Financial Data and Key Metrics Changes - Total sales increased by 23.7% to $1,027 million from $830 million in the second quarter of the previous year [18] - Comparable sales rose by 12.4%, driven by an increase in comparable transactions of 8.7% and a comparable ticket increase of 3.4% [19] - Adjusted EPS increased by 50% to $0.81 compared to $0.54 in the previous year [21] - Adjusted gross profit was $340.3 million, a 26% increase year-over-year, with adjusted gross margin rising by approximately 70 basis points to 33.4% [20] Business Line Data and Key Metrics Changes - The company opened 32 net new stores, ending the quarter with 1,858 stores, an increase of 191 stores or 11.5% year-over-year [19] - New stores generated productivity at target levels, which is in the mid-eighty percent range [19] - The majority of items outside of the candy category are now priced at $1, $2, $3, $4, and $5, with selective assortments above $5 [12][13] Market Data and Key Metrics Changes - Inventory at the end of the second quarter was approximately $800 million, compared to $640 million at the end of the second quarter last year, reflecting a 12% increase in average inventory per store [21][22] - The company expects elevated inventory levels at the end of the third quarter due to continued acceleration of receipts [22] Company Strategy and Development Direction - The company aims to be a gift destination for America, focusing on holiday assortments and creating a holiday moment for customers [31] - There is a commitment to providing unique, trend-right, quality products at amazing price points, with a focus on simplifying the shopping experience [12][13] - The company is diversifying its sourcing strategies and looking to optimize inventory availability in response to global trade shifts [88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's position heading into the fall, with exciting plans for Halloween and the holiday season [16] - The company is focused on controlling controllables and mitigating risks while driving sales through executional excellence [16] - Management noted that customer response to pricing strategies has been positive, with a focus on delivering extreme value [40] Other Important Information - The company is increasing its full-year sales guidance to a range of $4,440 million to $4,520 million, reflecting better-than-expected performance in the second quarter [25] - Adjusted diluted earnings per share for the full year are expected to be in the range of $4.76 to $5.16 [26] Q&A Session Summary Question: Can you expand upon the assortment for the holiday season? - Management is excited about the holiday assortments, focusing on gifting and holiday decor, and will communicate product availability to customers [30][31] Question: What is driving the current comp sales momentum? - The company sees good comp momentum across six out of eight worlds, indicating less reliance on single trends [38] Question: How is the company addressing the impact of tariffs? - Management noted that customer response to pricing adjustments has been positive, and they are focused on delivering extreme value [40] Question: What is the strategy for new store growth? - The company believes there is still significant white space in the market and is being selective in new store openings [52] Question: How is the company managing shrink? - The company is conducting physical inventory counts and implementing initiatives to manage shrink effectively [85] Question: What is the outlook for sourcing strategies into 2026? - The company is diversifying its source base and maintaining agility in its supply chain to respond to global trade conditions [88]

Financial Data and Key Metrics Changes - Total sales increased by 23.7% to $1,027 million from $830 million in the second quarter of the previous year [15] - Adjusted EPS rose by 50% to $0.81 compared to $0.54 in the same quarter last year [18] - Adjusted gross profit was $340.3 million, a 26% increase year-over-year, with adjusted gross margin rising by approximately 70 basis points to 33.4% [17] Business Line Data and Key Metrics Changes - Comparable sales increased by 12.4%, driven by an 8.7% increase in transactions and a 3.4% increase in ticket size [16] - The company opened 32 net new stores, bringing the total to 1,858, an increase of 191 stores or 11.5% year-over-year [16] Market Data and Key Metrics Changes - Inventory at the end of the second quarter was approximately $800 million, up from $640 million a year ago, reflecting a 12% increase in average inventory per store [18][19] - The company expects elevated inventory levels at the end of the third quarter due to continued acceleration of receipts [19] Company Strategy and Development Direction - The company aims to be a gift destination for America, focusing on holiday assortments and leveraging both front and back store displays [28] - Simplification of pricing to whole price points has been implemented to enhance the shopping experience [10][11] - The company is committed to providing unique, trend-right products at amazing price points, with a focus on value despite industry-wide price increases due to tariffs [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position heading into the fall, with exciting plans for Halloween and the holiday season [13] - The company is focused on controlling risks and driving sales through executional excellence in a changing tariff environment [13] - Management noted that customer response to pricing adjustments has been positive, indicating a strong value proposition [38] Other Important Information - The company is diversifying its sourcing strategies and focusing on agility in response to global trade dynamics [83] - The company plans to open approximately 50 net new stores in the third quarter [19] Q&A Session Summary Question: Holiday assortment plans and Q4 guidance - Management is excited about holiday assortments and plans to create a holiday moment for customers, emphasizing gifting and decor [28][30] Question: Sustainability of comp sales growth - Management noted that comp momentum is strong across multiple product categories, reducing reliance on single trends [36] Question: New store productivity and growth - New store productivity is above 90%, and the company sees potential for reaccelerating store growth [49] Question: Impact of tariffs on gross margin - Management clarified that the impact of tariffs is lower than previously expected due to effective pricing adjustments and customer response [57][68] Question: Strategies for managing shrink and sourcing - The company is conducting physical inventory counts to manage shrink and is focused on accelerating receipts to ensure product availability [80][82]