Five Below (FIVE) Oppenheimer's 24th Annual Virtual Consumer Growth and E-Commerce Conference summary

Strategic growth and long-term outlook

• Emphasizes a robust new store pipeline and ongoing Five Beyond expansion, targeting 80% penetration by year-end.

• Maintains focus on positive comparable store growth and a debt-free balance sheet, enabling flexibility for long-term decisions.

• Long-term growth trajectory remains intact despite short-term challenges.

Short-term challenges and operational responses

• Addressing shrink through a shift from self-checkout to associate checkout, with early positive results.

• Experiencing a faster-than-expected consumer pullback in Q1, attributed to macroeconomic factors and low-end consumer spending.

• Actively testing pricing, marketing, and labor adjustments to identify and address internal factors impacting performance.

• Pricing tests involve about 100 stores, focusing on reducing prices in the front of stores to gauge customer response.

• Shrink mitigation efforts are largely self-funded, with incremental labor investments in high-shrink locations.

Merchandising, trends, and event-driven sales

• Traffic is driven by trends, licenses, and the Now section, with seasonal events like back to school, Halloween, and holidays being key.

• Licensed content and trends fluctuate, with Squishmallows previously driving significant traffic; headwinds from lack of strong trends are subsiding.

• Merchandising pipeline for upcoming seasons is strong, with particular confidence in back to school and Halloween assortments.

• Recognizes the need to reinvent summer seasonal offerings due to post-COVID consumer behavior shifts.