Five Below, Inc. (NASDAQ:FIVE) Q4 2022 Earnings Call Transcript

Kenneth Bull: Yeah. And Scott, Five Beyond is a small portion of that increases. Other things that are driving that, obviously, customer preference, we had some strategic price increases and things like that. I think on an overall basis, when you look inside ticket, we see the increases in AUR, but really the — any type — if there’s any reduction in ticket, it’s coming from UPT, which I don’t think is dissimilar from what you’re private probably hearing from other retailers. And that’s kind of the pressure that consumers are under now given increasing prices tougher an environment for them. And so you see those tickets either staying the same on an overall basis or going down. So, if AUR is going up, you’re seeing declines from UPT. We’re pretty much similar to that over the last few quarters, and I think we’ve spoken about it that we’ve seen with our customer.

Joel Anderson: Yeah. And as I said on the previous question, we wouldn’t be accelerating our conversions into the Five Beyond prototype if we were seeing any concerns whatsoever. Thanks Scott.

Operator: The next question is from Michael Lasser with UBS. Please go ahead.

Michael Lasser: Good evening. Thanks a lot for taking my question. It’s a two-parter on the guidance. Number one, given that you did 200 models last year, 400 models this year, and you’re getting a mid single digit comp lift from those remodels. So, you’ll have essentially touched somewhere between a third and a half of the chain, presumably given you call it 150 to 200 basis points of comp contribution in 2023. So, is it reasonable to think outside of that you’d be comping — your guidance implies that you’ll be comping more like maybe downwind to two? And my follow-up question in that regard is if indeed you do have a negative comp, the macro proofs to be more precarious than what you thought, how low can your comp be? And you still hit the low end of your EPS guidance for this year. Thank you very much.

Joel Anderson: Yeah. And that first part of that, Michael, I think that I wouldn’t — I still wouldn’t put a negative. And I think it’s more like to say we would’ve probably been closer to a low single digit comp guide, which is traditionally where we’ve always been. Maybe with the uncertainty we would’ve went zero to three. And I think your range of about a hundred basis points, 150 might be a little high. I think that would be if they’re at the absolute high of the mid single digits that we gave you before, but that wasn’t contemplated in the guide. So, if you take a hundred base points guide for the conversions and traditional guide of low single digits, I think that’s why you see us up more at four instead of one to three or zero to three.

Kenneth Bull: Yeah. And then Michael, your question around relating EPS with the lowest comp, I mean, the guy that we provided, that’s where we feel right at a one comp, that’s where we’d land at the low end of the EPS. The one thing I’ll add to what Joel mentioned, at the low end, we’re assuming some type of kind of intensifying difficult environment for the consumer. If that were to happen, we would — there would probably be a negative impact on both stores and the results of conversions and existing stores. So, it could be a scenario where you do get lists, but just not as much as you expect based on the environment. But you never know where that’s going to land at the end of the day, but that’s kind of where — or what we were thinking about when we provided that guidance.

Joel Anderson: Thanks Michael.