Slide 1: Investor Presentation January 2015
1 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 1 Investor Presentation January 2015
Slide 2: Forward-Looking Statements and Non-GAAP Measures
2 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 2 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which reflect management's current views and estimates regarding our industry, business strategy, goals an
Slide 3: Today's Agenda and Presenters
3 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 3 Introduction Company Overview and Differentiation Growth Opportunities Business and Financial Performance Agenda Presenters Joel Anderson President and CEO Ken Bull CFO Today's Agenda and Presenters
Slide 4: Priorities of Joel Anderson, President and CEO
4 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 4 ► Strong, diverse retail background ► Fully engaged in all aspects of the business ► Ongoing transition with Tom Vellios, Executive Chairman Priorities Joel Anderson, President and CEO ► Continue to grow our store base in new and existi
Slide 5: Experienced Management Team
5 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 5 Name Retail Experience (1) Tenure at Five Below (1) Background Tom Vellios Executive Chairman (2) 34 13 ► President and CEO at Five Below, President, CEO and Director of Zany Brainy and Senior Vice President of Merchandising at Caldor J
Slide 6: Our Achievements Since IPO
6 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 6 Our Achievements Since IPO... Financial Targets vs. Actual Performance ► 150+ new stores in existing markets and 4 new markets ► Positive comparable stores sales growth in every quarter ► Continued margin expansion despite merchandise a
Slide 7: Support Our Long-Term Plan
7 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 7 ...Support Our Long-Term Plan What We Have Learned ► Our core teen and pre-teen customers appreciate value ► Our unique store model is exportable across geographies at same or better paybacks ► Our increased scale is improving merchandi
Slide 8: Holiday Update
8 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 8 ► Post-Black Friday softness continued into early December ► Sales accelerated closer to Christmas and into post-holiday period ► Continued strong new store performance ► Well positioned to deliver on 2015 growth plans Holiday Update Ho
Slide 9: Company Overview and Differentiation
9 ©2014 Five Below, Inc. – Confidential©2014 Five Below, Inc. 9 Company Overview and Differentiation
Slide 10: Our Mission: The Five Below Promise
10 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 10 Our Mission: The Five Below Promise
Slide 11: Five Below Today
11 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 11 ► Rapidly growing specialty value retailer targeting teen and pre-teen customers ► Dynamic, edited assortment of trend-right, high- quality merchandise at exceptional value ► All merchandise priced at $5 or below ► Differentiated shop
Slide 12: Focus on the Teen and Pre-Teen Customer
12 ©2014 Five Below, Inc. – Confidential© 014 Five B low, Inc. 12 (1) Source: U.S. Census; reflects total population between ages 5 and 19. ► Teens and pre-teens represent an attractive customer segment – Sizeable population of 62 million(1) as of 2013 ► Teens and pre-teens are underserved by value
Slide 13: How We Deliver Value
13 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 13 Exceptional Value with $1 to $5 Model Investment in broad, deep merchandising team Strong sourcing capabilities Focus on high velocity, high margin products Benefits of economies of scale Low-cost operating philosophy How We
Slide 14: Edited Assortment of Trend-Right Merchandise
14 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 14 Edited Assortment of Trend-Right Merchandise
Slide 15: Major Brands and Licenses to Support Trends
15 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 15 Major Brands and Licenses to Support Trends
Slide 16: Broad Appeal Across Demographics
16 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 16 (1) Source: Third Party Research (Oct-2014); sample size of 1,444 customers (2) Represents annual income Representative Customer Demographics (1) 0 % 20 % 40 % 60 % 80 % 100 % By Gender By Age By Income (2) Male Female Adults w/ Kids
Slide 17: Differentiated Shopping Experience
17 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 17 ► Unique and engaging in-store atmosphere ► Stores are fun and dynamic ► Consistent floor layout with easy to navigate sightlines across entire store ► Novel merchandise display techniques Differentiated Shopping Experience
Slide 18: Growth Opportunities
18 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 18 Growth Opportunities
Slide 19: Summary Growth Opportunities
19 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 19 Continue to Grow Our Store Base Thrive as a Merchandise Driven Company Leverage Infrastructure to Drive Margins Build Digital Presence and Bolster Brand Awareness 1 2 3 4 Summary Growth Opportunities
Slide 20: Continue to Grow Our Store Base
20 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 20 Significant Store Growth Opportunity Ample White Space Disciplined Real Estate Strategy 67 215 366 2007 Store Count At IPO (2) Current Store Count (3) Potential (1) 2,000+► 2,000+ store potential(1) in the U.S. ► Experienced and prove
Slide 21: Thrive as a Merchandise Driven Company
21 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 21 ► Deep merchandising team includes two General Merchandise Managers, Head of Product Development and a new Head of Merchandising ► Leverage base of over 800 vendors ► Expanded overseas sourcing with 25% penetration in 2014 ► Increased
Slide 22: Leverage Infrastructure to Drive Margins
22 ©2014 Five Below, Inc. – Confidential© 014 Five B low, Inc. 22 Leverage Infrastructure to Drive Margins3 ► Our core competency ► Improved capabilities including response times ► Product development team in place Merchandising ► Distribution center in Olive Branch, Mississippi — 605,000 sq. feet —
Slide 23: Build Digital Presence and Bolster Brand Awareness
23 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 23 ► Build brand awareness with engaging digital and TV media ► Growth in social media channels with teen-centric content ► Drive traffic with large email database ► Develop ecommerce capabilities ► Current brand awareness level presents
Slide 24: Video
24 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 24 Video
Slide 25: Business and Financial Performance
25 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 25 Business and Financial Performance
Slide 26: Compelling New Store Performance
26 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 26 ► Success spans both new & existing markets ► Consistent results across vintages ► EBITDA margin > 20% ► Low capital investment and strong EBITDA yields a payback of less than one year Year 1 New Store Sales & EBITDA Dollars in thousa
Slide 27: Consistent Results Across States
27 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 27 27 FY 2013 AUV by State (1) (1) Represents fiscal 2013 AUV for "large stores". Includes class of 2013 AUV projections. States with fewer than 3 stores (WV) have been combined with adjacent states. For 2013 class, results include, on a
Slide 28: Positive Comps in Varied Economic Environments
28 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 28 Annual 7.9% 7.1% 4.0% ~3% Positive Comps in Varied Economic Environments 7.6 % 0.7 % 7.6 % 12.1 % 10.4 % 8.6 % 8.8 % 4.4 % 4.2 % 6.6 % 9.0 % 0.3 % 6.2 % 3.2 % 1.5 % ~3 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4E 2011 2012 2013
Slide 29: Financial Performance
29 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 29 Number of Stores Comparable Store Sales Net Sales Adjusted Operating Income CAGR 32 % 33 % 24 % Dollars in millions. 2014 estimated. Financial Performance Notes: 192 244 304 366 2011 2012 2013 2014E 7.9 % 7.1 % 4.0 % ~3 % 2011 2012 20
Slide 30: New Store Economics
30 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 30 30 Dollars in thousands. (1) Year one economics include results for first full 12 months (2) Excludes distribution, buying and pre-opening costs (3) Includes store build out (net of tenant allowances), inventory (net of payables) and
Slide 31: Capital Investments Over Time
31 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 31 Dollars in millions. 2014 estimated 2011 ► Business Intelligence System ► Warehouse Management System 2012 ► Human Resources Information System (phase 1) ► New Corporate Offices 2013 ► 2nd Distribution Center ► Mobile Store Systems ►
Slide 32: Solid Balance Sheet
32 ©2014 Five Below, Inc. – Confidential© 014 Five B low, Inc. 32 Dollars in millions. (1) Calculated as Operating Cash Flow less Capital Expenditure (2) LTM represents last twelve months ended November 1, 2014. ► Ample liquidity ► Strong free cash flow generation ► Self-funded growth ► Currently de
Slide 33: Summary
33 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 33 Unique Approach to Targeting the Teen and Pre-Teen Customer Edited Assortment of Trend-Right, High-Quality Merchandise Drives Universal Appeal Exceptional Value Proposition for Customers with $1 to $5 Model Differentiated Shop
Slide 34: Financial Appendix
34 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 34 Financial Appendix
Slide 35: Non-GAAP Reconciliation
35 ©2014 Five Below, Inc. – Confidential©2014 Five B low, Inc. 35 Non-GAAP Reconciliation FY 2011 FY 2012 FY 2013 FY 2014E Net Income $ 16.1 $ 20.0 $ 32.1 $ 47.7 Interest / Other Expense (Income)(1) (0.0) 3.6 1.8 0.4 Income Tax Expense 10.2 14.1 19.8 28.9 Operating Income $ 26.2 $ 37.7 $ 53.7 $ 77.0