Five Below (FIVE) 29 Nov 232024 Q3 Earnings call transcript

Good day, and welcome to the Five Below Third Quarter 2023 Earnings Conference Call. [Operator Instructions]. 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.

Gary. Thanks, and XXXX us Financial everyone, Below's for for Quarter Third Results thanks afternoon, today joining Five Good Conference Call. are Chipman, and call Officer; today's Joel and President On Chief and Kristy Chief Treasurer. Officer Financial Anderson, Executive After the to open we call made management questions. their has remarks, will formal Please limit enable question one us in everyone accommodate yourselves queue. to the to to

safe made the are during to harbor statements. of release meaning uncertainties such constitute forward-looking may results I remind need filings. SEC statements call the forward-looking Private Such the you and to of risks XXXX cause differ within and provisions unknown to known Those that and risks amended. pursuant our are Securities this that actual press of Act and certain could the comments made subject Reform to in statements both Litigation and from and uncertainties materially and described are as

as We forward-looking any date made The the of of statements statements. to call. this obligation today forward-looking undertake not update are do our

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

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

first our with and We quarters comparable We in of the sales exceeded performance were are third two very Five earnings and results pleased consistent quarter. comps the sales, our financial Below's operational the with and execution year. guidance remarkably on

now XX% comparable stores. The new We customers our drove Beyond Beyond also opened base. successfully format format, new continuing to convert stores a XX Five store accounts to of the while record new approximately stores to the for Five which

the optimizing made preparations finalized holiday. we progress inventory and addition, In on for

positive by the million a driven quarter. specific quarter comp for proxy experience. continued Now Comp demonstrates this transactions. $XXX our extreme increase comp the traffic fourth approximately of growth delivered our We transactions, We over on to relevancy shopping of This increased represented X.X% sales be which and fun XX% are transactions. X%. of which to believe for third our consecutive increase, sales the to and value results

for third $X.XX, $X.XX high quarters through third guidance. the at per Many trends above continued quarter assured the came seen we've quarter, of earnings our of throughout our several Diluted share we end and reflected assortment the the them. in

As continue to our beauty customers we the prior and which we on our us in world offering have focused in needs-based with you shared primarily is candy quarters, in for seen product, consumables department. see

games as is In in strongly addition, discretionary reflected value customer category seasonal our resonating with strength and our focus our unwavering with on offering in and Halloween. toys

well anime each. against performed popular Five provide Kitty, Below's Squish, long-term and made I'll were we business more a on and quick returned sales still update level. strategic consider double that the the challenging triple to a Collectibles backdrop, In also key five what very a would most vision. Hello license progress pillars normalized and support

growth. The the we our quarter, first states. across pillar record In opened XX long-term the stores of store is driver expansion, a XX new third

our achieve made openings store complete grand We track week. Wisconsin of on top remain the next Alaska, opening on openings to to new XX XXX these over of One expect and opening fall stores goal list.

of estate stores. new XXXX also built XXXX Our strong teams a real have started on pipeline have working stores and for

second will the cadence half year. also in meaningful opening year, towards returning our progress the been we half to Thanksgiving. store result This openings progress have store where of are majority secure the towards historical making XX-XX leases store first able of cadence we a by the complete opening we As for to in earlier versus

more stores response We potential. converted and have into with March Five been of format. very prototype XXXX and of first second their conversion pillar, have the customer they're comp a customers pleased stores positive the customers. are driving comp. they're post are conversion Beyond the of a in driving outperformance stores new traffic, store this second They post year delivering mid-single-digit to that retaining and the year Moving announced entered the These in performance current the are attracting and the new small subset

As end stores earlier, will was XX% next and the store this at year. format, of in to comp quarter, third of I convert the said the we approximately base continue

time, the grow a products, will line to evolve sales. of Beyond these assortment and large conversions, see opportunity the we which benefit the also Beyond top Five product penetration over

pillar is third brand The and product strategy.

is As are and and we you success. key product what do delivering our who we know, to is WOW

of new value adjust change. at down hunt have They worlds. merchants disruptive our extreme ample product as trends flexibility Our X to with the opportunity

our QX, grew huge new assortment, and in incredible costumes, and the to Halloween front face core example, sourcing yard For up merchants for inflatables the masks. light including

growing. though assortment Our have this life channels. social is We brought customers love the we new YouTube. fun, Five The brand a as Five and Instagram TikTok, on value social believe the to big opportunity on remains awareness. focus for to products brand Facebook, media Below through Below's presence we and established our media go-to increase

thus investments analytics integrating data and The made far with are delivering. in have digital we marketing

positive are We with in both we've customer pleased the acquisition seen retention. trends and

meaningful area to is profits. made order optimization sales inventory we pillar, maximize in drive fourth another progress where and The have

leading as mentioned before, is Ken COO. pillar I is As this a

leveraging Our focused are sophisticated by improving and inventory on productivity technology more processes, analytics. teams

methods optimize movement will and demand of developing further the improve ability chain. inventory supply predict track are our to the levels that through product We

the season. a the As team's going holiday we under this of are with positioned efforts result well into levels pillar, inventory all-important

extra stores, focuses to The Over their in ensure and our on ship and of XX,XXX and the smooth centers, primary weeks. ship takes is aggressive the fifth teams a for our these talent achieving the shopping working the the year, mile our experience the for the each training I centers of a and the effort, time associates to to lot thank will and onboarding focus integrating critical in customers and recruiting on peak growth. seasonal At that seasonal stores of holidays. workers great the seasonal pipeline is for crew our going time this be hiring selling in store crew associates innovation pillar, of want

are accomplishments. with our quarter summary, In operational very we and results pleased third financial

we a in As past, in store fourth the turned quarters wants quarter. X, needs I've the from store in mentioned X a through into

place office Our customers kids the that an her for grandchildren find buy whether gift at nephews and to are or incredible their need their we to coworkers value. gifts, perfect or awesome nieces, even

sourced outstanding in our have at and products trend-right merchants values. Our line, amazing fresh

plush holiday from Tees, lounge, will and action blankets, more. our customers ranging our and assortment figures We holiday believe love Marvel pants and warm fuzzy

weeks over ahead holiday we and to our biggest financials the Kristy review outlook the that, of With more While turn it start with are the are I'll in detail. to to quarter. still our us, really pleased fourth

of and remarks Thanks, Joel, a quarter begin for will review provide everyone. our and third and results my with the year. good guidance fourth quarter then afternoon, I the full

pleased that Joel to report results As our are guidance. said, exceeded we

ticket was seen for increase we by decrease ticket in for with similar offset by of driven of the quarters by an million, in a the per to unit XXXX the to from X.X%, in several $XXX.X Comparable transaction quarter X.X%, now. decrease transaction, of increased comp This have third average price, comp Our partially of increased comp third by partially lower increase $XXX sales XXXX. a offset XX.X% units retail sales X.X%. quarter million what reported

We in states XX year. opened the XX opened in new third last to stores quarter third new across XX compared quarter stores the

X,XXX X,XXX quarter the new with growth quarter XXXX. continue locations. We stores, an at stores ended of We of of to productivity XX% the end be versus stores the or approximately XXX the pleased our increase of with third of

stores the driven our call. quarter versus XXXX. well million approximately August the Gross XXXX primarily up XXX margin shrink reserves by decreased quarter inventories true-up for points XX.X% was during recording of chain, their anticipated. shared full was third Gross to physical in This actual profit quarter's which for $XXX.X as as recording we the third million basis shrink last that completed to in of earnings decline results of the as the $XXX.X for X.X% by

for finished expenses. the versus of of quarter at spend the decreased XX third and in quarter in sales, $XX.X year's As of decrease leverage third points a of a points basis operating certain the versus timing percentage last quarter, marketing SG&A income by primarily to to XX.X% X.X%. approximately XXXX million third $XX.X XXXX, margin Operating basis XXX million in resulting on store-related approximately of driven

$X.X interest rates income Net benefited quarter larger compared was average a million year. versus the cash and interest last of higher in balance $X.X as million XXXX third from as we to

million last of was third versus the was third Our of quarter quarter million effective Net the XX.X% tax third XXXX to of XXXX. XX.X% in net income $XX.X compared for $XX.X quarter for the income rate of year. XXXX

diluted share quarter compared earnings last diluted $X.XX. of per to $X.XX year's the for Earnings third share per was

$XXX.XX, a total shares $XX During the approximately repurchased of for we of at approximately million. quarter, average XXX,XXX an price

We third X.X% outstanding to with last end the as year-on-year. average ended the and equivalents the million including third quarter cash, our basis, quarter million was $XXX $XXX cash nothing Inventory end and year. On on at in debt, of no $XXX million of decreased an quarter of line investments the credit. the $XXX inventory third million compared per-store at

earlier As inventory year, strong to in-stock ordered last we ensure position. strategically

the going We our season. of holiday and quality level with inventory are this pleased into

the remarks XX-week on full full the unless year otherwise for guidance noted. to to year year. guidance on Now and refer fourth will My quarter

Our future any share potential guidance not impact from repurchases. accounting or does include share-based

to we As results our pleased start are the November with and quarter. Joel mentioned, fourth

an to XX.X% range the sales between XX to fourth are as quarter of are track already sales the be the the of have XX And open quarter X%. in XX.X%. net of and on expected increase of billion, November. to anticipated to For over increase Comp before $X.XX in end opened stores are quarter we X% billion XXXX, the for $X.XX to

to as year. shrink benefits of the XX.X% an partially place certain in approximate management XX.X% the midpoint to quarter the of well at lapping and last margin points leverage expect put as The XX we the lower from due We benefits, freight operating in strategies XXXX. offset is basis headwind incentive cost of by anticipated fourth comp

to to it on help you forecasted, expected we will approximately the are throughout rate we working As the update relates progress effective organization anticipated these to initiatives many shrink, at and tax be efforts the estimated of XX%. we is The increase on year-end. have mitigate

be million, expected income the growth to of over $XXX $XXX XX.X% XXXX. representing to range Net XX.X% rate of a approximately to is million in

XXXX for XXXX, quarter per earnings is the $X.XX in the quarter per diluted with Diluted fiscal fiscal in the quarter to fourth contributing expected the approximately share share of $X.XX share be repurchases in to fourth third versus earnings $X.XX $X.XX. of

high end our are of we the million are end For low the representing sales $XX expected XXXX, CAGR growth and are range total increasing Comp the at of the XX.X% to by full of fiscal billion year increase sales which implies XX%. of a increase sales reiterating $X.XX billion, period XXXX. rate the $X.XX approximately compound on in sales a or for to X-year X.X% sales expected annual expected XX.X% since to

are midpoint the XX.X% tax expecting margin compared rate the at The still year XXXX. is approximately XX.X% effective to of with XX.X%. for We be operating in expected

implying to a to basis, expected Net diluted is to be to $X.XX a be range $X.XX, million to share the for growth are XX.X% in XX.X%. year-over-year On earnings share Diluted be of of XX.X%. growth representing $XXX million, rate income growth XX.X% the to implied XX.X% is of per to in earnings comparative expected XX-week XX.X% over to XXXX. of approximately per $XXX range

share fully the year XX.X benefit we count full is shares in share in lower as million $X.XX related result year. completed for September. shares for reflecting share third estimate repurchased repurchases Our The a the quarter the approximately is of count the to diluted a the

This to CapEx, of and total gross $XXX Georgia technology. and store new to impact in stores, we over converting the expansions centers CapEx, in to to XXX in the our With spend allowances. opening excluding plan distribution of locations commencing XXX reflects approximately respect Five million investing Beyond over the Arizona in still tenant format

new we the relevancy demonstrating the environment, and continue and macro pleased are while both we with In we holiday see growth In our of us, strategy. better-than-expected line and we X/X with this shopping returning uncertain the is fourth new store third quarter. a expectations, and to performance strong beginning season of summary, of customers over our have ahead brand continued from Triple-Double in transaction of the quarter, delivered

we us. disciplined fuel remain in capital will and to while We balance in of front of sheet continue deployment use the expenses that the is our strong growth in to managing

release. and session. our with like to And earnings guidance, For to back all other question-and-answer over press the the results for please to the our Operator? refer related operator turn to that, details I would call

[Operator comes Michael Lasser with from UBS. Instructions] first today Our question

the and about you've what Given next know business into seen that recently puts the heading you other in takes and year.

were in margin produce, expansion If even reach you the you especially each XX% goal few if low mid-single-digit you margin to that next margin a strategy were of Triple basis operating long achieve of did XXX to this year similar term, XXXX in by to to that type it comp level of where a operating year, out range, years. push could light a the in the at expansion would necessitate you over points Five year the Below for what Double the

probably it's really early question, for to too great Michael, foreshadow that you. but

are shrink, obviously We've last and inventories those but -- call the in efforts Given think do at rate, reserved we have higher all the everything to physical mitigation on with we working. January. shared around our you we now

challenge We base we continue all leverage call do the base And in in we till as say think XXXX an we give should if in or it's it's safe will time, March, a going in And this those to answer at the forward. now are about think can that at believe question annual I believe level. you point X% great the this to our again to the of years just on be basis. us you

is Barclays. with next question from The Sigman Seth

enter you're I might elaborate I it's you those that year any the other realize through are making as but format. chain? select you number on you just that of early, the learnings wanted performance to a two? just color be Beyond the you the of stores, seeing And as rest focus on Five work or Can how modifications on any performing?

it two size, and of my is wave as signals QX remarks, -- small but is groups that they're that year into sample and Yes. positive. I first that popped Look, of prepared said in comping all a the

give got the that comping two, And to chunk with would back so and to not they stands get of chain would is seeing year or QX big we'll a that anything the of indicate in one year to are of here, two. But as have plus right obviously year more be conversion seem they what any in the have it of line we now, gains comping. in need another we entering quarter we'll second those stores

did So come up in early have about want certainly, are to reads XXXX good really on you more of but to And two base give on it. some really feel we but that that that, we'll it. set stores as year mark, good we a

The Edward next question Wells with from Fargo. Kelly is

Beyond. follow-up, a Five Joel, Just on

or think go-forward base we anyway store about the half Beyond. As comp the half and the in Five base

year comp then Five of benefit us, roll like the also help in in, penetration I continues of guess, increased So could that I time the is helping And is that mean if that 'XX? comp continuing over understand drive Five that the And in to any you help of to going that know incremental? mentioned in thoughts you don't forward. just around at then Beyond terms what X business? or Beyond mentioned

Yes. it's a Look, Ed, question. great

Beyond do our stores stores comped and it's too sit us and to that here early for kind like digits out and think a our is comp math to comp. on easy Five foreshadow X.X% I non-Five -- the QX you. XXXX flat, blended we Obviously, on Beyond to mid-single of for relatively XXXX

that be comps And we're a early As we that -- positive together me seeing what it conversion look should increases, be negative to the then we into comp, too. of is into on positive XXXX. as put tailwind all just see quantify and think you're the XXXX. don't you. a year. for too It's But to I asking as a a year not should next two, come stores to that penetration that for to XXXX out But we headwinds any fact

is from Matthew next JPMorgan. with The question Boss

quarter. Congrats nice on another

quarter on comps the to to store elaborate trends? did speak progressed? on cohorts on maybe So third of then sales, months you category? could of or Ken. just holiday guide same-store the you maybe progression for X one performance latest new by upside early elaborate you And relative third from quarter ago, see the as your some where stores? And Kristy Maybe of Could Joel,

that's with grow, and clearly, Yes. quarter I certainly biggest area some Thanks, Halloween, Matt. seasonal don't and have? that calling got And have great out we as Kristy, the did look, my I you progressed, remarks, tell said the and games you Michael really prepared specifically areas on toys, to done started in job the of know, and guidance was And we've strengths as an saw stronger. that. exceeding his us would team business a and

Matt, new the performance, XX. QX QX pretty the And for was well productivity. and store with mid-XX% you'll which coming range the with X, On in that is in mid-XXs Yes. line low midpoint, in as store new were to consistent find close QX at to

The next Securities. Guggenheim question Heinbockel is with from John

So Beyond, sort combat I stores the you the the pull when right? think What $X You And has right comp. items out good Joel, do is below price think a you really Michael and is always Five point. what find product of can items. opportunity? it you do $X challenged Where flat that know new low to Is innovation? dollar merchants that single-digit the comp? referenced

Are in store, talking about John? Yes. you the conversion

saying, right? single overall, price Should probably beyond no? right? digits just point, comp Stores I'm low $X No, the or

that. toys. to called in I largely out QX. business Below Five we And see absolutely. And No, That a was Yes. continue

And been we're business. not that getting think Beyond, Below almost box the the on strong. the of I from it all business we've candy box really Five more getting from getting pleased the with and we're transactions. thing we're Five stores, comp it from most Our form in has been conversion That's XXX% the

long. And our of Five the there's think the business. for our continue to number mid-single-digit businesses opportunity a to so really penetration for X in look, a And have driving so in And the are day we I'll meantime, grow. take of stores footsteps I Beyond But it's to Beyond kind still all below upside that. Five lot the

in Below, you all took which and as QX, the the there. seasonal any the stores, probably of got That I holiday. as Five year. is ever whole the value there in us. out as strong this wall Michael a merchants, off And for been wall think get message statement this We've seasonal a Five We Beyond for the is change $X in we've

So we've at really Five that's screened all it Below. value, and driving

Gutman next Morgan The from with Stanley. question Simeon is

Joel, to stores too Are doing trip trending that it's Beyond are quick just mid-single, and those Five John's up or question. units traffic? per those all the a follow-up the in are

answered And then going stab you the real to shrink. question the and question is I'm 'XX, the earlier, paraphrase you another mentioned way at

If or Are the we guide a that you that to think to out do X shrink there bad about? the to center, could little distribution SG&A you or maybe takes? P&L. X good something bit comp a laid any on puts better, algo ones, be a is are and what investments, And anything other should

on negative. that Simeon, per Look, Yes. is units -- real we trip, the quick still

with of to and sign I bit is conversion, going on on all for the ready what pre-COVID. And going the and next year, more mix providing that year. seeing unless just that that year the a pretty compared with XXXX basket focused one punt very and expect than transactions, give and continue very trips, expect is on well in general, help And we proxy more don't we've much are I'm they're it. the all We was for not then Simeon, takes we're a it We in would headwinds XXXX. think of are more and mean normal the being not something little better for up the make shrink -- to QX everything lot because not puts But be a ready I part changes on where we our healthy next in if it to to we customer And We'll macro-wise. COVID welcome here into a that for buying. more expect increased guidance leverage. to that continuation that's that's to still got total of But that. should just discerning year. next our that terms COVID, I traffic see

question The Paul Citi. from next with is Lejuez

think the you it to are as the out headwind where wasn't for what the it in half, to areas Curious we maybe second, input as year? I'm year, just plan, just last you it to a a first product first this according the costs, improve And you gross for holiday, seeing half, then that what is opportunity maybe have something executed this perfectly opportunity biggest look look go you margin Is of costs, year? about of curious you're line next tailwind? just think terms as didn't into

are mean did I reflect inventory what significantly stocks And asked didn't they've go you, what than you like well. the on two in in tell to better Yes. go been last years. I'll I'd what our well.

think I So really up inventory perspective. from nicely an set we're

pause materials, what In terms margin that headwinds as but challenges we hasn't of overseas, in is the hope and I will which start of raw reinvest is inputs happened a labor, again, significant But both us we That expect inputs we we seeing headwinds, gross get we're gross thing. for to couple type some freight, the inputs, years in material of in of of take both due increase in back margin not think Paul, for don't a years. couple to reinvesting being if tailwinds, of do inflation that to the chain I that product. and supply year, into last all something back to benefits see next

is with Group. Jeremy Hamblin next question The from Capital Craig-Hallum

expand about Five used with the seeing wanted I you've in success and congratulations. your WOW in Beyond factor that my that, ask add the section the I'll opportunity really an to stores. to it you're as

where like have a value feel testing history offering. just of you below this in could make just to is start and learning $XX $XX section? the stated you've and it and largely, a price history and of price seeing guys there store product Is sense point, given the point we think understand, where wanted doesn't you kind that the of Five Beyond but something I that's

you, success Thanks, are to above times contemplating I Yes. in Five in with at X tell Michael learning out. time. this even merchants on a perfect of the many would Michael, he's new not for of classifications anything $XX year. point already fact, we Jeremy, for work. it seeing he's said shout I've And ago, on X that just is couple got shoot, few this us But to ideas public. It's all a a what was and anything, We're And I this year, classifications in those a couple I Beyond. learning we're think calls took will so And hours excel. years and years to perfect if the next year pretty Five Below, taking based

where earned Below There the I the so customers increase as or positively that will haven't great to have years And that, many go those for you're and focus $X beyond, and range, the upsides got that penetration items we $XX. in like to about is. of just that's keeping Five so come. front, Below really think asking Five and many to got And continue are Five separation. both have above in new are to But both right this in that responding we've back about do growing the the need expectations to $XX to Five they've keep format of John I Beyond Heinbockel was now asking the

next Deutsche The with question Bank. from is Krisztina Katai

into you both Joel, talk ask a not lot in know since but product consumables for potentially holiday that now deflationary, guidance year, categories I about pipeline, move are and providing for going merchandise the to you're general could you next I direction. wanted 'XX. of

was opening you avenues a wondering I is up for from if So that merchandising perspective? new any

to about us time, be done thought being Well, the thought at I deflationary. going talking questions inputs somewhere I ago -- Krisztina, to years. product negative the the wins allow it's back question will it like couple reinvest a are that, of about benefit same answering us to going was I of deflationary, with And that the margin you're some more is will were a we've I us. you it. And gross into into those also those for that of

seeing that gross other capacity of input and significant is the containers, a also overseas I terms margin in think we're the into line. is big nice opportunity

So all bit in least not if everything is all, to little pointing deflationary. a steady, at

that will the And others some product and quality. of improve will of flow to it take through

question from Evercore ISI. Michael with next The Montani is

potential growth right, terms growth? for is next ask beyond. of helium, kind to wanted do secondly, outlook just to we're loyalty. initiatives, about I we to need the we in into in store constraints there piercings, and of teens consider fascinating year there? Do point a that feel some high Or then And some there's

love those latest from and Just kind thinkings get your to things. of learnings

angles a XX-XX great second made progress half and I a other is the full the and cadence on, as to in the spot, in growth to remarks, prepared my the in back we're of probably said And on in that pipeline Look, half. X opening to a that closer tidge Yes. spot first teams it years. you're terms getting exact One next both and two hasn't great have we'll great the 'XX. But those, on. type, year store high in is in focused shape pipeline been really getting count. in is There's be counts for

then those as and services, just at is calls, more numbers last you again, call. kind the we'll we've exact those Helium give pointed long mid-teens beginning more just to thing you loyalty, your else then we ear this it's everything of I look couple at beyond. over indicated all continue upside. of think piercing, to or and And either balloons, incremental are ICR term

is The Capital Brad from KeyBanc Markets. next question with Thomas

look your in at very we being hearing we're what retailer nearly is as discretionary across some down significantly. is results cases, as what the categories out down relative landscape, Joel, to calling retail stands every out really

do stand really out here. And think your results so I

about are perspective. of seeing a How trading buck? you're I doing average you just a right was well repeat of seeing Are so much from into maybe puts why now? new back you may customers size? all are little a more wondering What if talk more ticket kind in, that be bit down and you on the terms could maybe seeing in context you cyclical trying seeing you what customers to coming stretch pulling

Thanks, Brad.

is And certainly, to very discerning. that of per why to mean that's got units a traffic, couple why think customer you've about ago which been positive. I has win transactions that's I speaks transaction. being it a questions very the with or that sign

why we're and in prepared think our history tenure a QX on said shown, winning stores needs. with store space, their the store out is through And starts kids. has remarks, place largely In wants. and our last October, X, the QX a store my QX, in kids my parents that cut discretionary, is I in I long

here as with And for and at the and value, what resonating worried But really dollars QX, trade so nephews stretching look customer. seeing nice and further nieces certainly the we're down. parents in and we're that's we their grandparents about seeing and destination we're are a

Gordon Haskett. is The from Chuck next with question Grom

couple little to of they maybe I'm in volumes. a of terms couple from of curious seeing just conversation starting if trying will, if through and light your years shine Michael after into a held more he's suppliers unit plow innovate ago, what that with you you hours to a are can of you

excited? And what from on seeing that trend you anything a front? you're that curious Just has

he's stores think, away of I of of had never Michael, with know lack never secrets with while some and this I Look, any have a is ideas you that toured any give him, I've with a out month to for year. India upbeat we about merchants. was I office Don't seen opened there the our just most the that. kickoff forget, personally to this ago Michael

over will to another out had We spread help down costing starts and example faster. will chain factories us there. XX It countries. that move us will help really keep it our other innovate. us to It's help It supply

and the but in to out and from ebb store flow -- was year. trends And always, And X like worlds we're to several back-to-school where excited as mock is excited. I in category they're merchants I our and next for so called Michael example think remarks. are of kind of that's looking allow those just my one the at really change. And down us I today, -- our already But one next prepared trends

of ahead specifics, well on I that, merchandise 'XX but there a about. into lot can't get we're So the good really out cycle. And the of positive obviously, Chuck, stuff feel I

from next Kate Goldman is McShane The Sachs. question with

particular landscape. I at and wanted mass about competitive in signage lower the channel that years. seems believe around on of are a ask point the just I've focused that marketing to I they the and than last price more least It like seen couple

landscape. there's your what Just the you're value with competitive the other of and wondered component how in But just thinking any you're seeing regards there? from to Obviously, positioning insight below. five about competitors,

It's great a part. on observation a question. It's your really great

price great there's product. with something stores overall, doing point, got a they're then always features to business. we've deliver retailers you great Five value through Below doing out And it's with trends for some marry we've think That's right. day in that the space, message that it benefits. our really And us, experience customer. And stores layer great would we're some certainly, that And since that started They're customer. perfect, doing think struggle. on a our being they're we in resonate this I trying trend through you'll their And I value the up to I experience. And for this done great year. communicate about in in we assume, not a value. But see a and it's doing there several it job own

example. gives that hopefully, you some So

in resonating a competitors I got we of out there lot then retail fun. space. And to certainly the is our with home some stores think it with it bring in

from America. The next with of Jason Haas question Bank is

going in So I comps to to expecting relative we're to implied to -- you're stronger I expecting XQ what's And you previously, see XQ. now that It XQ. XQ in have now. the at guidance similar looks were are look think comps like see to by

and start a to calling cognizant that of you're -- out fact the So the strong quarter.

you've closer so a holidays. buying I people they're shopping there's closer cited think to where been to dynamic are need that

closer the conservatism if to we is or here? get curious even possible will that it holiday I'm that's as So stronger just we demand see season

my I year. take we quarter it help thinking think taken you think Yes. to X.X% if is ago. And I we And that. to Kristy, I X% full year, up now Kristy on X%. out certainly our thought through prior the guidance might a the recollection was was, to we've what what? than in -- need me But QX isn't you to it lower

Jason, you're to memory from help my there, So you're me going what to, referring but my... to have jog on

that the X%, X% implication was Yes, or a XQ, from X% like we like comp I that. like don't more from, remember to go exact was think to a but comp XQ something it meant I I I just think

So acceleration. It acceleration. sounds be have that there's seen going an you to like

So why question. isn't not my raise really XQ

Yes.

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on Congrats strong quarter. as the well

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else. Temu but we -- as So much anybody watch as

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Group. from question Joe The next Instructions] Telsey [Operator with is Feldman Advisory

I wanted ask or of real know that it -- -- or I'm past terms curious estate in that to more was rates also easing Are the And of the are is you're real just And what year rental two. and guys build. there I pressure of just costs, at or one in lease at a easing bit estate. wondering Or on seeing all? terms up because costs seeing go if to you cost all? forward

our slightly continues close flat. rents pretty think that increase I rise. to But It rate certainly hasn't are we year-over-year. inflation it think the to overall, at I risen same saw

just years, the think challenge has weren't I been bigger landlords couple building. last just the of

pipeline much think taken year. building more fill just I next our more ICR as we into the positive the give are likes that specific ourselves on of And than the really landlord. with control this bankruptcies But so of of as you that destination, year, to continue that to the able be many kind year get stores we on may and think I relying and really and numbers happened And up we'll was well. starting number into of next

full. remarks, tell from pretty my But Joe, the 'XX pipeline you can prepared is

half And hardest first us. like over second behind significantly part feeling of real year year. rate this we're grew Our of is the estate to

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

a the building experience QX you, for incredible to outlook. are and all holiday see focused value, you, shopping and products our summary, you all the I hope a and really Look, as families long-term in for our thank well in you teams holiday. future. and of call joining your Thank holidays stores. operator, everybody, I us on trend-right for for delivering terrific as fun our our wish

ICR December. January. again in at and look great will We forward have Bye. Thanks, to speaking conference a the you with

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

now may You disconnect.