Five Below (FIVE) 4 Dec 242025 Q3 Earnings call transcript

Good day, and welcome to the Five Below Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note that this event is being recorded.

I would now like to turn the conference over to Christiane Pelz, Investor Relations. Please go ahead.

Nick. you, Thank and Below's everyone, joining today us Good Quarter thanks XXXX Five Third Call. Financial for afternoon, for Results Conference call Kristy Chipman, Executive Vellios, Financial Officer Bull, Officer are Founder; Chief Chief today's Treasurer. and and Ken Executive Interim Chairman Officer; Operating and and Chief On and Tom

materially pursuant described remarks, risks and The forward-looking made and call Private and both we and unknown certain the comments provisions to as do during will not this call from uncertainties are remind in to of to update this management has statements. harbor amended. Act differ known are any we to forward-looking date that and uncertainties to made After and release questions. statements Such Those of constitute Securities filings. the risks of our you SEC statements forward-looking could the and statements. may our of made obligation cause press their formal meaning statements are safe the open that I are need Reform subject today within as such Litigation forward-looking made actual XXXX to the the undertake of results call,

will our refer this In we presentation, SG&A expenses. to

administrative Selling, and For expenses. advertising other compensation, expense, Expenses, us, marketing SG&A General selling including means and and expense depreciation Administrative and payroll other and and amortization

items to are will certain A GAAP discussing of non-GAAP U.S. be we these in measures. Additionally, release. today's financial included press reconciliation

at copy Investor page may one the obtain have Relations If you you website by our do of today's a release, press not of visiting fivebelow.com.

over to turn the Tom. will call now I

to update. for third all discuss our business results you, Thank quarter and Christiane, you joining and us thank today

and made making second with the lift I refreshed call. impressed mindset to focus a a this lot are very progress Ken second together Below I witness our already and shift. Five have been we and an since are the quarter We that with a organization has firsthand have team, impact. come so with our of since pleased entire is achieving it's what quarter, The heavy asked a of been capable we've

to Five as the the [indiscernible] company for hard entire opportunity teams position ahead execution we work commitment, thank want and Below of I to for our across us. their

people discuss have I refocus culture to accument Winnie's the say CEO. all The suited excited as and and want organizational new make announce organizational are role. merchandising she how Winnie sourcing, Before global to leadership I champions underway, expertise, the consumer specialty values retail, importantly, and experience our especially her of uniquely value breadth across we Park how for

trend deep In addition, intersection value. power at of the she brings a and the of understanding

the continuing excited be As you And I realize a us now to integral Winnie saw Interim to Five I and his was in role and want Ken of COO. entire that the in behalf Board CEO. release, am stepping team. Ken's delighted of Below business him our thank our the for press as is deep in knowledge on as in our of full Ken. will on in I'm Executive refocus In that our skills well as experience powerful potential. to strategic my to we as work motion We continue setting a and positions priorities. combination and have Chairman, role execute expertise alongside and

urgency experience. of areas value and made sense are of strides operating to short the and meaningful address the In business outlined we our with last we a to the spoke, months the store refocus we've call, X last on since product, organization

is capable to of. an we are have this we to go to a off that encouraging we believe start, ways deliver performance While the company

best and for parents. store destination to the remains preteens Our and vision be Five YES same, the a teens for for

our getting are to core. We back

our Work newness and optimizing scale is customer up experience same Focusing what and store high-quality the an improving amazing our assortment, trend-right, want. strength. the while leverage they and time, value, to deliver at our cost on and underway product edit

about have are to long about to Below achieve confident unwavering on and on fun always commitment ability an to We of to our a before available are experience. back space delivering of we working and extreme working trend-right I'm I'm the And a we've runway Five I've positioned store capitalize put the product properly we in this ensure the opportunity. value, growth white been maintaining promise customer to team's and them. future, excited us. vision our with passionate from significant

with over Ken? to that, now Ken. I it hand And will

I'll everyone. then good third then results areas the outlook the the experience afternoon, value [indiscernible] of Kristy and our will focus key quarter on details updates more Thanks, and on Tom, and make for results our some and on discuss comments year. of rest and progress share product

I before excited how into But get I to I to to the results, am add team. Winnie want welcome

I both take fit. of For great forward partnering deep potential and crew is Winnie her growth. customers contribution drive customer-centric a phase and experience, teams. been our a has our make and next months with to moment want leadership the unlock people, Five have team-oriented focus to look what It they on busy full style and and very to acknowledge has been significant. all I a to of Below's also accomplished X and incredible recognize the

quarter saw was in on a increase and results. Overall, of broader comp we the improved million increased worlds Now across to results the group our guidance. third These a of to $X.XX. quarter. ahead $XXX to compared were with Adjusted XX% categories Sales sales X.X%. of our EPS second

key time, do improvement also a work business to areas all across including comp consistently we metrics. At Our results. were the see experience. overall encouraged very drove vision comp in operational and positive and this same improved still our we execution the business to customer have better achieve deliver We across acknowledge the of to

third lift quarter like last quarter our delivering the comp states, new stores during performance XX expectations. our time. growth made grand sales, versus in of third summer all stores, State We across also These including and of Wyoming. states XX store new much of record XX% For our or XXth a located opening our were stores stores XX X X here fall opened performance year's exceeded top count.

Tech performance the seasonal of took Toys deliver Regarding worlds, the together style business over results Games sales we and our categories. and especially outperformance. the quarter from Halloween, in in which tech half the were delivered newness to third by our positive and value, the Beauty, candy represented initiatives see worlds, to and add We encouraged

Five business that and represented Rio, celebrate Within customers. help were right as strong resonated Our assortment, extreme with as both also with San trends several Hello Beyond departments trend such items license value trends we XXth birthday. was our existing across and newer our Kitty's

our focused areas. to key to Five Below's into commitment core are merchandising on value, Now we focus for Flexibility, to our these with being store and we YES the and relevancy, nimbleness are parents. are success product renewing on kids capabilities. and and key Starting speed leaning

our key of One identify ability differentiators quickly and has on the been them. to trends capitalize always

for renewed quickly capitalize have merchant amazing items now truly teams together merchandising, We customers. deliver a allocation back office, speed driven focus trend-right towards the positive in including quality, equipped on teams communication sourcing, trends on we our and are and our innovate. collaboration that multiple development, momentum and seen have by groups, visual planning, greater and sourcing across organized and product believe merchandising. the With to improved innovation better WOW They and value

is category SKU improved broader performance. Work key world sharper drive and With item and better underway productivity and to more and consistent approach, an rationalization value.

to to this next As and begin some year. expect we in time, these changes quarter currently quarter, we take see the said will impact of last the second

it believe products incredible opportunity of to we Beyond, continues a highly us an edited at to deliver Five Regarding great provide assortment trend-right value.

we and with when customer the we teen creating Five Below in and our assortment, will will stores. as optimize We same do the focus apply this core presentation and preteen filter product

On to experience. store

be differentiator is for for Our treasure cool store Below. Five destination the the to for store experience We hunt fun aim key and experience. kids also a

experience year crew. in August beginning to begun enhance streamlining labor customers crew. efficiencies invested both work have our labor in for more into added and the and our reducing operations have We by stores tasks for this stores and our the increasing We creating and

levels, quarter, our has manning teams The areas actions holiday reenergized a focus associates improve the an we store assist. them example, to service date have deliver taken the store available As and in to checkout and crew to of investment high-volume our especially with better self have experience. our more part and enable engage customer customers efficiency to and to

fourth Now turning to quarter. the

the season solid early, a the off Black holiday is While on is plan. coming weekend to in very Friday start it with

filled are to seasonal from stores games toys apparel, stocking and cozy stuffers and decor. to gifts Our with

and $X this We season are more $X, value leaning holiday into even items. $X with

to quarter start we as it our expected outperformance Thanksgiving to third quarter is this results impact Black Christmas. pleased holiday weekend our had the our solid were used results, our Friday to important fourth fewer with with We build year. and acknowledge quarter this calendar fourth on of experience have As the in XXXX and that and plan between days X shopping last

and ahead, for look future. and pleased in the we to we with are As have opportunities we about are improvements able implement changes a the excited the period been short

runway performance that work of underway growth encouraging results. is We a long and improve have the results ahead from to and early

a of close, the comments Before make want I on topic few tariffs. to I potential

through in to other new XXXX solved the tariffs tariffs pricing XXXX moving and product to Five and vendor in tech primarily frame not countries ultimately, successfully our combination a reengineering of are and assortment First, We sourcing product Below. changes, increases, collaboration, time world. late for

said, sourcing only vendor have well to also global tariffs. a many our impact underway Beyond tactics utilize established not to vendor office successfully to base Five tools our which already again. of as work teams before, will optimize is partners today overseas. expect and potential this we is and India overseas sourcing these as That playbook, our with mitigate do help have What's the We our that having different we navigated

energized In fortunate talented are in have and we place across closing, organization. teams the to

implemented prouder to teams have that the have company drive entire I We begun in laid to out. meaningful I reset and the vision our Tom of more and be have could wholeheartedly Below of embraced. have confident mindset change our team Five the and not

outlook over our results And in with more that, Kristy detail. Kristy? I'll to hand it to and discuss

comments create value everyone. good third results a forward my on our and like refer with for Please to GAAP discuss for to our I my our to reconciliations. results of you earnings release press quarter will our working refer welcome afternoon, basis. to Ken, to I all with adjusted would remarks Winnie, shareholders. look then outlook. Thanks, begin and to add review I My and an will results

partially X.X% XX.X% of an decrease in million to Comparable quarter ticket last third the third offset in of sales comp increase a $XXX.X sales million driven by quarter Total in transactions X.X%. XXXX comp $XXX.X the of by year. X.X%, increased from increased in

mentioned, against the job to place did improve put in great we team Ken As a executing the initiatives sales.

to still metrics, reset, to it's and across compared we in While key our and transactions in average quarter encouraged see third improvement second ticket. an were sales quarters the early first including

opened third last over XXX last quarter, opened of XX stores with XX new or ended we We year. an quarter stores compared to stores new the In XX% increase third year. the the quarter stores X,XXX in approximately

stores Adjusted quarter increase New approximate driven XX.X% offset third XXX the and third approximately by benefits, million XX.X%. the benefits were $XXX.X last by partially gross to timing increased product that for These points actions benefited third improve distribution. primarily quarter. productivity was basis in fixed the from of margin Adjusted the expectations certain of new gross point the from cost and taken our XXXX for resulting by year's margin efficiencies an shrink our exceeded [indiscernible] business guidance including basis and quarter, store lapping also profit of to true-up deleverage. XXX the

offset points of [indiscernible] last adjusted investments payroll, versus of fixed percentage XXXX third was driven This as including year's leverage, as labor hours the basis approximately to XXX primarily leverage by by quarter. cost partially from initiatives. increases third for a in SG&A As quarter wages store well increased in XX.X% management sales, and

and lower million margin operating versus was adjusted results the to year. result, our a adjusted margin fee. the fixed X.X% favorable expected, primarily was due adjusted X.X% that better Versus guidance, sales operating than operating income $XX.X to due As were cost was last deleverage

$XXX net the of investments quarter compared in ended and per diluted and share levels. approximately $X.XX. of inventory last We million quarter per-store Adjusted our to versus Average for earnings the million inventory third income $XX.X third due quarter third the $XX million of debt. last of $XXX.X new cash, per Adjusted inventory million end to share year, earnings implement reserve strategy with approximate The strategy incremental the versus no ongoing the net $X.XX quarter as at the Inventory compared last was to to an the at end X% $XX.X of at decreased was quarter for normalize quarter a million primarily third we million last the our year. discussed. equivalents the quarter that diluted year's inventory Ken third the was income balance year. includes merchandising $XXX for basis unproductive cash on as end

Our third us year sales expect guidance, has per than deliver our store to quarter ending we against with inventory positioned quarter average last inventory well the lower to year. and end fourth

to guidance. Turning now our

stores XXXX. our and full sales, outlines release guidance year press new Our and earnings QX for

fiscal the XXXX an of a as to earnings on focus my and XX-week our basis drivers excludes that detailed outlined basis fourth adjusted or to noncash commentary on items fiscal XXXX XX-week refer year I'll quarter XXXX and impact for So press guidance. will a and on the basis that of release. in additional nonrecurring year I

per As to extra a reminder, year. the in and week fourth in in approximately earnings approximately share $XX XXXX sales million added fiscal and $X.XX quarter the

fourth range expected adjusted approximately in year-over-year on of basis, with to to we following: the decline the X% Total increase comp X% expect negative a quarter XX-week between a of sales negative are X% For X%. the XXXX to

negative lapping as the the benefit year of and last timing similar the due points expected gross is XXXX true-up the midpoint [indiscernible] As point comp X fourth the offset days basis quarter than certain at to a approximately a season. more and Thanksgiving shrink between basis is the reminder, by fixed from the calendar XXX decrease XX Adjusted deleverage costs, shopping the with of fewer this margin including is holiday by season to cost product freight. Christmas to on

a This higher by than investments the sales and at by incentive percentage basis of in at year with as expected year. lower comp approximately offset be operating the the midpoint the is of SG&A results decline on Adjusted prior to compensation. midpoint negative margin approximately driven ] fixed deleverage [ cost basis points store hours XXX quarter. and This XXX partially wages, fourth points prior adjusted an compared in the is

first by on half the is well efficiencies. the approximately points sales percentage wages compensation. a lower XX midpoint as reserve X% in gross last partially margin Moving offset of basis year. last to as sales higher that as on the lapping of is comp Adjusted XX% approximately full than comp approximately X%. increase SG&A negative Fixed midpoint at and a decrease year. decline freight partially basis approximately to to Total the from approximately points to of are to expected DC expected deleverage Adjusted fixed due with hours is year, offset deleverage the shrink on the comp inbound lower between by true-up cost at incentive cost the and negative year's store only are investments XXX

is adjusted approximately expected As than XXX the lower margin to or basis be operating X% year. points a prior result,

year-end. Net income $XX is to be interest million the forecasted approximately for

completion We the distribution and to for ] of effective expect of the excluding Arizona XX converting growth This now infrastructure. stores, systems new to XXX XXXX of full in XXX tenant spend locations respect Georgia rate format, approximately and approximately we [indiscernible]. of [ Cision a to the impact reflects in centers our With $XXX plan CapEx, in and about store the allowances. opening expansions million, investments tax

X,XXX with year the end to stores. expect We

to to all press refer our earnings and our guidance, For release. related results details other please

pleased we return is well the to progress. are Five of its signs up, Below realize potential early the work full to and underway, with wrap To

large ahead. We opportunities the have team our months I on to our and in meaningfully last opportunity for and in Below comp we and growth. that results these the several future. thank our continue reset teams trajectory improvements, lie during for as plans, as beginning are to see which and The our confidence provides us coming strategies we improve implement want to a ahead positive is Five against our executing merchandise experience we focused entire

And with call to over question-and-answer the session. I that, for to operator like turn the back the would

Thank you.

session. We Securities. with first come [Operator our Heinbockel Instructions] John will now question Guggenheim begin the today And from question-and-answer will

of then I one. if value, when question Ken, X just product with is think touch think you right? do on value right? you about you [ do to how as assortment, the what X, world, the talk recapture touch key about to of ] you things one go How certain the of recapturing think extreme want a you extreme And SKU know But on about to by you broad noticeably about back think do sort X, you right, kind forward. allocation sort that [indiscernible]? don't want cut point, you price but areas? that Maybe

John. Thanks, Yes.

know and you of around product areas focus As and the focus are a areas key as we've key said, value. couple and

back mentioned And the You that we focus across targeting to to good all focused on think be saw ultimately -- It's it's consistent things been is than the around that. get want merchandising that the I there. to more we a was And more worlds, a from and to and third performance will our and which few and perspective to world. areas. goal extreme to back product, always towards we're high-quality, piece that's deliver think trend And I going it that's right kids. teams always for get a and value, more consistent the we one increased and across of quarter, performance of you see in kind that broad as just world the the the

going SKU That less SKUs, should is more looking on to go-forward there work rationalization, get a improvement we to basis, the say also The at be go and we were and SKU of start SKUs. year. will to middle other next drive a through see going we piece did around would we we're we like as expect to productivity, which some the into

that mentioned we put in Now the got it, and being place the that own, had we that existing for we've Kristy a reserve inventory against said, products.

us So that will there, get too. help

probably go-forward a into and forward, the we next meaningful SKUs move reduction year. our that we'll as in But is see

you key see mentioned stores, X an I holiday think in the in emphasized, It's you especially It in. that price when area was points, you're you'll the to look and less when business. that probably our I we points, for represent $X also always price you they the at if been X. us. our walk of part And a out the XX% even there of mean, still units

going don't always that's move ongoing to to anything know I be we as us, the forward. us an then, And to for for have you That's Tom, important you want especially that? add focus for if kids. So

newness perhaps degree, can we a to a expect find that need obviously company in. ability look of to as Yes. a specifics, and John, allow say to reduction areas, real we the businesses No, we've think at one as at learnings a those reinvention the I we opportunity businesses see say you guiding some a of cover greater to a into come areas. to in in reset way I thing need to see a and look to worlds, as way SKUs of for reduce And we some it's certain also fair would without a ahead almost enable meaningful looked at much all to the lot it. SKU that to

no Just on it. There comment is about price to add on points. Ken's question

starting see it. to You're

even -- selective think points, Five sure we Five a we to emphasis the to and in very extreme is filter see narrowing price value that time, opportunity right what expect that is at more an And filter there the can on make the of focusing You same while Beyond, to trend are with product but be Below. on. range, greater same

So come. more to

Thanks, John.

from Haskett. come will with Gordon today question next Your Grom Chuck

progress. little back being guys of just bit the about Congrats benefits on everyone you a the could in talk office. the Wondering

to hard But it's in, and the missing, helping. On it like see. outside that clearly, it's it looks clearly, looking was

also of about growth. thinking that? store about years, out can how And look you next couple you talk are over we as So the

New store where a better productivity it's you bit but quarter, below historically trended. this still guys was little have

store out? growth and how year just think we years So the next should about

months the Chuck. think Thanks, us and a office, now. it important Yes, back for -- I that's get everybody to to it's we -- been was been few

hybrid all see is difference online. You environment, to the it's business collaboration to is tough do really, virtually, tough innovation. to tough only and and can the way get that's do to this because And feel a there do it's about in

you planning, especially allocation, So merchandising, the so around areas throughout in organization, visual key those can see merchandising. products,

the In what pod, that's working fact, we It's approach. it's because reinstituted about. physical pods are team the a these where teams all together

and think have store short you're seen right, of in stores. called I last I mentioned year to Around that going call, on we next out for you, us. we to a we of of real XXX growth, So range the continue to XXX benefits think, that's a period time, the for

of stands to I we're mentioned at, our lower selective that probably extremely with to we've range, been we -- had before, sites, continue. the that based As now, going and end it's on think what and looking that's we've closer

some that And in landlords some kind that's the of properties, and of number. pushed our delays had have so of

of right now be low the at that end So to we're range. looking

it I do. in the future With we that's our growth XXXX, at everyone fourth even quarter call. forward. talk have to about to quarter further Thanks, our we normally look regards how fourth anything related on else more call years we'll going Chuck. on mean, of to kind obviously But as update We'll

question next Group. Jeremy will today come from Craig-Hallum Hamblin your with And Capital

QX, at you that had off et exciting whether what maybe on? out cetera? congrats Congrats do was, have you feel you Black you the on product start, of bit team the have to you South could results. assortment into with Wicked, what But a more like do on your come in you're back some do-over you QX, Moana, Winnie leaned improved period. where would Friday, opportunity wanted solid when I But that's you think whole just a drove and licensing to to If like a understanding missed to better? to kind look do is could business things the have what missed opportunities think

then as in comp. reminder, several like outline think XXXX? impact a Ken us, compressed I Kristy, basis what hundred just season I to for And points is the or you was can recall

Okay. the Thanks, a out, in experience I'll that's question and of this take able have able fourth to time the cadence you quarter. comparable, be part shortened as We this and last Jeremy. that had use that's called first. that to and season year expectations more be that's, to a benefit to XXXX and determine for we modeling

about I in believe X comp say, I XXXX if you the fourth look in the a from, go of into we probably you X back about QX XXXX, at of comp QX, minus quarter. and think did transition QX a

we're had differential and in third to landed in the what we what quarter you in the fourth point It's So where to quarter. terms XXX pretty about we've comp. a similar guiding basis in here of done

use we as our we a that us. guide kind as of prepared So said remarks, in for

of to want the happy In small just we're to a the there. fourth that make our of potential by in have They gifting just I an in impact easier the nature period a a terms approach got quarter the you quarter, size chance of in to on just an there, ability to that It's to thing business. from more given time. of nature opportunities, and reinforce, Halloween, impact have and the the do just the first quarter. QX, real think item QX. had do season a because short really approach It's I the item the the for little done self-purchase It quarter. the in It's QX teams with of to third much of what quarter in of have turns on a QX more and smaller bit difficult

we're and never never pleased, we're better. And for looking you as happy, know, myself always we're Tom,

really execution job has for from yes, definitely the season standpoint team and tell holiday but So also a product I done got in you, from good there, across us the out a there's preparing organization. to standpoint an the opportunities

the or they've a So fantastic the teams, allocation the teams, even us the done was it get whether to done teams operating there and what for stores job. the experience have planning

here lot that learn. a to continue there's So we

go mentioned going opportunity we Tom going his forward. to that think I to in more use and those just things, to, remarks we're be that that's as

thanks, Jeremy. So

Short next today [ come Melius Karen Your with will Research. ] from question

couple Well, I'll it are but any? few. CMO Just for maybe number then into leave there curious to a stores? of the the of replacement, if questions. you That's optimal lumped one, I'm are SKUs a think on what And

Yes.

thanks, Tom Karen. I'll So I'll have the -- the I'll on SKUs. answer CMO, and on take

with. I think as today, we merchandising pleased it our in is team are very

We the team have any there. consultant who leads

before. We mentioned this have X -- we've

X anywhere X tremendous whom have XX years. We DMM, of a have amount of experience, between X to

side that drive in this work team to and Very on with the confident their coming they really believe, and do, forward this we board team. the at pleased point. which I great organization. very, at think bit, hub business with level involvement, do place, we're my team immune in and product all you been but is a I ready are have merchandising Winnie of happy and and the look with of around of merchandising We has the a experience the And very marketing ability

to say, focus SKUs. Yes. to rationalization optimization, productivity. of into of of to get have where there. as going forward. XX% we it's some say time seasons future that quoted really just reduction Karen, an is, that's to in focus said, the us we is a the and play that in I going I But And we've a when that for takes again, in is that we on now. to we little could mean able the SKU be work. there these the see SKU before And see mean, key opportunity bit We'll up a And do -- that then optimization, results that's be.

to we'll take the there's worlds certain the that there's is little mention and it probably bit for across us more newness. a you I place that's does heard Tom look think going opportunities that of So opens up world, also, us. What for for that

talk really customer. especially for excitement critical the to Newness is the you when and business, about trend

to So go as give more forward. newness that us really will focus the in ability we

So just a little bit of SKU clarity around Karen. optimization. the Thanks,

question next will come Michael with from Your UBS. today Lasser

prices the by the has quarter Five the do of improved to has been offset using the quarter adding of the it result reconcile to just tariff was increased driven price risk And how that value XXXX? that you to environment as versus going second taken actions, a the from you're especially the time? as much Below lever that versus third over value, the in How actions lever using if external more face improvement a

Yes. Yes, a there was benefit Michael. perspective. from external Thanks, definitely an

I you especially then improved, the that exited QX, traffic. you when quarter of and July second that in looks the across we and look the like probably middle around it continuous retail the enter think sector time at improvement frame as traffic QX saw

perspective, categories think benefit broader for And was to performance we the the product capitalized there. the a key. right? the again, that was I it from ability It us across saw that had was introduce newness. And the that was on traffic, we

about. and responded business too, there, all job had really spoken a the Halloween team introduce in We seasonal to us that. think in drivers pulling mean an ability together season. we the We successful have pushed We really traffic that well the did value. customer had also trend. I We embedded I outstanding for are to and haven't

the And great we in teams the it quarter. And We flowed excellent much teams and you into When going look the Again, at we the the other from throughout better did from did. execution other than style perspective in stores, We had we did an our stores product was I a stores, Halloween. second there our we were in the a again, operational much the delivered standpoint, better us. categories. a categories, in saw an job. invested mentioned labor you in-stocks. transition seasonal for But piece product that was if

of combination to those a really things, was it It's of hard all amounts. kind So pinpoint right?

combined. of all that it's So

by value, one it's the around question other It's thing quality maybe way, it's to how tariffs. high we just it's that when not it price. Your price. trend, was say and mitigating and The value relates

of what it's come feel the So store. see that's and those. really And into when combination all that customers of the a they

price with product. point start right? it's So the just business, about we're of it is, the because We wrong great not in

perspective, then we'll where tariffs go. from a tariff And see

potential. it's mentioned, big and a a big I As it's still uncertainty, still

We and have time that And a the one day. going mindset shift leveraging levers the of is that on scale. our benefit and working we can amount that spent us, of piece pull, on last had the us it's other part better to Tom end mentioned at good that's price the the is of we for

value back I for think we that the more us that drives can customer. to translate

great basis before. again, on relative retailers So ability think, a better have be prices with think compared have to there. going if I the a I need other position be we'll to we than do board And go in that we're also it's to retailers, to still other to up, across because going the

Michael. question, the for thanks So

from come will today question next Scot your Ciccarelli with And Truist.

pointed consumers? excessive feel for with you what full, income had Was board? to So have kind consumers know sales it your the cohorts concentrated hands but have I improvements weakness lower-income the do lower drove a customer of it the primary across as Or you've headwind. your was sequential guys traffic? with in you

Yes. consistent we Thanks, demographics. Scot. the a income across No, performance saw various

when we've that go in the back business, recently. what we So historically, consistent seen we saw with

that good see. So was Thanks, Scot. to

Gutman next question will with from Gutman, your maybe your And today Stanley. Morgan line Mr. muted. come Simeon

Kelly from Fargo. next Wells our question on to And moving with Edward

Good couple as from margin wanted about ask standpoint end. our things next afternoon, of about Kristy, a year is everyone. on Ken because there we a you some uncertainty to I and think just

self-checkout about on turned you So think if again. I shrink,

the get you year? Labor? shrink any labor next invested in in You've think, half do basis benefit I points, be working. back it seems to So by, XX

how that incentive need the thinking headwind -- can like year? us that we margin a next just is that because about So to Can you headwinds there in at to help comp? I'm that And next you extent don't consider. like curious it think what about looks is is we I of quantify know some moment. much year,

focused are with are Yes. kind -- outlook help do can, guys Thanks, as where And transparent complete tell on right we've our as go-forward around do, we you us, modeling. and will that's we energies we on of future call. the try as season to and right? And normally Ed. especially be ahead on always you, of I now, we I the know a got guidance provide on. 'XX still we a focused and we'll quarter as huge fourth update it's our

potential that talked to we throw about of too, we the in The have tariffs. other there, piece,

a perspective, not any mentioned against compensation up impact have prior considering we the those. think I would So are Kristy on headwinds. this the from call, But modeling would incentive we of discussion be

at it just That's headwinds, again, compensation work comp. you we're leveraging the incentive now. looking the a X% we expect to at would idea, Excluding And have give still to to start we way in the be is you're want an quarter. fourth in holiday year. We again, through information this season, basis more mind, done. get when we'll on to provide And this all but keep comparing an the adjusted

too, just in through comparing that we adjustments this that year flow So those year. next to on mind, keep those based and

So on basis. an Ed. Thanks, that's adjusted all

And from come your Matthew question today with JPMorgan. will Boss next

maybe Ken, So on XQ comps plan. versus just

about helpful. you you next the that speak initiatives that would would comps guide? bear you just be you just if value items that saw quick second million could if initiatives for quarter one the Kristy, you the line contribution write-off, could to from to if you rank further best One and of the that November, the quarter. year, incremental $XX Maybe elaborate relative initiatives newness by And how could help. on that impacted through walk in would what cited inventory think and it this to just If the could

Matt. Thanks, Okay.

was broadly in where a comps, to It the chance the really where had really whether and that which pretty standpoint. saw product. style, out value. an it we guided which better On some I It from improvement from general, help landed. again, was in-stocks, did was QX impact called chase we the and between see. to We saw we In and to good called a performance teams season, for trend we have around benefited newness And great. out tech, also which

board seasonal category, but us in across well performed for So just other the those not then within and really that well. the did Halloween. categories and Halloween was that

those. really another And again, was area I were kind it So too to coming all mentioned that beauty impact. is of able we of from

this of or terms November In the intra-quarter comps, we anything normally to speak early. activity don't

You But because Black had again, weekend are weekend. we feel said, our Friday we and as shift where good -- have in We Black where lesser keep that the solid somewhat guidance. a placed to totally relative, of in the not our days. I Friday versus comps mind really where about especially we are

shape. like And feel then... we we're in good So

Yes. as I adjustment to relates an as our mean unproductive inventory. for made reserve profit within we a Basically, inventory. gross it

our overall gross everything it the million there's you. in on $XXX reconciliation inventory profit. to out And laid I about to talked basis, look an quoted, it's to again, that release lowering you we balance press was So within but for at our for adjusted well a see

Sigman your Barclays. And will next with from Seth question come today

you here? thinking to and, for labor quarter. go guess, just labor investments how performance to a model how this and need us Can the changes for back made I you're about from further to labor wanted the feel just helped I that give investments you the

our it the experience. realized the whether it it call service quarter have areas was labor, not it's labor in we was focus that for in stores, The the And is reflect around whether enough that us piece of and we the Seth. we Thanks, of levels, invested level. Yes. mentioned in-stock really in had one second came that on

whether quarter. of into was So off felt we which start for it us. the had going in at the mentioned that I I it the we third came we seasons very investment or holiday, quarter. Halloween the in transitioned incremental of think Kristy paid an in third the It mentioned how end successfully quarter, the

good So that to see. was

It's I hours just we've and around have it's look to We've to the labor throwing at we're the removed that. handful don't things want stores of not at helped continue workload think that a tasks, also going the to done efficiency. non-value about that investment, stores. you just It's

the that on more focus important So to frees stores. to in up do them the things

Kristy saw there. we continue want excited in I know that about what that third amount And quarter. investment. I has you think going the of -- don't that So we're the expand on we that we're mentioned had if to to

about average X%. Sure. hours store We increased by

about then expect as that. impact of was the about into XX half And the quarter. quarter, you look basis So points be next within to we it

first continue for impact. year year on someone that to to got full asked the what We'll basis in that, half our you particularly about to experience. the we look need of continue invest next it's in at deliver as So points -- stores earlier, store XX

think the we better level forward. And to have updated customer. crew too, one just was somebody in prepared we And where add my quarter, that, thing, did that that's to Seth, to creates in around as It Yes. we that, the creates we efficiency that's we manning think that for other a service it to remarks, the I the help self-checkout, move where going for self-checkout us it area, us. was

before Seth. where Thanks, been versus that we store. us with that's the for So area were positive of pretty

Goldman will And with come your today from next question Sachs. Kate McShane

been some have you you thought competition Ken, call on catching know last of your little during softer I that bit of a had period execution. the said the up

based success Just competitive happened the characterize during you on how your time, that with today? turnaround third and would had what positioning the quarter and you

Kate. Thanks,

we it's focused categories third the high saw this in think to there to in not get is all the When I we -- results that, QX. is sounds We Again, some I it certain product back quarter. [indiscernible] underway we our seeing towards in newness. in quality, results but of is what win, I that value, and in there's seeing what of were about beginning work we think we're you're QX. when the talk know kids and and what and extreme learnings, repetitive, that's do

opportunities for with we more talk to a that's of that's mindset we're go thing -- that a the there. really still us doing within about when as we to terms again, organization, Now ways what But doing shift the forward in we'll the move what continue we see have and this.

Thanks. to more So Kate. come,

today come with Nagel Brian And from your next question will Oppenheimer.

in consumers quarter? driven these you discuss in retailers through there just the the turnaround the significant quarter, just of year. the that between. a comp events? The more that the looking key we We're was Or earlier are the up did Nice end the in really the third consistent was here lot showing that question big congratulations. brands I quarter it through cadence out more Maybe can have and too? saw And at given you and period. the upside for -- see that and third upside low events other Is sales

what Yes. hearing Thanks, of the kind from you're Yes, sector. would mirror we Brian.

beauty quarter in internally the are think more probably on second little how exited and about across tech the to improvement the bit The quarter. through various different yes, the across areas on through key a time. we assortment similar across customer and started when had with great area, that they for the them. holiday end saw able and value there, newness, business, middle seasonal. area, the the the we shopping And quarter, out a the worlds. of probably we talk capitalize of And we of quarter. we I Halloween, it as were off the And came though, the quarter we this move the is

the there But it of was So we Thanks, as went that that together. quarter. it saw cadence improving came through you all kind Brian.

will today ISI. come with Evercore Montani from Michael question next Your

us actions is set what can of percent your you're amount to directly it's ask X selling? headwind corresponding letter guess and was you as XX%? do level guess basically able you're goods feel probably the could just remind sourcing tariffs. then either that today it of like I China I 'XX part wanted percentage be to net-net, what on And part about indirectly? given a vendors? what you grade guess in the XXXX, you back us as a then as final but and I the And I X parter, imported a the that you offset increase saw from around would just being percentage is Is the well remind

Michael. Thanks,

that the to and recall, and be if was you a into to You're if while But probably tariff the do started right. can the going And I'll when there. I the That that there were them off see a multipart from lot XX%. increases happened, look It all at tariffed get a was back they that. question. XX%, 'XX, XX% and categories XXXX place XX%, by level. it took -- for and going perspective, you at a moved off, way, then to started it The

XX% at I think and tech were much relative hit peaked with we that. that to it pretty it area -- primarily our was room in

what about out with and to that mitigating especially was certain too back, then that's talked and kind was got have, pushed us were I the the opportunities $X it in the point, able we to for us, we And there price majority to percentages tech to what that the when one area. biggest breaking assistance us you up got want vendors vendor of a there. work the the say and whatever of drove the the high, collaboration, partnership, percentage.

there through where of coming us. recall, back product, The do that want a We've again, we established out X are our related that been to customer a 'XX going We're testing or got We indirectly and with tariffs, have China. all, You it did percentage going right this potential. X have playbook. to I around beyond first do -- it's which There's know were imported. we uncertainty. though, tariffs level to total the don't 'XX. in if or that's the X because need still total It's to things close directly we to emphasize, before. it's that XX% We've of whether go. is a the well benefit all

had So made if see any to we sense. that

be to over India We us. able office a in have sourcing that's going to help

vendors existing ground we help their on countries or countries vendors. the boots and So us, shifting with whether have to within it's

mindset about we to we working leverage to we're the much vendors we that. back And other need the on the quarter our piece already talked this in can't that we understate, second then again, and And shift go better.

through. to and going overseas set activities this prepared tariffs underway that's with and goes And with already we to where and in of we partners office uncertainty vendor mitigate actually, already heard strategies as working go and our help have looking our up communications actions you the So these. to my too remarks, us regardless with

thanks, So Michael.

question come Simeon And from with today your Gutman next will Morgan Stanley.

probably cohorts stores, uniform? the new Nice was about immature, the reason that, ask I there's at maybe Can at more the maybe for progress. a mature, the [indiscernible]? are, this mid-single guess some and improvement us if I there then low have look markets any then are that those average to even you -- of they it means that age sequential Sorry about you before. if want And again. of are rhyme Beyond stores is Is probably point. digit Five for stores single, mature, that

of event, plan for something anniversary, we we it may that, that. guidance, in some an forget let's know into an Yes. for right? Thanks, much of right, all, various throughout reasons, Simeon. and we detail by And have it's always Because whether to chain, you cannibalization, not too a controlled that's can on Yes, I the the that's listen, a pluses there. and And our store, again, always lot don't can with the a happening want weather, of be. minuses, level intra-quarter. get way, the environment, tell you -- and in it's assuming whatever first whether

been relatively I across But got tell stores. you, it's consistent to

our our heard we where we You exceeded stores positive performance had that stores, in wasn't and newer store productivity expected. comp new but what just our in also

quarter. as performance kind another see pleased Simeon. third I we the for mentioned, improvement, across chain the what And through worked -- the and we're performance again, of did as was saw with that So we Thanks, during the quarter. caller, it

conference our would closing Bull any turn like question-and-answer remarks. I conclude to back for over session. Ken to the Will

for happy stores. guys, to look everybody. all Okay. We you seeing Thank you, holiday and all you we joining season, wish Thanks, today. forward us our a in

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

disconnect. You now may