Core Points - PesoRama Inc. is set to open its 28th store in Agrícola Oriental, Mexico, on July 24, 2025, enhancing its presence in the market [1][3] - The new store spans 502 square meters and is strategically located within the Hospital de la Luz complex, opposite a subway station, ensuring high foot traffic [2] - The company aims to expand further in high-density areas to increase accessibility for consumers seeking everyday essentials [3][7] Company Overview - PesoRama operates under the JOi Dollar Plus brand, focusing on value dollar store retailing in Mexico [7] - Since its launch in 2019, the company has targeted high-density, high-traffic locations, currently operating 27 stores with the upcoming 28th store [7] - The merchandise includes household goods, pet supplies, seasonal products, health and beauty items, and snack foods, catering to a wide range of consumer needs [7]

Core Viewpoint - Five Below, Inc. has shown strong upward momentum in its stock performance, reflecting positive market sentiment and investor confidence in its financial stability and growth potential [1][3]. Financial Performance - In the fourth quarter of fiscal 2024, Five Below reported total sales of $1.39 billion, a 4% increase from the same period in 2023, driven by the addition of 22 net stores [4]. - The company has raised its outlook for the first quarter of fiscal 2025, projecting net sales of approximately $967 million, significantly above the previous guidance of $905-$925 million [8]. - Comparable sales are now forecasted to grow 6.7%, an improvement from the initial expectation of flat to 2% growth [9]. Growth Strategy - Five Below opened a record 228 stores in fiscal 2024, increasing its total store count by 14.7% to 1,771, with plans for 150 new store openings in fiscal 2025 [7]. - The company's scalable business model and focus on customer experience position it well for sustained growth as it enters fiscal 2025 [3]. Valuation Metrics - Five Below is trading at a low price-to-sales (P/S) multiple of 1.31, below the industry average of 1.64 and the sector average of 1.59, indicating potential for attractive entry points for investors [10]. - The Zacks Consensus Estimate for earnings has been revised upward, with the current fiscal year's estimate at $4.58 per share, reflecting a year-over-year decline of 9.1% [13]. Cost Pressures - The company faces elevated cost pressures, with selling, general, and administrative (SG&A) expenses rising 8.5% to $267 million in the fiscal fourth quarter [15]. - Adjusted gross margin declined 70 basis points year over year to 40.5%, primarily due to fixed cost deleverage and product cost timing [17].

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.45 for the first quarter of fiscal 2025, a slight decrease from $0.46 in the same period last year [5][6] - Total sales increased by 5.8% to $1,161 million from $1,097 million year-over-year [6][30] - Gross profit rose by 8.1% driven by the sales increase and a 100 basis point increase in gross margin rate to 43.8% [30][34] - Selling and store operating expenses increased by 10.3% to $368.8 million, primarily due to new stores [30][31] Business Line Data and Key Metrics Changes - Comparable store sales decreased by 1.8% year-over-year, with the West Division outperforming this decline [16][17] - Sales growth was strongest in laminate and luxury vinyl plank, wood, and installation materials [18] - Connected customer sales increased by 2.1%, now accounting for approximately 18.3% of total sales [19][20] - Sales to professional customers continued to grow, accounting for about 50% of total sales [22] Market Data and Key Metrics Changes - The U.S. is now the largest country of manufacture for the company, accounting for approximately 27% of products sold, up from 20% in fiscal 2018 [11] - China accounted for 18% of products sold, down from 25% in fiscal 2023 and 50% in fiscal 2018 [11] - The company anticipates receipts from China to approximate mid to low single digits of total receipts by the end of fiscal 2025 [11][12] Company Strategy and Development Direction - The company is focused on managing tariff impacts through vendor negotiations and sourcing diversification strategies [9][10] - Plans to open 20 new warehouse format stores in fiscal 2025, down from a previous expectation of 25 [14][15] - The company aims to maintain its competitive advantage through a broad assortment and innovative product offerings [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding consumer spending due to economic volatility and potential recession risks [7][36] - The company is proactively implementing flexible plans to navigate economic challenges [7][36] - Updated fiscal 2025 guidance reflects a cautious outlook, with total sales expected to increase by 5% to 8% [37][39] Other Important Information - The company maintains a strong liquidity position with $949.8 million in unrestricted liquidity [35] - General and administrative expenses increased by 3.5% to $69.1 million, attributed to investments in store growth [32] Q&A Session Summary Question: Clarification on tariff impact and pricing strategy - Management confirmed that they have experience managing tariffs and are negotiating with vendors to offset impacts, expecting modest price increases if necessary [44][46] Question: Concerns about business weakness and guidance reduction - Management acknowledged the challenges but emphasized strong execution and market share growth, while being prepared for various scenarios [56][58] Question: Store growth strategy and criteria for adjustments - The company plans to open 20 new stores based on current market conditions, with flexibility to adjust if necessary [66][68] Question: Impact of tariffs on gross margin - Management aims to maintain gross margin rates despite tariff impacts, with a focus on managing gross profit dollars [102]