Good day, and welcome to the Five Below Q4 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 one on your touchtone phone. To withdraw your question, please press star 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 Q4 2022 financial results conference call. On today's call are Joel Anderson, President and Chief Executive Officer, and Ken Bull, Chief Operating Officer and 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 press release, you may obtain one by visiting the investor relations page of our website at fivebelow.com. I will now turn the call over to Joel. Thank you, Christiane. Thanks everyone for joining us on our Q4 2022 earnings call. As we stated at the ICR Conference in January, we were pleased with our holiday performance, which was at the high end of our guidance despite the impact of snowstorms leading up to Christmas. The season played out as we had expected, with an improved inventory position and more targeted digital marketing, helping fuel sales as our Save the Holidays campaign resonated with customers looking for value. Results for both the holiday period and the quarter overall were driven by transactions, our proxy for traffic, which demonstrates the effectiveness of the value and while we delivered, especially important in this inflationary environment. We finished the quarter with a strong January, resulting in total Q4 sales of $1.1 billion for growth of 13%. A comparable sales increase of 1.9% and earnings per share of $3.07. Needs-based items continue to be popular, as demonstrated by outperformance in our candy, seasonal, and create worlds. Our customer is clearly looking for value and convenience, and the flexibility of our model allows us to quickly respond and bring them the products they want. We started 2022 knowing it was going to be a challenging year, giving the extraordinarily strong stimulus influence results of fiscal 2021. We did not expect inflation to be as high as it was and across so many key areas. Five Below is a resilient retailer, and we quickly pivoted and adjusted to the new operating environment. I could not be prouder of how the organization rallied to deliver sales over $3 billion and 11.2% operating profit margin for the year despite these headwinds, I want to thank them for their commitment to executing with excellence. Let me summarize the major accomplishments of fiscal year 2022. One, starting with product. We are a merchandise-driven company, and we are passionate about sourcing an incredible trend right assortment for our customers at outstanding value. We stay on top of hot trends and swiftly move to capitalize on them while creating fun for our customers with events like Sunday Squish Day for exclusive Squishmallows. In 2022, we were up against strong trends from 2021 and successfully lapped those by finding amazing value products in Hello Kitty, Funko, and Marvel collectibles, as well as other licensed products such as Kendall + Kylie crossover bags. The flexibility of our model and our eight worlds is unique and enables swift recognition and introduction of trend right and relevant products to our customers. We have honed our expertise and discipline to effectively manage the constant cycling of these trends. Number two, new stores. They remain a key growth engine with the opportunity for 3,500 plus Five Below locations nationwide. In 2022, we opened 150 new stores, including 48 in the Q4, with a total ending store count of 1,340. We are seeing continued strong new performance, demonstrating how effective our model is with an industry leading less than one year payback. Number three, the Five Beyond Prototype. Since the reveal of our new store prototype at the March Investor Day, featuring the store within a store Five Beyond section, we successfully converted nearly 250 stores in 2022, or almost 20% of our store fleet into this format. Number four. Digital and data. We created a data science team and began using tokenization tools to gather sales data to communicate with our customers more effectively, as well as to better target new customers. We have improved our ability to meet our customers where they are, whether it be TikTok, Instagram, or Snapchat, among other social media platforms. We are still in the early stages of this journey and see great future potential to increase loyalty. Number five, brand awareness. Our overall brand awareness continues to grow as we densify across markets, increasing by eight percentage points in 2022 to 67%. We believe part of this strong growth is due to our new and burgeoning data analytics capabilities, giving us more customer insights and fueling more effective digital marketing. We expect our brand awareness will continue to increase over the coming years. Number six, crew. In 2022, we opened our annual associate engagement survey to all Five Below crew members, including full-time and part-time, across our stores, ship centers and WOWtown. Our engagement scores landed us in the top quartile of Gallup's overall company database, which includes thousands of companies across multiple industries. We are very proud with the level of engagement of our crew. We will continue to focus on hiring outstanding crew members and building engaged teams. While achieving these milestones, we also built out our capabilities and distribution, both for e-commerce and stores. We completed our five-node distribution center network with the opening of our Indianapolis location, leading to greater efficiencies and opportunity for improved operations for the chain. Additionally, we rolled out BOPUS across our chain in September and are pleased with the initial customer response and see a big opportunity to continue to grow. These are examples of how we are evolving into a true omni-channel experience, meeting the customers where and how they want to shop. Now let me turn to 2023 and where we are with our Triple-Double vision. We moved swiftly from strategy to execution. We reconfigured our team. We adjusted and hired new leadership. All this was done to support five new strategic pillars, which are, one, store expansion, two, store potential, three, product and brand strategy, four, inventory optimization, and five, crew innovation. We are looking at each of these five through the lens of customer relevancy and using technology to drive results while focusing on unleashing the power of data and analytics. Allow me to give you a brief overview of each one. Given that new stores continue to be the key growth engine at Five Below, store expansion is unsurprisingly the first pillar. As we said at our investor day last year, we are expanding our reach to put Five Below anywhere. We have refocused resources to accelerate our store growth and reach a milestone of 200 new stores this year. For example, we overhauled our real estate review process to make it more efficient, and we also expanded our view of the types of centers in which we can locate a Five Below store. In addition to our traditional focus on suburban power centers, we are now accelerating urban as well as semi-rural stores and are testing alternative venues. We are excited to get back to growing our new store base again. Moving on to our second pillar, store potential. With average unit volume or AUV of $2.4 million and a stated goal of getting closer to $3 million, we know we have a fantastic opportunity to increase AUVs throughout the chain. We are driving comp store growth through the continued conversion of our fleet to the Five Beyond prototype, as well as introducing new product categories and services throughout the store. Our goal is for Five Beyond everywhere. We already announced plans to convert 400 more stores to the new format in 2023. Customers who buy a Five Beyond item, defined as $6 and above, continue to spend over twice as much as those who buy only Five Below items. Illustrating how powerful a driver these store conversions and Five Beyond products are to maximizing the productivity of our stores. Some examples of other store changes in the prototype are new offerings of ear piercing and helium balloons, which we tested throughout 2022 and are now rolling out to over 500 stores. Customers love the convenience and value of our ear piercing services, our snarky helium balloon assortment, and the one-stop shopping we offer for parties and gifts. Our third pillar is product and brand strategy. Product is at the core of who Five Below is. Our merchants are relentless about scouring the globe to pursue value, trends, wow, and newness. That will never change. As we've seen in the past, our growing scale opens up even more incredible opportunities to source amazing products across categories our customers will love. As we continue to open locations and expand Five Beyond conversions to 400 stores in 2023, we are bringing our brand to more and more people. Our aided brand awareness in mature markets like Philadelphia is around 70%. In newer markets opened less than two years, our brand awareness has grown to 50%. With top specialty retailers in the eighties, we see an opportunity to increase brand awareness in all of our markets. The Five Below brand will continue to be amplified with increased digital marketing, supported by customer data analytics to retain existing customers and attract new customers. The fourth pillar is focused on inventory optimization. The focus of this pillar is to further enable the scale required for the Triple-Double strategy, while continuing to leverage inventory as an asset to drive sales and maximize profits. We have made many improvements to our systems and infrastructure over the last several years. We've implemented new systems for retail merchandising, inventory ordering, and distribution management, all while increasing ship center capacity and capabilities. We still have a huge opportunity to make further strides, particularly on the movement and levels of inventory. With our five-node DC network, we know we can better optimize the efficiency of the current systems and processes to better utilize our new configuration. For 2023, our initiatives include a new upgraded merchandise planning system. Our job now is to integrate all these capabilities and leverage the resulting benefits to optimize inventory, forecasting, ordering, replenishment, and flow with a goal of improving turns and end-to-end visibility. The fifth pillar is crew innovation. Five Below would not be the company we are today without our crew, whether it's in the stores, ship centers or at Wowtown. We want to create amazing experiences from crew to customer. I'll focus on our store associates as they are key to bringing Five Below alive for our customers, so they can let go and have fun. Our store managers especially, are critical to the success of the store, instilling the Five Below way and the values into all our associates. With plans to hire thousands of new managers over the next several years, we know we need our store managers fully engaged. As our culture ambassadors, they are key to our future success. We are developing strategies and plans to ensure they have the tools and training they need to drive engagement and model our values. Speaking of our crew, let me spend a couple minutes sharing my thoughts on our executive team. We have made some significant enhancements in the last 60 days that will positively impact our go-forward momentum, drive success at scale, and grow with discipline. We added Amit Jhunjhunwala to our executive ranks as our CIO, reporting directly to me. There is nothing we do that technology doesn't impact. Amit is a seasoned technologist, joining us from Adidas, where he was their CIO, North America. We also announced earlier this week, the promotion of Ken Bull to Chief Operating Officer. This is a great opportunity for us to further leverage Ken's deep knowledge of the entire organization and put him in a role to make a broader, excuse me, impact on delivering our growth goals. With the addition of a new CFO later this year, who will report directly to me, Ken's new role positions him to increase his focus on important building blocks, our Triple-Double growth vision across talent, systems, processes, including direct responsibility for our inventory optimization pillar. In summary, we are pleased with the results in the Q4, as well as the progress we made on our strategic initiatives throughout the year. We enter fiscal 2023 from a position of strength. We have evolved our operating structure to enable our teams to execute the long-term growth initiatives that underpin our Triple-Double goals. With that, I will turn it over to Ken to review the financials in more detail. Thanks, Joel, and good afternoon, everyone. Before I provide my review of the Q4 and year, I wanted to let you all know how excited I am for my new role. As COO, it will give me the opportunity to drive continued success of Five Below as we execute the Triple-Double vision. We've achieved incredible growth and success in the 17+ years I've been with the company, and looking forward, there is a large runway for expansion and an opportunity to increase productivity and to drive the brand to new heights. My new role allows us to sharpen leadership focus and narrow span of control as we execute the initiatives that underpin the Triple-Double vision. Specifically, I'm now responsible for the inventory optimization pillar and have oversight of merchandise planning and allocation, data and analytics, strategy, communications, and legal teams. I will continue as CFO until we appoint my successor, who I am confident will benefit from the talent and strong discipline of our current financial organization. On to the financial discussion. I will review the Q4 and fiscal 2022 results and then discuss full year and Q1 fiscal 2023 guidance. Our sales in the Q4 of 2022 were $1.12 billion, up 13% from the Q4 of 2021 and above the high end of our guidance range. We ended the quarter with 1,340 stores, a year-over-year increase of 150 stores, or 12.6%. We also converted nearly 250 stores to the new Five Beyond format since our investor day at the end of March. We continue to be pleased with the performance of our new and converted stores. Comparable sales increased 1.9% for the Q4 of 2022, also above the high end of our guidance range and against a 3.4% comp increase in the Q4 of 2021. The comp increase for the Q4 was driven by a 2.8% increase in comp transactions, partially offset by a 0.9% decrease in comp average ticket. We were pleased to see comp transactions turn positive in the Q4. As Joel mentioned, our strong holiday execution and performance were the key drivers of our comp performance, coupled with accelerated momentum and favorable weather in January. Gross profit increased 14% to $452.4 million from $396.9 million reported in the Q4 of 2021. Gross margin finished at 40.3%, increasing approximately 50 basis points from 39.8% last year. The increase in gross margin was driven primarily by cost management strategies and distribution and freight expenses, partially offset by higher than expected shrink. On an annual basis, shrink for 2022 was approximately 30 basis points higher than what we experienced in 2021. SG&A, as a percentage of sales for the Q4 of 2022 decreased approximately 80 basis points to 20.2% from 21% in the Q4 of 2021 due to lower incentive compensation and cost management strategies, which were partially offset by deleverage of fixed costs and higher marketing expenses. Operating income increased 20.4% to $225.8 million. Operating margin increased approximately 130 basis points to 20.1% of sales from 18.8% of sales in the Q4 of 2021. The effective tax rate for the Q4 of 2022 was 24.8%, compared to 25.1% in the Q4 of 2021. Net income for the Q4 increased 22.2% to $171.3 million from $140.2 million, and EPS grew 23.3% to $3.07 per diluted share versus $2.49 per diluted share last year. For fiscal 2022, total net sales were $3.08 billion, an increase of 8%. Comparable sales decreased 2% versus the 30.3% comparable sales increase of 2021. This comparable sales decrease was driven by a 1.9% decrease in comp average ticket and relatively flat comp transactions. Gross profit for the full year increased 36% to approximately $1.1 billion. Gross margin decreased by approximately 60 basis points to 35.6%, driven primarily by deleverage of occupancy expenses on the negative comp. SG&A, as a percentage of sales for the year, increased 160 basis points to 24.4% from 22.8% in 2021, due primarily to higher marketing expenses and deleverage of fixed costs on the negative comp. Operating income of $345 million decreased 9.2% in 2022 compared to last year. Operating margin of 11.2% decreased approximately 210 basis points from last year's operating margin of 13.3%, driven by the gross margin and SG&A deleverage just discussed. Our effective tax rate for the year was 24.7%, compared to 24% in 2021. The increase in the effective tax rate for the year was due primarily to a lower tax benefit from share-based accounting. Diluted earnings per share was $4.69 for fiscal 2022, a decrease of 5.3% versus diluted earnings per share of $4.95 for fiscal 2021. Diluted EPS included a $0.04 benefit from share-based accounting in 2022 and a $0.06 benefit in 2021. We ended the year with approximately $400 million in cash equivalents, and short-term investment securities and no debt. We made share repurchases of approximately $40 million or 247,000 shares for the year. Inventory at the end of the year was $527.7 million as compared to $455.1 million at the end of 2021. Ending inventory on a per store basis increased approximately 3% year-over-year, which, as expected, was a significant moderation. We strategically pulled forward inventory throughout the year in order to be in a good in-stock position, especially for the all important holiday season, and we were very pleased with the results. The combination of improving global supply chains and our inventory disciplines contributed to this outcome. With respect to CapEx, we spent approximately $252 million in gross CapEx in fiscal 2022, excluding tenant allowances. This reflected opening 150 new stores and completing nearly 250 conversions to the new Five Beyond format, opening the new Indiana distribution center and investments in systems and infrastructure. Our CapEx spend was higher than we had initially forecasted, due primarily to accelerated purchasing of store fixtures and equipment for both conversions and new store openings in 2023. I'd like to turn to our guidance. For the year, we are providing a range of potential results that reflects the uncertainty of the macroeconomic and consumer environment. On the high end, we assume a continuation of the current backdrop, while on the low end we assume some degradation from intensifying consumer pressures. Fiscal 2023 includes a 53rd week, which is expected to add approximately $40 million in sales and approximately $0.08 in EPS. My remarks will refer to the 53-week year unless otherwise noted. For 2023, sales are expected to be in the range of $3.49 billion-$3.59 billion, an increase of 13.3%-16.8%. The comparable sales increase is expected to be in the range of 1%-4%. We plan to open 200 new stores and expect to end the year with 1,540 stores, or unit growth of approximately 15%. The majority of new stores will be in existing markets. We are entering one new state, Vermont, and expect to finish 2023 operating in 43 states. We expect to open approximately one-third of our new stores in the first half of 2023, compared to over 40% in the first half of 2022. This lower store opening cadence in 2023 is primarily due to landlord related and permitting delays. For the full year, the midpoint of our guidance assumes slight leverage in operating margin, though the quarterly cadence will vary. In 2023, we expect significant leverage from freight expenses that will be largely offset by lapping lower than average incentive compensation and certain one time cost management strategies we put in place last year. With our strong cash balance and healthy free cash flow generation, combined with higher year-over-year interest rates, we are assuming a significant increase in interest income this year. We expect a full year effective tax rate for 2023 of approximately 25%, which does not include any potential impact from share based accounting. Net income is expected to be in the range of $295 million-$323 million, representing a growth rate of approximately 12.8%-23.6% over 2022. Diluted earnings per share are expected to be in the range of $5.25-$5.76, implying year-over-year growth of 11.9%-22.8%. On a 52-week comparative basis, growth for diluted earnings per share is implied to be 10.2%-21.1%. This guidance does not include any potential future impact from share repurchases. With respect to CapEx, we plan to spend in total approximately $325 million in 2023 in gross CapEx, excluding the impact of tenant allowances. This reflects the opening of 200 new stores, 400 conversions, expansions to our distribution centers in Georgia and Arizona, and investments in systems and infrastructure. For the Q1 of 2023, net sales are expected to be in the range of $723 million-$735 million, an increase of 13.1%-14.9%. We plan to open approximately 25 new stores in the Q1 this year as compared to 35 stores opened in the Q1 last year and are assuming a Q1 comp sales increase in the range of 2.5%-4% versus a 3.6% comp decrease last year. We expect operating margin of 5.7%-6.2% in the Q1 of 2023, or deleverage of approximately 70 basis points at the midpoint, driven primarily by a more normalized level of marketing in the Q1 this year. Diluted earnings per share for the Q1 of fiscal 2023 are expected to be $0.59-$0.65 versus $0.59 in diluted earnings per share in the Q1 of 2022. The Q1 of 2022 had a $0.03 benefit to EPS from share-based accounting. We are expecting differences in year-over-year leverage and operating margin results across the remaining three quarters. While it remains our practice to provide guidance for the current quarter and full year, I will provide some directional comments on how we are currently thinking about quarters two through four. For the Q2, we currently expect modest operating margin deleverage as higher incentive compensation is only partially offset by lower freight expenses. For the back half of the year, we currently expect operating margin leverage driven by lower freight costs, offset in part by higher incentive compensation and lapping certain one-time cost management strategies. We expect higher year-over-year leverage in the Q3 versus the Q4. For all other details related to our results and guidance, please refer to our earnings press release. With that, I would like to turn the call back over to the operator for the question and answer session. 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 re-enter the question queue. Our first question comes from Simeon Gutman with Morgan Stanley. Please go ahead. Hi, good afternoon, everyone. I wanted to focus on the 1%-4% comp guidance range. Can you share with us if it's balanced between price and units? Does it lean more heavily one side or the other? I don't know if you can compare it to what 2022 looked like, and if you're seeing any sensitivity to higher price items at the store. In terms of the second part of that, Simeon, we're really not seeing any sensitivity, higher to lower priced items. It's been pretty balanced. We continue to be pleased with the Five Beyond rollout, and that penetration continues to increase, and there really hasn't been any pushback. That's been really good. On the other end of it, we really pushed the $1 items at holiday, and that was successful as well. I think the customer appreciated the balance between both. You know, as far as the guide goes, from one to four, you know, the sensitivity isn't any more towards, you know, price versus transactions at all. You know, I think it's, it's more, Simeon, about, you know, if you just take it the midpoint, that indicates, you know, slight leverage over last year, which is actually about 50 basis points lower than what we had originally said at ICR. you know, I think the upper end reflects, you know, continuation of the trends we're seeing today. I think in this environment today, I think it's prudent that we, you know, continue at a wider range as, you know, we deal with unknowns, like the banking issue most recently. The next question is from Matthew Boss with JPMorgan. Please go ahead. Great. Thanks, and congrats on a nice quarter. Thanks. Thanks. Joel, can you speak to recent performance from your new store cohorts and maybe elaborate on the flexibility across your eight worlds to maneuver the assortment between need-based versus discretionary purchases? Ken, on the cost structure and your ability to find continued efficiencies in the model, should we think of 3 comps as the right level of comp needed to leverage SG&A, or could you actually pivot and lever on a lower level of comp if needed? Yeah. Look, I think the flexibility, Matt, is not limited in just consumables. I think we've been demonstrating that for many, many years. In the past, we've tended to talk about trends, whether it be spinners or Squishmallows or poppers, anything like that, and those constantly show up in different categories. The customer knows, like, "Hey, I should go to Five Below because they'll probably have that trend." In the last 12 months, we've really seen it be all about, you know, consumables. In our world, that's candy, snack, HBA, travel. The merchants did a great job As that area was picking up, we increased our assortment, kept our shelves full. That's just what we do no matter what the trend might be. The new is a great example that, you know, that we're not seeing any signs that what we shared at the Investor Day shouldn't continue, regarding the, you know, comp profile of, you know, mid-single digits for conversions. Ken, you wanna talk leverage? On the leverage. Yeah. Matt, your question, around the comp and the leverage, the comp point for leverage, you're right. Historically, we've talked about 3%. There's been a lot of noise over the last few years. It's hard to really kind of decipher based on the most recent activity. Joel mentioned it before, if you just look at 2023 now, again, there's a few things going on this year that are not normalized, right? We're getting back to a more normalized incentive compensation. We're lapping some of these one-time cost management strategies. Even with that, you'll notice that, you know, at like a 2.5% comp, which is the midpoint of our range that we guided to, we are getting slight leverage. I think the. The bigger part of that is as we move forward, our expectations are that we should see greater leverage as we move forward into out years, and potentially at a 3% or lower comp as we start to leverage on those investments we've made over the years, like distribution, and corporate overhead in areas like that. I do think we have the ability, to lever at a, at a, you know, lower than a 3% comp or slightly lower than a 3% comp. Yeah. Thanks, Matt. Thanks, Matt. The next question is from Seth Sigman with Barclays. Please go ahead. Hey, everybody. Thanks for taking the question. Ken Bull, congrats to you. Hey, I just wanted to follow up on the composition of comps. You know, with transactions driving the comps now, it's obviously quite different than we're seeing with a lot of other retailers. Also interesting, given some of the inherent ticket drivers in your business. Can you just give us a little bit more context on what is driving transactions, and then perhaps what are some of the offsets to that? Thank you. Yeah, I think the two biggest ones for us is, you know, I mentioned in my prepared remarks everything we've done around data and analytics. We have a much better robust, you know, tokenization that we hadn't had in past years. We really utilize that for marketing, and that proved well to drive transactions. Secondly, the, you know, the new cohort that Matt was talking about. As we continue on these conversions, you know, we're immediately seeing a lift in sales, and it's primarily through transactions. Those are two areas that are really driving transactions, and it clearly came through in Q4 for us. Thanks, Seth. The next question is from John Heinbockel with Guggenheim. Please go ahead. Joel, two related questions. Number one, what would you say Michael's two or three priorities are, right, product-wise, for 2023? I know the tech world has been a pretty big drag for the last, I don't know, 12 to 15 months. What's your prognosis on that, right, in terms of what you can do to improve that or just maybe that category getting better naturally? Well, listen, Michael's got a couple priorities. One, it's really all been around, you know, our version of consumables. The focus on all the teams to, in some cases, you know, grow the space dedicated to consumables, improve the in-stock associated with consumables, has been area number one of his focus. The second one has been, you know, around Five Beyond. You know, we have learned a lot in our journey on Five Beyond, what types of items sell, what don't sell, what kind of quantities to buy, and et cetera, et cetera. That is an area where he's really leaned in to make a, you know, big difference on that. Then the third one is really just about the, you know, $1-$2, $1-$3 product. In this recessionary time, this time of high inflation, if we can continue to really focus on that low price point and deliver value, that's the third area. That's where he's focusing. Then the tech world, we're already starting to see it improve and some of it's, you know, probably lapping, you know, softness. But it has been an area that has been soft, as you just called out, John. I think you're gonna see in our refresh coming up here in a month, some new product, much more focus on trend and novelty. That's really starting to resonate well with the customer, and they brought in some new product that we haven't carried before. I think when you see the reset coming up here, you'll be surprised. As Michael always does, we, you know, we adapt when something's not doing so well. Thanks, John. The next question is from Chuck Grom with Gordon Haskett. Please go ahead. Hey, thanks. Congrats, Ken. Just a couple quick ones from me. You know, a year ago, you guys guided fiscal 2022 to an EPS range of, I think, $5.20-$5.70. You subsequently had to lower a couple times and eventually did the $4.69 that you're reporting today. I guess I'm curious if that history played any role in how you guys guided 2023. More near term, Ken, can you remind us why you're expecting 75 basis points of margin compression here in the Q1 on a, on a pretty healthy comp? Yep. You wanna take the first one? I mean, look, Chuck, it obviously weighed in. We wanted to keep the range wide. You know, I think on one hand, it does. We've been stuck at, you know, in the last four years averaging 150 new stores opening. It's a big jump now to 200. It's kinda signal or it should signal to you all that we can control that side of it. The other side of it, you know, it's not lost on us, there's still macro uncertainty out there. You know, we wanted to be prudent enough to, you know, really widen that lower end. I think in all cases, what the message we are trying to get to all of you is we have the negative comps behind us. Now it's back to growth, growth both in terms of new stores and growth in terms of the existing stores. That'll come via the conversions. It'll come through our merchants and what they do. The third area will be our marketing continues to get better. Ken? Yes. Chuck, on the deleverage in the operating margin for the Q1, it's about 70 basis points. It's primarily driven by increased marketing... If you recall, we really had dialed that back really throughout 2021 and even into the beginning of 2022. We really didn't see those increases until the back half of last year. We're up against that. That's the key driver of that deleveraging in Q1. All right. Thanks. The next question is from Scot Ciccarelli with Truist. Please go ahead. Hey, guys. Scot Ciccarelli. I guess I have a follow question on ticket burst transactions. Can you help square for us the rollout of Five Beyond, where you're obviously selling higher ticket items versus the decline in average ticket you experienced in Q4? Is that some sort of signal that maybe Five Beyond's not generating the traction, I guess, I would have expected at this point? No. I'm not sure I would expect that at all. We, you know, we continue to see ticket increase, what, about $0.10 a year or so? Yeah, on an overall basis. Yeah. Yeah. Yeah, go ahead. Yeah. Scot, Five Beyond is a small portion of that increase. There's other things that are driving that, obviously. You know, customer preference that we had some strategic price increases and things like that. I think on an overall basis, when you look inside ticket, we see the increases in AUR, but really if there's any reduction in ticket, it's coming from UPT, which I don't think is dissimilar from what you're probably hearing from other retailers. That's, you know, kind of the pressure that consumers are under now, given increasing prices, you know, tougher an environment for them. You see those tickets either staying the same on an overall basis or going down. If AUR is going up, you're seeing declines from UPT. We're pretty much similar to that over the last few quarters, and I think we've spoken about it, that we've seen with our customer. Yeah. As I said on the previous question, we wouldn't be accelerating our conversions into the Five Beyond prototype if we were seeing any concerns whatsoever. Yeah. Thanks, Scot. The next question is from Michael Lasser with UBS. Please go ahead. Good evening. Thanks a lot for taking my question. It's a two-parter on the guidance. Number one, given that you did 200 remodels last year, 400 models this year, and you're getting a mid-single digit comp lift from those remodels, so you'll have essentially touched somewhere between a third and a half of the chain, presumably giving you, call it, 150 to 200 basis points of comp contribution in 2023. Is it reasonable to think outside of that, you'd be comping, your guidance implies that you'll be comping more like maybe down 1% to 2%? My follow-up question in that regard is, if indeed you do have a negative comp, the macro proves to be more precarious than what you thought, how low can your comp be, and you still hit the low end of your EPS guidance for this year? Thank you very much. Yeah. On that first part of that, Michael, I think that I still wouldn't put a negative. I think it's more like to say we would have probably been closer to a low single digit comp guide, which is traditionally where we've always been. Maybe with the uncertainty, we would have went zero to three. I think your range of about 100 basis points, 150 might be a little high. I think that'd be if they're at the absolute high of the mid-single digits that we gave you before, but that wasn't contemplated in the guide. If you take 100 basis points for the for the conversions and traditional guide of low single digits, I think that's why you see us up more at four instead of, you know, one to three or zero to three. Yeah. Michael, the your question around relating EPS with the lowest comp, I mean, the guide that we provided that's where we feel, right? At a, at a 1 comp, that's where we'd land at the low end of the EPS. The one thing I'll add to what Joel mentioned, you know, at the low end, we're assuming some type of, you know, kind of intensifying difficult environment for the consumer. If that were to happen, there would probably be a negative impact on both stores and the results of conversions and existing stores. It could be a scenario where you do get lists, but just not as much as you expect based on the environment. You know, you never know where that's gonna land at the end of the day, but that's kinda where, or what we were thinking about when we provided that guidance. Thanks, Michael. The next question is from Edward Kelly with Wells Fargo. Please go ahead. Yeah. Hi, guys. Good afternoon. My question is on store growth. You know, Joel, you mentioned that, you know, getting back to sort of like the run rate that, you know, that you would sort of hope to. If I take a step back and look at store growth this year, it's probably about 15%, I guess. Can you just talk about the process changes that, you know, you're making? As we look forward, can you ramp the number of stores that you're opening, you know, such that you're looking at at least this level of square footage growth or more? Because I think at the investor day, you know, in the end, where you plan probably for, I think for better, for better growth there. Thank you. No, it's a great question, Ed. You know, it is about 15% growth. I think 2023 is the last of the years of like, you know, getting the engine back going. You saw it last year too. We were more heavily back-end weighted. So this year as we've gotten back to 200, you know, you go back to what we said at the investor day, you know, being more in the, you know, I think you said 500-600 in 2024 and 2025, that's still on track. You add the two years together, and we see no reason the number doesn't continue to go upward from here. Landlord delays are really starting to diminish. You know, supply chain issues are diminishing and it also... I mean, we haven't had any disruption in the retail industry for three years and, you know, there's been several announced bankruptcies. That's all a positive for us to start to get going again. That clearly wasn't there before. That was a big major hold up for us from that perspective. I feel really good about us getting back to that run rate again. I think, Ed The second half of that. You had a question around the process, the real estate. Oh, yeah. I mean, look, we've, the process, we streamlined it in several different ways to be able to execute more leases in a faster timeline, more per month. We're expanding the types of centers we're going into. I talked about that a little bit in my prepared remarks. You know, we've been so heavily weighted to suburban power centers. We've got many more urban in the mix, more rural. We're starting to do more grocery anchored centers. We opened some of our first outlet stores last year, and we'll continue to test new venues. Thanks, Ed. The next question is from Kate McShane with Goldman Sachs. Please go ahead. Hi. Thanks for taking our question. We wondered if you could maybe quantify some of the share gains you saw during the quarter, and if you think some of the closeouts you were able to take advantage of helped you during the quarter as well. Yeah, I mean, closeouts were good, but they weren't overly material to our overall performance. I think some of the stuff we did around trends was much more important. You know, I called out Squishmallows as an example. The Kylie and Kendall bags were phenomenal, did great. We are, though, optimistic or opportunistic on closeouts. Honestly, Kate, they weren't a big piece of penetration for the quarter from that perspective. I think our share gains more came from the conversions and marketing. Those really were where we saw the two biggest drivers for the quarter. Thanks, Kate. The next question is from David Bellinger with Roth MKM. Please go ahead. Hey, thanks for the question, and Ken, congrats. Can you guys talk about potentially the longer term opportunity you have within the collectibles category? We came across some in-store events around Pokémon trading cards over some weekends. Should we expect more of that? Could these events or further expansion in collectibles open Five Below up to some type of new set of customers, maybe an older set of customers with more spending power? Thank you. Yeah, look, it's a great question. Glad you guys noticed it. Means you're out in the stores. I always love that. You know, prior to the pandemic, we did a lot of events in our stores. The events just kind of disappeared for three years. At the end of the day, it's really about creating experiences. The collectibles creates a great experience in our stores. Kids were having fun trading them, just gathering. It's kind of back happening again. Ear piercing is another good one that's attracted. It skews surprisingly male, which we did not expect or when we, you know, originally, thought about that. I think it's because our store is such a safe zone for boys and girls. We've seen a lot of boys in there doing ear piercing. Any one of those is just another thing about celebrating the rituals and milestones of growing up and creating experiences. Collectibles have been a good one, and I think you'll continue to see more of those for sure. The next question is from Karen Short with Credit Suisse. Please go ahead. Hey, thanks very much, and congrats on a good quarter. Two questions just combined. Would you just be able to give a little bit of cadence on puts and takes on gross margin as we progress throughout the year? On CapEx, as a% of sales, is this with your guidance for 23, is that the kind of the rate, run rate to think about going forward? Thanks, Karen. In terms of You, you asked for, I believe, gross margin cadence as we go through on a year-over-year basis. Q1, don't really see any type of material move either way. It looks like relatively flat. It should continue to grow as we move through the year. Gross margin really driven by those lower freight costs that we're seeing versus last year, because if you remember, we did have high freight costs. The team's done a great job in terms of renegotiating, you know, newer contracts. You'll see growth in gross margin as we move through the year by quarter. CapEx as a percent to sales. You do see the growth year-over-year, you know, 23 versus 22. A lot of that's driven by the increase in the number of new stores, right? 50 more stores opening in 2023, also about 150 more conversions, which is driving that. I would expect that to be relatively similar as we move forward into out years. I mean, more to come on that, probably less in 2024 from a DC perspective. There's a little bit of that going on in 2023 as we expand Georgia, and Arizona. I think you could expect to see either consistent with what we're looking at in 2023 or maybe even a little bit less as a percent of sales as we move forward into 2024. Yeah, I'd expect it to tick down. Drop. Yeah. Yeah. Yep. All right. Hey, thanks, Karen. The next question is from Michael Montani with Evercore ISI. Please go ahead. Hey, thanks for taking the question. Just wanted to ask on, you know, marketing spend, if you could give some additional color where you see that coming in for the full year in terms of bits of headwind and then also, incentive comp, where was that in CY 2022 so we know kind of what you have to cycle. Lastly, if you could share any ocean freight, bits of tailwind, you know, based on current spot. Gotcha. Michael, on the marketing, on a full year basis, we're probably up, you know, you're talking. 10 base. ... 10, 15 basis points on an overall basis. Some shifts there in some of the quarters, but that's on an overall basis. From an incentive comp perspective, we mentioned that as we kinda move through some of these quarters and the way we book incentive comp and keeping in mind that last year, being 2022, was obviously a lower amount of incentive comp. This year is more normalized. That's probably about tens of basis points in SG&A of the leverage that we're up against on a full year basis. All right. Thank you. The next question is from Krisztina Katai with Deutsche Bank. Please go ahead. Hi, good afternoon. Thanks for taking the question. My congratulations as well to you, Ken. You talked about increased focus on data and analytics, and you are ramping back up marketing again. Can you just talk about leveraging the data to even adjust your marketing tactically if you have to? Just overall, how are you measuring the effectiveness, whether it is bringing you a new consumer or driving greater transactions with existing consumers? Yeah. Hey, great question. Krisztina, recall for everybody, last year was the first year we put tokenization in, so it's the first time we've actually been able to track at the customer level. Now with this year, we'll start to have year-over-year statistics on it. As far as the marketing goes, we're actually looking at both, can we bring in new customers and, can we get existing customers to not lapse or to, you know, purchase more frequently. I think it depends whether we're talking about a new store or we're talking about an existing store or we're talking about a converted store in terms of which tactic we're more after. We now have the data and this will be the first year we'll have year-over-year data on it, and so we'll only get smarter as we get through this year and then into the following year. Hopefully, that gives you some insight. Thanks, Krisztina. 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 thank you everybody for joining us this afternoon. Like I said at the beginning, we are really pleased with our results and are excited to get back to growing and get back to being a high growth retailer, playing offense like we always do, being nimble to trends and what's changing. You know what? We'll stay focused on value, and I look forward to seeing you all and speaking again after Memorial Day on our Q1 call. Thank you and have a great day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.