But I do have expectations that, that penetration will continue to increase as the customers really responding positively to this new format of Five Below in the front, Five Beyond in the back, and keeping that separation. And now we’ve got to keep growing both just like John Heinbockel was asking about Five Below and you’re asking about Five Beyond, I think both of those are upsides for many years to come. Thanks Jeremy.
Operator: The next question is from Krisztina Katai with Deutsche Bank. Please go ahead.
Krisztina Katai: Hi, good afternoon. Joel, I wanted to ask you to talk about the product pipeline, both for holiday and going into 2024. I know you’re not providing guidance for next year, but a lot of general merchandise categories are now deflationary, consumables could potentially move in that direction. So, I was wondering if that is opening up any new avenues for you from a merchandising perspective?
Joel Anderson: Well, somewhere I thought you were going with that, Krisztina, I thought you’re talking about is it going to be a negative to us being deflationary. I – it’s more of the question I was answering a couple of questions ago about the inputs into it. And those are deflationary that will benefit us. And at the same time, that will also allow us to reinvest some of those gross margin wins back into the product like we’ve done for years. I think the other big opportunity is we’re seeing significant capacity overseas in terms of containers, and that also is a nice input into the gross margin line. So, all-in-all, everything is pointing a little bit to at least steady, if not deflationary. And some of that will flow through and others of it will take to improve the product quality. Thanks Krisztina.
Operator: The next question is from Michael Montani with Evercore ISI. Please go ahead.
Michael Montani: Hi guys. Thanks for taking the question. I just wanted to ask about the store growth outlook into next year and beyond. Do we feel that we’re in a point to do kind of high teens growth? Or is there some constraints we need to consider there? And then secondly, there’s some fascinating initiatives, right, in terms of helium, piercings, potential for loyalty. Just kind of love to get your latest thinkings and learnings from those things?
Joel Anderson: Yes. Look, as I said in my prepared remarks, the store growth pipeline is really in a great spot, it hasn’t been in that spot in four years. There’s two angles we’re focused on. One is getting the pipeline full and the other is getting back to closer to a 50-50 opening cadence first half to second half. And both those, the teams have made great progress on and we’ll be in great shape for next year and 2025. But in terms of exact counts and that type, you’re probably a tide high on the count. I think we’ve kind of indicated more mid-teens over the last couple of calls, and then we’ll give you exact numbers at either ICR or your beginning call. And then everything else you pointed to is it’s just more upside. Helium balloons, ear piercing, those services, loyalty, again, those just are all incremental as we continue to look at this thing long-term and beyond. Thanks, Michael.
Operator: The next question is from Brad Thomas with KeyBanc Capital Markets. Please go ahead.
Brad Thomas: Hi, good afternoon. Joel, as we look at your results relative to what we’re hearing across the retail landscape, what really stands out is nearly every retailer is calling out discretionary categories as being down in some cases, down very significantly. And so I think your results really do stand out here. I was wondering if you could just talk a little bit more about what you may be seeing from kind of a cyclical perspective. Are you seeing repeat customers pulling back on the average ticket size? How much are you seeing maybe in terms of trading down and new customers coming in, trying to stretch a buck? What are you seeing maybe that puts more into context why you’re all doing so well right now? Thanks.
Joel Anderson: Thanks, Brad. I think that it speaks to why a couple of questions ago about units per transaction. I mean certainly, that’s a sign that the customer is being very discerning. And that’s why you’ve got to win with transactions or traffic, which has been very positive. I think why we’re winning with discretionary, and I said in my prepared remarks, Q1 through 3 is our store is largely a store wants. In Q4 starts in October, our stores a store needs. And the last place history has shown my long tenure in the kids space, is that parents cut out on their kids. And so nieces and nephews and grandparents and parents are certainly worried about stretching their dollars further and we’re seeing the trade down. But as we look at what we’re seeing here in Q4, we’re a destination for value, and that’s resonating really nice with the customer.
Operator: The next question is from Chuck Grom with Gordon Haskett. Please go ahead.
Chuck Grom: Hi, thanks a lot. And Joel, hope you still better you stands a little under the weather. I’m curious if you can maybe shine a little light into your conversation with Michael that you held a couple of hours ago, if you will, in terms of what he’s seeing from suppliers and are they starting to innovate more after a couple of years of just trying to plow through unit volumes. Just curious what you’re seeing on that front? And anything from a trend that has you excited?
Joel Anderson: Yes, I am finding a little bit of a cold there Chuck and look, I think, while I never give away any secrets with Michael, any of you that have toured stores with him, know he’s never had a lack of ideas and this is some of the most upbeat I’ve seen to merchants. Don’t forget, we just opened our India office this year. I was out there personally about a month ago with Michael for the kickoff to that. We had over 50 factories there. It’s another example that will help us innovate. It will help us move faster. It will help us keep costing down and it really starts to spread out our supply chain to other countries. And so that’s just one example where Michael is excited. But I think like always, our 8 worlds allow us to kind of really ebb and flow from one category to the next as trends change.
And I called out several of those trends in my prepared remarks. And – but the merchants are excited and they’re already – I was down in our mock store today, and we’re looking at back-to-school for next year. So, we’re well ahead of 2024 on the merchandise cycle. And a lot of positive stuff out there that, obviously, Chuck, I can’t get into the specifics, but they feel really good about. Thanks Chuck.
Operator: The next question is from Kate McShane with Goldman Sachs. Please go ahead.
Kate McShane: Hi, good afternoon. Thanks for taking our question. I just wanted to ask about the competitive landscape. It seems like at least in the mass channel that they are focused on a particular price point and lower more signage and marketing around that than I believe I’ve seen the last couple of years. Just wondered how you’re thinking about your positioning in the competitive landscape. Obviously, there’s the value component of Five Below. But just with regards to what you’re seeing from other competitors, any insight there? Thank you.
