to Q1 levels that we saw. When you look at it that way, and I think when you look at it from a geometric stack basis also, you see that same trend where the back half of the year is getting back in line with the Q1. You don't see it as much as a, I guess, a hockey stick that you're mentioning there. Yeah, in fact, all you have to do is believe we'll perform at the exact same levels as Q1. Right. I'm not sure what numbers you're looking at, but that's kind of how we thought about it in terms of, the back half versus Q1. Yeah. Just the inventory risk potential? Oh, you know what? I mean, maybe our bad, we should have probably talked about it at the Investor Day, but I mean, this. It was part of our plan to be up significantly year-over-year. Some of it was about just pulling forward. I mean, we did not have the inventory levels we wanted in Q4 last year, and we wanted to ensure we were, you know, ready for summer here. A piece of it is inflation costs. I mean, our, you know, our inventory levels include all the, you know, added shipping costs, et cetera. That's all in it. That wasn't there a year ago. You know, is it, you know, is it up a little bit more because of the sales miss? You know, sales miss isn't that much, isn't that far materially off what we guided. You know, a few percent, but overall, there's really no concern from our end. In fact, I'll tell you what, it's the cleanest inventory I've had since I've been here in terms of newness and that should really bode well for the customer. Okay, thank you. All right. Thanks, Karen. Thanks, Karen. The next question is from Edward Kelly with Wells Fargo. Please go ahead. Yeah. Hi, guys. Good afternoon. So just, you know, additional sort of color on, you know, what you think is driving the most recent slowdown. What I mean by that is, like, how have the trend right product, you know, Squishmallows, like, how has that been performing? Has that slowed at all? I know you're taking some price, I guess, for the inflation. Has elasticity on that, you know, pricing changed much? Just, you know, one more on Q4. You know, I know you've had trade down in the past, like in 2008 and 2009, but that was also, you know, a big stimulus environment, which we probably won't see. Just curious, are there other things that have you optimistic about Q4, like product pipeline and the holiday? Maybe you could speak to that. Thanks. I mean, go back to my prepared remarks. I mean, Squish has continued to be very strong for us. You know, we are up against Pop Its from last year, which is that trend's pretty much over. P.S., anyone worried about markdowns, we're very clean on that. I think Squish is a great example of, you know, as we find great trends, the customer is still buying those trends. You know, licenses has been a nonexistent trend for a couple years now. You know, we see that as an area that could potentially start to emerge with finally having movies out there again. We will chase trends as much as we'll chase value. You know, for Q4, you know, we'll have over 200 new stores in the prototype. We've got lessening of stimulus impact. We've got everything I talked about earlier, how we become a need store instead of a want store in Q4. All those, you know, add really lean towards a positive outlook on the back half of the year as we kinda get through the worst of the headwinds from prior years. Ken, anything I can add? Yeah, just add a little bit more on the Q4. I mean, we mentioned in the prepared remarks too, the better inventory position than we were last year. Oh, yeah. I mean, we all know about the supply chain challenges last year. Again, the supply chain teams and the buying teams have just done a great job in terms of the right amount of inventory and what we need to have. Then also the marketing, right? We're getting better at our marketing, more effective at our marketing, especially on the increased digital. You put those into the mix, that's why you're hearing those comments that we're making around the potential for Q4 and holiday. All right. Hey, thanks much, Ed. Take care. Thanks, Ed. Yep. The next question is from Michael Lasser with UBS. Please go ahead. Good evening. Thanks a lot for taking my question. If you do a -3% to -4% comp for the full year rather than the flat to 2% for the full year, would you have more or less than $0.50 of EPS risk to your full year guidance in light of the deleverage on negative comps you would experience in the back half? Thanks a lot. Michael, you're asking. Okay, if we do a minus- 3%-4% instead of flat to 2%. Yeah. I mean, I don't have the exact figures here from an EPS impact, but it's not gonna be a-- if you mentioned a $0.50 impact. Is that what you're saying? Would it be more or less than a $0.50 impact? The overall takeaway from the earnings release for folks is that the outlook for the back half of the year is optimistic. If you could frame a downside case scenario for earnings for the year in light of that viewpoint, it would be helpful. Yeah. I think, Michael, one of the ways to look at that, as you listen to us today, we're being impacted by things like fuel surcharges and increased fuel costs that other retailers are, but you didn't hear us really talk about that in terms of a total impact for the year. What's going on embedded in our operations and results is cost mitigation strategies that we're working on. It's one of the things you've known us for a long time. This is where Joel has mentioned, you know, we're a nimble organization, and we respond to these things. If you look at the assumed reduction in sales from our prior guidance for the back half of the year, you're right, you would probably assume a larger negative flow through to earnings. All that we're doing internally here is pretty significant in terms of cost mitigation strategies and other cost efficiencies that we're using to offset that. That probably helps, you know, frame up that back half that you're seeing that looks a little bit better than what you would expect given the sales change from the last guide. Take the example of real-time Q1. Yeah. You know, it's roughly 2 percentage points a comp below the guide, and yet earnings came in, you know, right at the midpoint. Yeah. You know, I think we've got flexibility on our side to really manage the business, and I certainly wouldn't forecast that big of a decline in earnings. Yeah. We're doing that without putting the math together, Michael, but hopefully that gives you some outlook on how we're thinking about it. Yeah. Thanks, Michael. Thanks. The next question is from Charles Grom with Gordon Haskett. Please go ahead. Hey, Ken, Joel, when you unpack and evaluate the 1Q comp miss, I still don't understand, was it frequency that changed? Was it basket size? You know, you talked about your basket being or ticket being 20% higher than 2019. Was it frequency? Was it basket? Then it sounds like May and into June has been soft, which is, you know, frankly counter to what a lot of retailers have said. I'm just curious why you think that's the case for Five Below. Yeah. You know, on the first one, it's roughly 50/50 on that. As for May, honestly, we didn't give enough credit to, you know, lapping the Pop Its peak, Pop Its trends peak from last year in May. That was our biggest, much bigger than spinners were back in 2017. I think that combined with, you know, the end of the stimulus and, you know, everything from formula shortage to all the other things going on that we've been talking about. We didn't put enough into forecasting May correctly there. You know, as you can tell, you know, by our conversation here, we see the back half of this quarter already starting to improve. It was mostly driven by a really soft May relative to our initial forecast. Okay, thank you. Thanks, Charles. The next question is from Joe Feldman with Telsey Advisory. Please go ahead. Yeah. Hey, thanks for taking the question, guys. Wanted to ask you, again, I may have missed if you said it earlier, but, like, did you start to see any trade down in the quarter? I know, you know, whether it's customers that you hadn't seen before coming in or maybe even, you know, kids starting to buy fewer items or, I don't know, lower priced items within the basket. Yeah. No, look, we have yet to see a meaningful signal of the trade down happening. You know, that's not too unusual in the beginning of a tough period of time. At this point in time, Joe, we haven't seen it. You know, as far as ticket goes, you know, a little softening in the number of units, and that's more than offset by the AURs, as you know, we have taken prices up. You know, the overall, no, we haven't seen any. Got it. Thanks, guys. Appreciate it. Thanks, Joseph. The next question is from Jason Haas with Bank of America. Please go ahead. Hey, good afternoon. Thanks for taking my question. You'd mentioned that you saw stores in lower income markets underperforming. I'm curious what you've seen in regards to the reception to Five Beyond in those markets and just a broader question about how you feel about rolling out those prior higher price point items in an environment where the customer is gonna be a little bit more cash constrained. Yeah. As far as Five Beyond goes, you know, we haven't seen any differential there, because it's all about value. I mean, it's an incredible value that we deliver in Five Beyond. That, my comments were, you know, largely about the overall economy and, you know, our, you know, negative comps are being driven more by our, low household income stores versus our higher household income stores. No concern and have not seen any on the Five Beyond. I know that might sound counterintuitive, but you know what? They appreciate the extreme value. It, our customer notices it. That's good to hear. Thank you. You're welcome. Thanks. The next question is from Jeremy Hamblin with Craig-Hallum Capital Group. Please go ahead. Thanks. Wanted to see if I could ask maybe a totally different question. Ken, you know- Sure. The China tariffs that have existed on product inbound from China over the last few years have had an impact that hasn't been talked about a lot, but, you know, it's in the news. The here and now, given that, it sounds like we're moving in a direction where a bunch of tariffs are going to be removed. I wanted to understand, one, what percentage of your inventory is subject to tariffs today. And two, if all tariffs were removed on the products that you're importing, what would the potential margin benefit be for the firm on a total basis? Jeremy, thanks for that question. Yeah, I haven't thought about tariffs for a while. Feels like that's been years. Just to start off, there's nothing assumed in our guidance that for any reduction or change in tariffs, we're assuming that they'd be at the same level. I haven't heard or read of anything yet that of any definitive action that's gonna be taken. A lot of it was on kinda tech product for the most part. In terms of the percentage that were impacted, it was probably between about 20% and 25% of our imports. Yeah. Yep. That were impacted for the tariffs. I apologize. I haven't done any math on if those were reversed, whether partially or in full, what impact they would have on the business or operations overall. Just keep in mind also, Jeremy, if that does get reversed, which we'd appreciate, we'll take that. Unless they do it retroactively, you know, we still gotta move through all our existing goods before we, you know, start to feel the positive impact of that. It's roughly in that 20%-25% range. Yeah, of imports. Of imports. Yeah. A much smaller portion of total receipts. Yep. Yeah. Yep. Yeah. Yeah. I think it's more of a. All right. Hey, thanks. 2023. Thanks. Yeah. Oh, yeah, absolutely. That's where the focus would be on that. We'd take it. Be a nice tailwind. Yeah. All right, thanks. Thanks, Jeremy. The next question is from Scot Ciccarelli with Truist. Please go ahead. Hey, this is Joe on for Scott. I just had two quick questions. The first, just can you provide a breakdown on the lower income versus higher income consumer base that you have, just 'cause of the impact that it had here? Secondly, just following up on the traffic issue that you guys saw, would you say that maybe the lower income consumer is just cutting all discretionary spending in general? Or do you think there's something where they're driving less to shopping centers because of higher gas prices or something like that? You know what? Look, it's hard to tease all that out at the same time, Joe, 'cause don't forget that same customer is up against stimulus from last year, so you know, it was an inflated strength. But roughly a third of our fleet consists of stores where the household income is less than $50,000. So just to give you some perspective on that. You know, I certainly can't per se say that they're not spending any money on discretionary income, but I think all of the stuff you're talking about are certainly you know, possible outcomes of you know, consolidating gas trips and et cetera, et cetera. But it roughly represents about a third for us. Gotcha. Thanks. All right. Thanks, Joe. The next question is from Michael Montani with Evercore ISI. Please go ahead. Hey, thanks for taking the question. I just wanted to ask, if I could, on three specific areas of input costs, which was basically what you guys are seeing in terms of transport costs, if you're able to see any relief if spot rates were to come down on ocean freight in the back half, or if you've kinda termed that out so that you may not participate. Secondly was around diesel, you know, if if you've baked in any relief in the back half or if that assumes kinda record levels persist. Then lastly was around wages, you know, if there's any signs of peak there in terms of input cost inflation from wage rates. I mean, you know, we largely do not participate in the spot rate. I don't know, Ken, are you there? Yeah. I think just on those, Michael, on those three areas on kinda inbound freight, you know, ocean freight and containers, if you recall, we lock up a significant almost all of our capacity and rates, and we did that at the end of last year really for a multiyear period. Those are locked in. We've got real clear visibility to capacity and rates, which is good for us to have, so that's baked into our guidance. You mentioned diesel. Of course, the fuel surcharges are at historic levels and increases from what we've seen over in the past. We've assumed those amounts, current levels for the rest of the year, so we've not assumed an improvement in fuel surcharges. With regards to wage rates, we said this before, I mean, obviously, we're gonna remain competitive out there with our crew and out in the field and getting the best talent that we have. But we, you know, any anticipated increases, whether it's based on mandated minimum wage increases by state or anything that we anticipate, has been baked into our guidance. Yeah. Unless the states change this year, I think we've got everything baked in, and I wouldn't expect any other surprise changes coming in this year. Mm-hmm. All right. Thanks, Michael. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Joel Anderson for closing remarks. Thank you, operator, and thanks everyone for joining us. While the Q1, as you can tell, was certainly challenging, we are focused on being nimble as we navigate this dynamic operating environment. You know, we continue to believe Five Below is an innovative and resilient retailer with a long runway for growth. We have an industry-leading new store payback model and a strong balance sheet. None of that changes. We remain focused on delivering incredible value and quality merchandise with a commitment to strong expense management and cost discipline. These attributes are distinguishing characteristics which will serve us well as we continue to grow. In closing, wish you all a great summer and an end to the school year. Our summer fun list is out there with amazing list of products. As always, I encourage you to shop at Five Below for all your outdoor, pool, and beach needs. We look forward to speaking with you again at the end of the summer. Have a great evening. Thanks, everybody. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.