Five Below, Inc. (FIVE) CEO Joel Anderson Presents at 2022 ICR Conference (Transcript)

Five Below, Inc. (NASDAQ:FIVE) 2022 ICR Conference Summary Company Overview - Company: Five Below, Inc. - Industry: Retail (Discount Retailer) - Date of Conference: January 10, 2022 Key Drivers and Performance - Strong Holiday Season: Five Below reported a successful holiday season, achieving a 7.6% comparable store sales increase on top of a 10.1% increase from the previous year, marking the best two-year stack since going public [8] - Supply Chain Management: The company effectively navigated supply chain challenges by bringing in products early, which allowed for timely distribution despite some late arrivals [3][4] - Product Trends: Notable product drivers included Squishmallows and sensory products like poppers, alongside strong sales in games and toys [4] Supply Chain Insights - Proactive Strategies: The team locked in container rates and capacity for the long term, which helped mitigate supply chain disruptions [12][13] - Port Congestion: While congestion issues persisted at some ports, Five Below managed to maintain a favorable inventory position, achieving record sales despite some delivery delays [13][20] - Inventory Management: The company prioritized seasonal products, ensuring timely availability for high-demand items, which contributed to strong sell-through rates [20] Inflation and Pricing Strategy - Inflation Mitigation: Five Below believes it is well-positioned to manage inflation through scale, innovation, and value offerings. The company has invested in its distribution network to reduce costs [24][25] - Pricing Adjustments: The company has successfully increased prices on certain products without significant customer pushback, indicating strong demand and customer acceptance [27] Five Beyond Initiative - Expansion of Five Beyond: The new product assortment, Five Beyond, is performing well, with customers spending approximately 2.5 times the average on these products during the holiday season [30] - Positive Customer Response: Testing higher price points (up to $25) showed no significant resistance from customers, suggesting strong market acceptance [30] Future Growth and Strategy - Long-Term Growth Plans: Five Below plans to update its long-term store target, currently at 2,500 stores, indicating potential for further expansion [36] - Capital Allocation: The company is focused on reinvesting cash into growth initiatives, including new store openings and distribution centers, while also considering opportunistic share buybacks [40][41] Customer Engagement Initiatives - Tokenization and Customer Insights: Five Below is implementing tokenization to better understand customer preferences, which will inform future initiatives like loyalty programs and enhanced shopping experiences [43][44] Conclusion - Positive Outlook: Five Below expressed confidence in its strategies and performance, with plans to share more detailed insights during the upcoming March meeting [44]