Five Below (FIVE) 2 Dec 202020 Q3 Earnings call transcript

Good day, and welcome to the Five Below Third Quarter 2020 Earnings Conference Call. [Operator Instructions]. I'd now like to turn the conference over to Christiane Pelz, VP of Investor Relations. Please go ahead.

Thank you, Cole. thanks XXXX us financial and Below's for everyone, quarter third results afternoon, for today joining Five Good conference call. are Bull, and call Officer; today's Joel and President On Chief and Ken Chief Treasurer. Officer Financial Anderson, Executive After the to open we call made management questions. their has remarks, will formal Act I need Harbor the within Reform comments Securities meaning the Safe that you of amended. made may the call Litigation and this to pursuant XXXX statements forward-looking to remind provisions Private constitute and certain as during of are made of statements are and such forward-looking differ actual subject Such and to from unknown uncertainties results both risks statements. materially cause known that could to Those risks the release and and in press our SEC are uncertainties filings. described undertake made The our date as update this any forward-looking today statements. the not of obligation are forward-looking to call, statements of do and we

do over Joel. not Relations the visiting release, fivebelow.com. I turn copy one of will Web at a Investor obtain may have site to today's now you call If press by page our of you the

everyone Thank quarter you, Christiane. And for joining earnings call. XXXX for third our us thanks

I results, to comments some general I the quarterly turn business. to make about want Before our

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have this shopping spent preparing big holiday for We for months season are the ahead. and days lie ready that

for confident to in are our customers affordable and unbelievable ability for shopping provide stuffers them. stocking to options and multiple and We gifts offer our

of direction and made with been season know will holiday uncertainty, impacts this to guidance or the great in not see, on wild ready the environment. we we providing Ken forward, the for again Due numbers how a deeper be investments might While, some what but QX. formal store don't safe pulled exactly are of COVID believe we have will products much we right has we give

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We will also not have holiday. this any paper circulars

to and safe like guitar operations time Our good and experience wireless our In buying improved earbuds, inventory we outstanding values. very continue and and fresh, relevant products team a tees, is we at customer important position. our models, snarky And a in during provide an new amazing, health safety this a year. of squish sourced believe to all stores, prioritize

about of self-checkout For self-checkout stores to our now have over our half we example, and converted capabilities. existing assisted stores XXX of

also started holiday. throughput COVID which All traffic. help the improved increasing As quarter capacity, to the experience our spread impacted register in customer began, significantly port this store these important by order hours especially fourth is we initiatives increasing and the

initiatives more selling we favorable for last we holiday I this the year, itself discussed, addition time December believe period on as allowing In our the call, holiday shopping. specific to company is just mentioned more

customers further. a three, of shopping. also in providing it for of safely Christmas. them for two, hybrid are earlier Specifically, new will days a spread to our holiday for help holiday more between December out and providing December, holiday And our trips, We're holiday this last Hanukkah shop than doing full stocking even environment ready earlier in assortment These at four, consolidated post and on schools wild was week store Christmas to letting traffic models. is are virtual two continuation four or number gifts is one, see potential minute in along and the number prices. customer Friday, and Thanksgiving shopping Saturday time stuffers out Number and help wait can't amazing with flexibility incredible year. Number super shopping. last there We're factors, more

have, we at always in discipline the flexibility, as agility our So of with we with and customers Five summary, Below great every continue forefront to manage and decision.

new strategies environment, operating to ensuring provide needs, more innovating the providing this to growth accelerating and value difficult. customers discipline gaming, business with is With on future details quickly like that the pivoting Five to the maintain it financials. Beyond relevance more our preferences. times adapting reflect matters the our focused Ken? remain assortment of on and our the meet successfully. are and will executing We We over We're evolving for to to remodeling our sections, even strategy turn customers, that, customer which for crucial merchandised opening extreme to are digital laser I stores when our Ken running

fourth everyone. I the third quarter. results quarter a of and remarks good my then our and begin review afternoon, with provide commentary Joel, some Thanks, around will

for stores preferences. As safe to Joel keeping to customers quarter, our customer the all adapting shop chain to teams reopened our and our respond evolving great of assortment said for our job a with did our third

million, quarter last Comparable our higher about reported million the sales up schedule. increased double-digit shopping pre-COVID year. sales patterns weekly comparable average XX.X% third year. delivering quarter Customer from stores third operated tickets for continued QX XX% Our were lower fewer XX.X%, a versus with last into in $XXX.X transactions the quarter third the sales stores operating increase. with We hours $XXX.X of for from our the than standard with QX XXXX and by

increase third results. they a represented single-digit still QX, strong quarter for to sales. yet a XXXX opened XXX opened ecom the at they XX our decreased new stores stores quarter improved transactions in of stores or with the the QX, XX net versus We last over comparable stores our end new quarter of XXX ended third quarter We third in compared stores, XX.X% the of While sales the QX were in total percentage of year. low XXXX.

We opening continue marketing. the with and to performance especially stores, new grand on operating pleased be the lower spend of given hours reduced

quarter unmitigated expense to partially $XXX.X on of to points third in to the quarter XX.X% increased cost benefit of the third million the and quarter. quarter year. this components profit approximately mix and Leverage gross gross tariff sales XXXX of fixed basis of year's XX.X% million increased by the costs XX.X% were profitability, last XX to third Turning last merchandise from XX.X% for $XXX.X to compared increased of the XXXX year lapping offset from third from year. SG&A last margin

decreased As rate drivers The XX.X% decline lower primary points basis costs hours approximately a the sales last store XXX year. percent XX.X% year. SG&A operating of SG&A from were leveraged and savings the from of versus last fixed to

operating to million million $XX.X third in the income of $XX.X third of for As almost quarter, doubled result, versus a income XXXX. quarter the operating

XXXX. effective of items of quarter XX.X%, impact CARES share third Our the of effective XXXX includes for rate benefits the to compared based of accounting. in the XX.X% related quarter rate to the Act tax discrete was third tax The and the

last third the in no ended decreased the was year's end doubled We store $XX.X This including the at cash, third versus million and and quarter million versus share we year. quarter results. $X.XX third of a when of benefit had approximately approximate accounting under $XXX an tariffs. the of at a quarter inventory of to our third XX% end Inventory with last income as of year. last quarter the the third line $XXX and as quarter cash of share year's nothing last accelerated quarter of year receipts million quarter cents, versus result base the benefit per outstanding $X.XX equivalents diluted credit. million, Average $XXX For earnings on compared $XXX third net basis third per debt, approximately million $X.XX a investments

We our continue season. inventory and the manage well inventory positioned levels to carefully for with holiday are

possibility providing Joel guidance customers that additional impact and as last to said store to due behavior shopping quarters, explicit continued COVID, the we of Now two not uncertainty COVID-related ahead, surrounding restrictions similar the looking the and are including operations. could

the We strong and to start are very Black with pleased Friday quarter weekend. a fourth the

it is underlying much to-date a However, the sales of hard pull of know trend. versus performance quarter forward holiday to how an reflects

ahead line season expect still of margin the have of biggest days selling some What the to, sight that Additionally, in we gross dynamics are us. of we our do QX.

year normalized As we gross in I versus QX last indicated more year. margins quarter, this last expected

that quarter continuing to also We expect higher experienced response pandemic-related level including of we a third now merchandise customer headwinds mix in products. in the preferences,

to As gross a result, in margins are range. expected be the XX% to XX%

mentioned through incentive also last QX that quarter last we versus headwinds We SG&A higher to compensation in primarily year. expect

back total, two result, approximately to year. to SG&A spend last with regards $XXX distribution reflects we in have now store in approximately business the openings we and unit the run the operator West XXXX. basis that With over the for questions. the deleverage financial and to safety to stores a mind, to and turn after and keeping respect centers, I November Texas And year shopping our core XX to As investments open of infrastructure. versus plan to points store gross we we great new provide the like third new Five excited our end ready our for and XX%. customers our we season, the we a capital up XXXX program, of operating to stores to and are lines systems while to their continue of Operator? and had for disciplines differentiated new year currently stores top would to holiday expect that, our allowances, which are with in growth In in of new the adding more remodels continuing in with during conclusion, With expect completed Below. the associates This quarter expenditures, investments plan call experience exclude tenant or and million a and that

Thank you.

from question will today We the question-and-answer our Matthew first begin JPMorgan. will with [Operator Instructions] Please Boss go come And now ahead. session.

stores down Beyond? basket have to of to you think initiatives as started How we then break you rank Five accelerate an I share And us this best vaccine, which maybe last market comps Could the clearly you're historical you about or what's models attribute customer since driver inflection. pretty way growth help the quarter acquisition much post exceeded Joel, reopened, inflection offense, performance, you that see? do from moving about the to and the consistently that is seeing? you this So, then talk think the to quarter new to opportunity

have a know, answer, or And credit you Thanks, It's as I a we loyalty question. in the vague little don't great might be program card. because Matt. a

hard we I what or I coloring, follow this with for. a to store trend, the done operating the examples. very the new pivoted a lot think added to sure And time, teams our especially broader out about on of they're customer does make amazing this the this when way really distancing, trend. this plastic. matched the closed But a way And And really in a We've we've experience trends. extended and in And gone of sure it's added for you looking we anytime to relevancy. make we've was store sense, like, our the safe. the we've to cleanings, as itself case, whether social always stores the our was specific. some were And value. fad, you've our our from I'll itself it's relevant time we from both And product that side, be give store merchants, and a Below you selfies, about think case, a well, in been trend So license. whether long it's -- adult got think is there's the it's or presents Five think think pandemic about I And spinner

safe And of a I team's you the about our done shirts the an making customer From so trend. think and style, job those product and just we're on feels those examples relevant. all been standpoint, style of And out sure sports. Matt, fantastic. amazing room like really stores. T amount called in doing And is they're They're the

took just One of Matt, that But that the the time. buying merchant about staying the group, a Miss day, that this relevant many all “I in favorites caused really stayed relevant. we different customer of wear Humans,” shift so in we massive departments, I example. a shirt and It's is end of trend And, it's at it is, the patterns. T my Totally big one advantage

As you I start of playing our at and mean, focus that. is Bugha the an to offense. Matt. always look forward, launched we're end of QX, constantly example on Bugha gaming

So And future. to host the a Street, impact pivot playing had thinking examples those investment are big gaming But share the example, it very go venues expected on our that give you a with nerd building think bigger have we just part that's little I QX about business, local forward. you on to I of in initiative, we're and QX in impact our could offense. how

is a main now, to truly we're which in it already and we new shopping right as stores, customers The So back our really where we're improve provides new destination. includes gift opening Beyond beyond Clearly, as see opportunity. section, coming and what the we're And us Five are starting holiday look, five experience. to do, continue the now prototype to everything.

for few change. flexible the the to eight just strength me don't as will worlds exact Matt be winded matters the it's to that are of more, through it's but pivot loyalty overall put model the continue answer Long or which but those Matt. since a and So we trends and Thanks, one hard the have just examples. program there,

ahead. Gutman will Simeon Please with question go next Morgan our come from And Stanley.

this Pardon Hey, everyone, short question. on it's Simeon. termism my

parts. So two

read The mentioned potential as right it regarding sure I fourth the I'm know the as But pickup supposed a pull if that's first quarter. don't strong we're if it. a the you've is way the third quarter. to interpret to from forward. not

sustainable. maybe that spoke the leverage talk to, yet and QX, So guiding but on it all regard it with And margins that you're more to to then, of I pointing I'm point follow I if curious you're about it Ken you not some is to would if sales. can if that that guess accelerated right,

just SG&A the I to wanted and point so And are on questions. line. Yes, that those the reconcile

Ken, to just on you I some want quarter? Can on SG&A? give start color the

again, a in for QX, the With thanks specifically around our repeat of expectations of earlier question. was that to a Simeon, were regards Yes, margins, most of kind what year. the

some see which of going normalized range. our gross the against those of We line, continue gross on up challenges margin was year last again, out to margin

range of I that wide would in XXXX. at it not that's we an of wide years level. that deleverage range but the saw of one we before, assume any that do had still there. you would So SG&A And said also, especially approximate ongoing results. sales we initially incentive those out then number, around additional and SG&A, prior also, compensation. we we've sales then, then still, the to what guidance, least reasons with And expect mix, And I a the when areas, results, in both provide but expect type you're in I of within some why to think specific And that fall kind the did just to put a seen deleverage would QX. merchandise right, of And at deleverage range similar did with look of I

I think good. that's

biggest talked days for quarter. and said, looking in I is gone coming of the especially start think bring a much pandemic, us I any guidance Simeon. really of its about, restrictions states? how how reason pull QX great to like a we front us. still QX further through volume the I forward home ahead the time the Simeon, forward results, start But pleased of very to is, there various first understanding Are and strong of with sales? it few COVID And since that Thanks, we've understand, in no off not got we for trying to

America. from come David Buckley go ahead. question will with of next our Please Bank And

it? issues that you. then, with store into of so, now you are If And Thank mix stores? just discuss running briefly you managing traffic? are items in you products any how the can capacity Are essential

Sure. answer is The short no.

On converted I store of a XXX the them assisted made specifically year, self-checkout. takes nine. typically I steps took to that throughput. that the our then from registers really capacity, stores helps the five out existing over the we this to think operators called And and And on

do So in we cases capacity where a instead having stuck and line line, store don't getting limits, we're of them quicker a the outside. therefore we in have through really people have to create

have So, front the a have job. constraint. But a have it. quarter-to-date, we part a we to are big not real about the customers meaningful good David still second ever experienced are process trying that? us. faster to David, capacity feel and than But, on anything days of great We're in operators doing

essential. around Yes,

business Look to of the a it's question. said relevant. our this the more lot essentials having driving product digit And are on us be to single I still about business. very think is low What's I Matt what

goods, to product, And buy And them. behavior people making importantly, so, of for, the we I were certainly pandemic a more buying talked what in fitness stock but sure great were looking they essential did caused about. merchants their on T-shirts job change to

And Citi question Lejuez Please from Paul Research. come next go our will with ahead.

be that curious, the your quarter? gross Can Joel, those maybe terms Thanks. of an of in assortment about range? selling five the more that your you, margin quantify item what guys. will what maybe the going What an the transactions can What's pieces ticket mix like? transactions you five can in above of, item above Just you drag the include for don't bucks? weaker. stronger average thanks, Hey, ultimately was? versus during vision include percentage what's of And look that forward and Curious percentage of those versus the business talk above the about terms talk what

prototype Beyond, start permanent about as and don't me QX, product. Paul. more we think our Yes, clarify the set it's small. of very we I We lot you something is 'XX was Five at but a fourth section talking spend But to we'll the it start. let overall a can just until Beyond And new wall obvious, for didn't, quarter vision time see, beyond. Five as look includes on Look,

it's part I offense, is us or asking more of into example big So we of concept year. it. just to the We'll about, continue and talking an was with of be Beyond evolve playing get this Matt was specifics to about Matt what going and next about will a Five

Paul, was And gross cost sold, of item in That leverage merch the mix, up -- that asked the just we about of was items leverage And in just unmitigated in talks I the margin were anniversary costs as we respond pretty by to meaningful, expect of occupancy. customers then, see the we've offset selling of the Joel in And an relevancy the just go We the merch response, how mix. again, tariff preferences. part the been and within sim QX, like areas too. It costs. And in other merchandise around and of significant goods fixed obviously merchandise, with those that margins, and those with mix. the school too then, work QX, to home. fixed just margins then, all those, items. so that at then, Yes. QX. also the you had play in we kind for about gross talk on mix what's And back and related sell did the And are then will pandemic costs associated driving meaningful they're the just they

Grom from ahead. Please Haskett. with our Charles go question come And will Gordon next

fewer comp to did you impressive hour. XX% drive with It's pretty the shopping

I'm also that then on So metric. just us could also, rethink November, if the curious, you out if I flexes on then, the where including where And on remind size where you the And margin made of test Thanks. you that kind guess us front, bit it's those of a are is And can you today. merchandise I color digital the the model term. Instacart, guess, and little basket baskets. BOPUS longer of in also, give the

Chuck, ecom and stores. kind less of really the get to ecom that. bit it's the Like But small, still our it's the very it's of all ultimately door, Look Instacart, is than basket test more like the period see XXX, XX need through about time initiatives, week. we The on BOPUS our bigger, early tends we in like expect basket new start holiday the the out to a brand kind the store. the just size to bigger hesitate basket on be I XXX get specifics just size than got I really was to to out. plays think literally new runs it. to It's it we're in And trend. in we on earlier so into expansion because a little be stores this this before fact, double. establish where We that, and

was there shop, it out more great very course. as And for new some because to homes to get and then, provide go, that start quarter is be forward. shopping how it's alternative a their a a and way way want we versus So vague just really Below. of of trend of little to great we those customers going sales Five quarter to in understand important, here to for safe to kind modern feel that But QX. especially much pull stuck we've through And, been the continue really far it turn are we as

operating hours think And I was –

be much it's go was now. right to we've But trend we don't we an I expect when we QX much we're think a in To see out hours. expand traffic opportunity I but we'll older, a the don't a long-term shorter pretty we will longer there here But make and clearly think that that operating right them be we spread from don't the have shorter Look, for long-term. to We're sure think mirror be customer. again, QX. like customers. have in open opened than I for been to seeing lot like

And our next John Please question ahead. will come with Heinbockel Guggenheim. from go

when season. that two Is holiday, times lot this of it have, Joel, Five looks items many in, think three kind as about of And year. know, flowing as items I questions. last fair? throughout it Beyond had maybe pretty were you similar then, like the the you for you don't

right spring have demand, thinking to and and out is kind of here, So product about number fresher how in that in, Michael then, how to two, terms product flow you'll want particularly year, next the Christmas, one. summer. closer and you and idea plan rotate of And

Matt, from our the offense turned the nicely of it we've I John, driven customers. buys, some seeing strategic And answered, question getting just buys, playing really buys. back is were offense. and very now one-time you And to we largely John, And, opportunistic the example merchandising the into we if broke feedback last of, Five what year, followed And you to wow, playing We it price defense, value. Below was out it really first incredible $X And switching I we've a been tariffs. Michael go think been the turned -- us. by opportunistic, and great team, about for is it specific an into is you're positive. plan, with

done. was But and And much about items pretty using a right of so continuing us out well. through, And being the one on flow. planned holiday scale and to goes on of season really example the out so our great to Last come as worked our that's you're advantage, in. new this it's you're right number see you're year items,

that we're we still bigger. in [indiscernible] planning it's together. for trend, the But past. John. seasons year, Thanks, going As follow get to And have the then next the

our Capital come RBC Scot ahead. with Please question go next Ciccarelli from Markets. will And

Hey, guys, Scot Ciccarelli.

inventories And any quite inventory guys kind basis. that concerns at the of months all of here? you have think through the you vendors, drag results? -- it during quarter store So couple a better let's call your inventory you to in the still next as were obviously you talk levels, third availability a got your quarter, per on bit time but a down Do

drag, the If comp, they that a Yes. comp know XX.X something it, a that XX.X were inventory. I'd call ever due would be to drag don't I

of we Scot, team They orders of inventory. more hundreds look, of year, back placed. of the my dollars you if seriously, remarks, canceled through closure the the Below. everybody proud went to Five did, go be couldn't of you got back to I at in But Now, opening first the millions half got remember, like the

we and back we ordered in fact, items more we And buy place initially. relevant were had stock. what In

the and it chasing is onto floor. and while right coming it's our we're stores flowing, DCs right and from onto And so, the it

to Ken, it think don't add? I mouth. So quarter to hand inventory impacted all, And anything certainly was at but the

just that, Yes. add And Scot, I'll to too.

remarks. You the prepared as last some at QX, And average was of end look year-over-year door inventory tariff similar of at into that last forward made forward year The our related I in also. -- we heard year of driver of probably real moves the pull the end items. QX

to negative But be the when end that So and the forward to driver it would key to I year. really we continue of expect was of fast that the ratio. down

is shape. in Scott. Inventory good Thanks, a

Short our from will go ahead. And Barclays. Karen Please next come with question

housekeeping had thanks of and Hi, picture. a a couple bigger then just I very much.

of is, you talk markup? to Instacart, have wondering co-anchors And you question XX% the today of with then, stands your with the all, respect you've estate about the relationship landscape? given in real to respect right where changes with many always with how retail the stores forward pricing can and Five about traffic. just how actually picture infrastructure your First I'm that bigger now? the drive do going And then, you're said that, Beyond second, thinking

exact Ken, number know Karen. on stores? Five you if Thanks, the Yes. Beyond

stores, XXX about yes. It's

line every on started. important that Instacart their And pricing grow. we pay fee job works and if the clearly, team a again, fee And else we Karen, And, got out more has reasonable what a to then is is And if know And, co-anchors, and we to member, done. our finance haven't $XX, I ever. a to its everyone paying. sheet, awareness, is anything, centers everybody brand pandemic since our in than a statistics connection of spend But order vibrant we've great called on the to continues the in landlords terms that's similar strip balance measured over strong with that platform, Instacart. customer they no other to retailer, like them. charge every there's is else

mall-based. change anchors in that's And, you being traffic, is, committed we're not. drive but more in we're tell more and new bills. I can't something youthful as what won't out be next than love or that ever stores. love look so, not Thanks, And pay we whether discerning to I But a traffic, we'll and great traffic But at place continue to all just we changed Landlords to Karen. we our have us, year. young we'll we're think to we committed certainly And drive and build the A before. and centers, drive strip we power, more mix has

our Brian next ahead. come question Nagel will Oppenheimer. And with from Please go

quarter. Great

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question answers and that hopefully think your Thanks, about. Brian. So we how

with question And our from Research. Please come next David will Wolfe go Bellinger ahead.

the others So trends, you upwards or quarter category negative. volatility turning last of some XX% mentioned in some of were comps

start seen sales in QX that have So worlds strength sort seeing some and did same the this QX quarter the in throughout of you the disparity complexion but also the wide in you out type you you see change or three trends. even called to out in period of

about expect last question. continue and And great QX continued the in into a we disparity I to quarter it talked it's David, that into QX.

of trending. this why, I is that's powerful depending And and these not I mean, don't how on about, Is that trending out, it as these photo and you clearly store, plants and and is It area. and we worlds negative bad tees is, we eight party shrunk other worlds. are model some thing. Michael a if that that we've understand I mean merchants party home, know look at But really our trending, type our what's area, talked we've of, is our blankets don't trending, if people are that's It's pillows just fact, only trending. flex enough thing? room party nesting does what's our comping. important your if right a simply that and our really gaming in world, now job -- In change at business. are of we're grown that's growing in people not is around and Well, great that

Thanks, it David. expect continue was in QX, here. to QX it's So as that and wide in we as

Bank. Deutsche go with Trussell Paul from Please come will question ahead. next our And

and afternoon Good quarter. great

the year-over-year about real about give store some year. openings happening in And a just be estate spend, you curious how of then, year's just and should earlier, from any, on just thinking class on way that quarter, color lastly, market? up new to you've walking a more circulars. And next you or open seen bit we maybe follow the from what basis. you're a from little extent touch that did that commentary estate more real on a this digital to permanently stores. doors And on Just color, availability just on looks did number thinking What's of early this into maybe away color

of finding pandemic opening Look, to we invite us campaigns, we shocking the used run our enjoy to performing. much the crowd. Las to Yes. to the a sense be rate And some you, class is I generate as growing. we the day, And honestly without another -- Thanks, great grand how I I get opened. take in think you put couldn't opened commentary California, brand more I'll personally was happening example pleased seven When had really awareness immediately doesn't at sooner. -- And We've what Denver people it these to shorter I color it, with done it Vegas. what if We're is hours, no us in a that, of Paul. consider tell customers five in Sacramento. it of in around was to XXXX Northern is just see great like, new make a end years we is market. in

less still and -- shifting. change from of year-over-year, example about So less and and the digital new despite it's on us spend, seeing we so. And and are about it's great productivity being the more a stores shorter marketing, a great relevant it's hours store just then,

habits. compare if year, the we eyeballs are we and being of Everybody's example back advertising where digital. binge quick you quite in and not fast are nimble, as customers Netflix XX% another simply, to paper. stores TV personal getting so, we and expect us pivoting And -- over and our are, significantly it's of just the Even dollars. year but of and the this where great to print grew put own last shared, right eyeballs about shrunk I like to markets, how customer us our that's don't Think us is go watching circulars. the I And our into now amount

get still use We feel spending different the vehicles it. advertising. to amount better we're Thanks, money So there. of in a good in about just It's Paul.

And will our with go Please next Wells ahead. question Fargo. Edward come Kelly from

did we you in QX think number about is, 'XX, Obviously, great to into up, did it. normally out you you then, numbers year? getting [XXa] would in this give that I follow the of I a to you QX? quarter. heard a don't And the question but you margin EBIT real I for [ph], are anything and type would look 'XX prevent rates guidance did ask you on Is below from tax next just have you that there as think wanted for consensus don't is you hard because back even do. XX Right even. year what next

Ed. Thanks, Yes.

you the quarter And is to obviously, tax regards with there. there, fluctuation second then, we'd And margin, the end we'll year, EBIT like try holiday the and at On the season. that part some rates, there then, that And guidance through through get our year give to of as of questions, Yes, see get this past. to can with again, the around in what seen your taxes. the normalized out and talk NOL called of more called the the things expect accounting that. based out, this be just like and we've and share earlier in to and we and past Act about top you and of would QX, around XXXX. carrybacks But in in off impact much terms then we would CARES the expect the we of what what year,

would what seen expect probably would for I be in So of more historically. at QX, normalized terms we've it this point

you range for So on year. the that around in then, for that And math could QX. full XX% do the probably and

nothing from there's Ken, expect out, looking to that model think I more yes, would normalized. change But our

we levels that back saw to Yes, to get those historically, yes.

with will Capital Jeremy Group. go Hamblin Please And from our next question ahead. come Craig-Hallum

these the Fantastic. just think through store. store in actually, model to, tariffs. mess the just But strong as hours you get incoming on might I think Congrats first on response other COVID So forward? there. any hours. consider moving forward, administration know, my of clarification operating I you to And COVID question to that having want is it there the the of kind we wanted and originate change don't has regarding get as China? initially question Chuck's tariffs plan your the going future made about But clarify possible China. operating some is results to or You've removed, of prices, back And comments of, the what benefit, or that back to the earnings world, if sense from your goods any that of the going raised goods the obviously, consumer? lowered are expect you to to power, consumer? savings I to on is percent potential in tech a especially. the wanted I today would But they is tariffs any give

it's this and tell comments on on it too. you, the a Jeremy, And, that I think it's I we the you But this of our putting $X found morning, have away, Beyond good speculate Five And went would think I year, not said we we've tariffs, us last little And for prices look, will question Yes, tariffs. we to way roll have they means. heard is tariff when were that thing. actually what early back? we beyond in more if we broken price I the the development something think only point;

from allow And do to plate, and stuffer our But the value. continue it it to it's value deliver customer stocking being is In you the if always I customer. there by tariffs the window to we'll and center what of think going to gift, reaction to will, instead fact, I the rollback, migrate with loves nothing more with of deal some, is call to the but, mean us appropriately. the So the right? tariffs has if main to be first

in important so back, product. most give do. he But Michael So also, can we reinvest thing we

of about back. relevant as is so adding value. new about we're And that prices deliver as and it's things operating from, So real, features I stay and the benefits we think more hours. continue for less incredible can working future I it's think Look, our I to And think vaccine a 'XX, rolling -- for assumptions shorter hours, certainly that And, that a if Thanks, holiday But will pattern be good. by operating slowly we'd until we're change in dispersed there's think for holiday that's back time post-holiday the Jeremy. normalized on do that. in I hours. more widely 'XX period at we'll

And with Michael our Please next open. question line Lasser, is will your come from ahead. Lasser UBS. Michael go

next the one. we'll guess I to go

next question will Michael our Please Montani And ISI. ahead. Evercore from go with come

And on up I to you of if transaction just ask COVID off that's to meaning of, wanted quarter. double the a give I and wage last digits getting starting on to kind if sense count, flat follow first then, closer still could stabilize, to a costs similar inflation. or had

Yes.

for I'll on one first account. take transaction up thanks Michael, So question. the the

although still here still the seen the that to during as say sales prepared improve You remarks transaction perspective have still from have we flat. But seen probably did as go the But quarter, QX slight again, close a And with improvement through to some negative from to the we comps, holiday transactions, the saw obviously, the all we have way we've season. we've sometimes and as into we we go, year comp heard to what QX. although improvement the QX worked through getting negative in us in ways improvement moved versus QX. fourth

Okay, wage think moving just it off, you that had on you are on talking multiple number front, COVID that. persist? terms number get wanted in And to about quarter, does then, that you've of was, inflation? two, share out to if great. And to just what bring during that you offset the And then, efficiencies kind if I the cost inflation and that, the of, of ability experiencing one, maybe front, competitors continued I kind missed a just secondly today first of on sense incurred guess, wage the could then, to about there's And forward? how anything costs

lot lot a got there. Michael, in a of And questions Yes, the queue. we

take a move next But just have to COVID and to costs long the the take we're COVID spend costs. we're through time me future the we wage Let on managing to that and look, one, would one, going time. can

to of you through them think it continue gross I we quarters. the to… can the out moderate to but continue see some as move called impacts to we would on expect And, margin,

Yes.

some going seeing some we those materially but what than back saw less and QX we still QX. So of and obviously, QX, in saw, definitely to

ahead. will And our Zolidis come question Capital. John from go Vadis with next Quo Please

Difficulty] either the And so, what long-term positively, [Technical if negatively? model simply, Very are subscribing earnings subsidiaries the or outlet? biggest Thanks.

Hey, were you John, to But asking the changed were I has you if hear. pandemic our… think hard

model. earnings Long-term

reacted supported Look, I seen goods with how us a they've of do say, And Michael team and pivot throughout of we community. partnership trend. like goods, into And got assortment. pivot. relevant whole we've trend we the that pandemic a the we way years thing. really probably the big since this with everything, as this to us could, out group And core, stay new get ago, great did Spinners, think they a our merchant we biggest and we required few to just as in do offense certain its we is, merchandising really supplier and I've fast of like approached the And at this here is we been new it we play

John pivot And we how business a even anything it's if more finance experience really really the those I at us grow certainly think one forward, the So efficiently. us allowed led at look also to can things expense. could carry operate forced every helped and make we look than realize It teams, we group, will quicker. as are all to -- to before. And continue this by us, better that

us So, Thanks, whole. it's better company as John. made a a

for to session. would the remarks. closing the to concludes this over conference any Joel back question-and-answer And turn like Anderson I

with our to be joining amazing thank there thank Five want And such Thank And And us. this truly Wild letting Crew for there all vendors an to work honestly, for Clearly Below. for great our customers us being a for operator. our you, you was blessed today. for them. Again, everyone us I'm quarter for team. for and

right make special. to want believe products We we which value, awesome will need what the to at our trend continue is amazing to just listen and holiday source and customers they

loved safe season. and the your you get for ones As ready you we healthy holidays, wish happy and holiday a

you'll I holiday, Five Below find value your evening. for a again speaking And all hope you shop we'll this you'll in and certainly 'XX of some with you. amazing Thank just families. Before Thanks Have see you XXXX, in great again.

concluded. for now is conference today's presentation. Thank attending The you

this You disconnect may time. at now your lines