Five Below(FIVE)2025-03-20 20:02Sales Performance - Comparable sales decreased by 2.7% in fiscal 2024, increased by 2.8% in fiscal 2023, and decreased by 2.0% in fiscal 2022[26] - Net sales increased from 3.9 billion in fiscal 2024, representing a compounded annual growth rate of 12.3%[26] - Net sales for fiscal 2024 reached 3,559.4 million in fiscal 2023[207] - Operating income for fiscal 2024 was 385.6 million in fiscal 2023[207] - Net income for fiscal 2024 was 301.1 million in fiscal 2023[207] - The gross margin for fiscal 2024 was 34.9%, down from 35.8% in fiscal 2023[207] Store Expansion - The store base expanded from 1,340 stores at the end of fiscal 2022 to 1,771 stores at the end of fiscal 2024, representing a compounded annual growth rate of 15.0%[26] - The company plans to open approximately 150 new stores in fiscal 2025, following the opening of 227 net new stores in fiscal 2024[23][29] - As of February 1, 2025, the company operated 1,771 stores across the United States, with plans to open approximately 150 new stores in fiscal 2025[39][46] - The company aims to expand its store base from 1,771 locations to more than 3,500 locations over time[216] - Total stores at the end of fiscal 2024 increased to 1,771, up from 1,544 in fiscal 2023[207] Product Categories - In fiscal 2024, the percentage of net sales for leisure products was 44.3%, down from 46.2% in 2023 and 47.6% in 2022[37] - Fashion and home products accounted for 30.2% of net sales in 2024, an increase from 29.3% in 2023 and 29.2% in 2022[37] - Snack and seasonal products represented 25.5% of net sales in 2024, up from 24.5% in 2023 and 23.2% in 2022[37] Distribution and Supply Chain - Approximately 85% of merchandise is distributed from five major shipcenters, with a total of over 5 million square feet of distribution space[58] - The company sources approximately 60% of its purchases from domestic vendors, working with around 1,000 vendors[56] - The company has expanded its distribution network, including a new 1,100,000 square foot shipcenter in Forsyth, Georgia, which began operations in the first half of 2024[119] - The company ceased operations at its shipcenters in Olive Branch, Mississippi, and Cincinnati, Ohio, in the first half of fiscal 2022 due to significant expansion of its distribution facilities[119] Financial Management - Capital expenditures for fiscal 2024 were 335.1 million in fiscal 2023[207] - Cash and cash equivalents as of February 1, 2025, were 179.7 million as of February 3, 2024[207] - The company repurchased 266,997 shares in fiscal 2024 at an average price of 40 million[204] - The new share repurchase program approved on November 27, 2023, allows for up to $100 million in common shares to be repurchased through November 27, 2026[204] Workforce and Crew Engagement - The company employs approximately 7,300 full-time and 15,900 part-time crew members, with a total crew count of around 23,200[86] - The company has a comprehensive suite of benefits for crew members, including medical, dental, vision, and a 401(k) retirement savings option[88] - The company emphasizes the importance of crew engagement, utilizing annual surveys to monitor and improve workforce engagement levels[96] Risks and Challenges - The company has experienced higher inflation levels during fiscal 2022, impacting product costs and potentially affecting net sales and earnings[105] - The company has identified risks related to inflation and commodity prices that could adversely affect its financial performance[105] - The company faces risks related to transportation disruptions, which could adversely impact sales or increase transportation costs, thereby decreasing profits[122] - Cybersecurity threats pose a risk to the company's operations, and any breach could lead to negative publicity and financial repercussions[126] - The company is exposed to risks from natural disasters, adverse weather, and geopolitical events, which could lead to lower sales and increased operating costs[149] Marketing and Customer Engagement - The marketing strategy focuses on digital advertising and community engagement to enhance brand awareness and drive traffic[67] - The company is expanding its e-commerce strategy through its website and mobile app, but faces risks related to customer acquisition and fraud associated with online transactions[145] Legal and Compliance - The company is subject to various legal proceedings, including a securities class action filed on August 1, 2024, alleging violations of the Securities Exchange Act[192] - The company is committed to compliance with labor and employment laws, ensuring a respectful and inclusive workplace[90] Inventory Management - The company’s inventory balance represented approximately 15% of total assets as of February 1, 2025, highlighting the importance of effective inventory management[136] - The company experienced a significant increase in inventory shrinkage, reaching higher than historic levels, which could negatively impact profitability and cash flows from operations[136] Corporate Governance - Environmental, social, and governance (ESG) matters are increasingly important, and the company's reputation may be affected by its performance in these areas[168] - The company's revolving credit facility contains covenants that may restrict operations and affect its ability to respond to business changes[160]