Slide 1: Investor presentation - March 2019
investor presentation - March 2019
Slide 2: Forward looking statements
forward looking statements 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 and expectations concerning our market
Slide 3: Our story... read on!
our story... read on! about fiv˚ bE¬W ® our differentiated experience our powerful store model the numbers our vision for growth 3
Slide 4: About Five Below
a bo ut five . be lo w ch ec k i t out ! 44
Slide 5: Five Below is a unique investment opportunity
fiv˚ bE¬W is a unique investment opportunity leading high growth value retailer long runway for unit growth compelling new store model consistent performance benefits from scale 5
Slide 6: Five distinctive growth drivers
five distinctive growth drivers tween & teen handpicked, focus trend-right, wow products disciplined exceptional value high growth $5 & below fun, differentiated shopping experience led by a highly experienced management team 6
Slide 7: Tween & teen-focused with broad customer appeal
tween & teen-focused with broad customer appeal target customers Gen Z Millennial / Gen X 8–14 yr olds 24–44 yr olds Girls & Boys Parents 7
Slide 8: Tech. room. candy.
trend-right “wow” products at great value across 8 awesome worlds party. tech. sports. create. room. now. 8 candy. style.
Slide 9: By 2019YE, ~900 stores in states
by 2019YE, ~900 stores in 36 states * 1st state * (1) * * new state net new year end entry stores count 2012 +52 244 2013 +60 304 36th state 2014 +62 366 2015 +71 437 2018 revenue 2016 +85 522 2017 +103 625 2018 +125 750 * distribution centers in Pedricktown, NJ, Olive Branch, MS and Forsyth, GA 201
Slide 10: Growth led by experienced leadership
growth led by experienced leadership executive role year joined experience tom vellios Chairman & Co-Founder Co-founded 2002 Zany Brainy, Caldor/May Company joel anderson President & Chief Executive Officer 2014 Walmart, Lenox, Toys ‘R Us ken bull Chief Financial Officer & Treasurer 2005 Urban Outfi
Slide 11: Our differentiated experience
our entiated diffe r . er ience exp amaz i n g ! 11
Slide 12: Purpose-driven value retailer for tweens & beyond
THE purpose-driven value retailer FOR TWEENS & BEYOND knows life is way better when you’re free to in an a ma z in g e x p e r ie n c e filled with p os s i b i l i t i es unlimited priced so low, you can always say yes! to the n e w est, c oo l est st u f f! 12
Slide 13: Unlimited possibilities driven by the newest, coolest stuff
unlimited possiblities driven by the newest, coolest stuff “craze” trends licensed trends & brands our own on-trend stuff (relevancy) 13
Slide 14: An amazing, fun experience
an amazing, no one else does fun experience what we do in an 8,500 sq. ft. store! unique and engaging in-store atmosphere fun and dynamic with friendly “wow crews” and upbeat music easy-to-navigate with vibrant signs and low sightlines across the store iconic fixtures that encourage interaction with
Slide 15: We deliver our purpose with people!
we deliver our purpose with people! Hi! Welcome to Five Below! 15
Slide 16: Our customers say yes!
our customers us and say yes! “I went to #fivebelow for the first “ you bring time to look for a phone case and so much happiness “@fivebelow is the #LouisVuitton came out with a rug and a disco and joy to people! of dollar-stores... the best.” ball hahaha that store” Ashley @fivebelow best @Dibble_
Slide 17: Our powerful store model
ou r ul po w er f s to re mo d e l . WHEREON TH E A C T I IS! 17
Slide 18: Located in high traffic centers
located in high traffic centers Five Below visit was the first stop in the shopping center 45% 55% Five Below visit came after another stop in the center • currently lease all store locations. • average 8,500 sq. ft. per store. • majority 10-year initial terms with options to extend. source: may 201
Slide 19: A proven success across diverse markets
proven success across diverse markets urban a suburban a semirural a • Chestnut St, PA •Pasadena, TX • Lake City, FL (Philadelphia DMA) (Houston DMA) (Jacksonville DMA) • Philadelphia, PA • Redlands, CA • Dover, DE • Washington D.C. • Canton, OH • Tupelo, MS • New York, NY • Pasadena, TX • Lake City
Slide 20: Best in class new store metrics
best in class new store metrics (1) ~$450K strong average store ~150% R.O.I. 4-wall EBITDA(2) Average ~$300K Low Average Net Investment (3) $1,976 $1,986 $2,136 ~$2,200 $1,950 year one sales 4-wall store EBITDA dollars in thousands 24% 24% 24% 24% 24% payback period of less than 2014 2015 2016 2017
Slide 21: Consistent store performance across fleet in FY 2018
consistent store performance across fLeet in FY 2018 2,790 by region (1) 2,474 2,405 2,162 2,214 2,196 2,206 2,187 2,145 2,058 2,082 1,956 1,954 New England Upstate NY Metro Philly Metro Balt/DC Rust Belt Midwest Eastern Southeast Florida Texas California Grand Total (34) NY/PA (48) (56) (51) (95) (
Slide 22: The numbers
th e s. n um ber we ’ r e a l l about r e s u lt s ! 22
Slide 23: Disciplined and profitable growth
disciplined and profitable growth 2013 2014 2015 2016 2017 2018 5YR CAGR(1) $1,560 net sales $1,000 $1,278 $832 $535 $680 24% operating $157.4 $187.2 income* $92.9 $114.0 $77.9 25% $60.8 net $149.7 income* $71.8 $102.5 32% $48.6 $57.7 $36.9 eps† $2.66 $1.84 $1.05 $1.30 31% $0.89 $0.68 dollars in mil
Slide 24: Over a decade of positive annual comps
over a decade of positive annual comps 2012 2013 2014 2015 2016 2017 2018 +7.1% +6.5% +4.0% +3.9% +3.4% +3.4% +2.0% comp avg. transaction +6.9% +4.8% +1.4% +1.8% -0.4% +5.8% +0.8% avg. ticket +0.2% -0.8% +2.0% +1.6% +2.4% +0.7% +3.1% store count (ye) 244 304 366 437 522 625 750 year store comp count
Slide 25: Strong business model drives self-funded growth
strong business model drives self-funded growth $114 includes new capex (1) home office $18 includes free cash flow (2) new D.C. $100 includes $68 new D.C. $62 $70 $13 $32 $53 $6 $45 $5 $5 $32 $20 $6 $35 $3 $8 $50 $64 $29 $27 $34 $21 2014 2015 2016 2017 2018 (3) 2014 2015 2016 2017 2018 stores distr
Slide 26: Our vision for growth
ou r or io n vis th. f gr o w fu t u r e ’ s so br i g h t .. . 26
Slide 27: 20/20 vision for continued disciplined growth thru 2020
20/20 vision for continued disciplined growth thru 2020 20% sales growth 20%+ net income growth 750+ stores & growing! note: assumes a 52-week basis 27
Slide 28: Strategic growth priorities
strategic growth priorities 1 grow our store base – 2 our largest growth driver reinvest in 3 “wow” merchandise 4 increase brand awareness scale systems & 5 infrastructure build our team & culture 28
Slide 29: 1 - Grow our store base
1 - grow our store base ~150 new stores! 2,500 about 1/ 3 1st state (1) of the way 2002 there! AGR ~900 3%C ~2 750 2019 215 rd states 33 state 2018 2012 2018 2019e potential (1) at IPO YE YE • over a decade of growth • continued focus on densifying existing markets • cover continental U.S. • largest
Slide 30: 2 - Reinvest in wow merchandise
2 - reinvest in “wow” merchandise trend-driven merchandising team ongoing reinvestment in products global sourcing with over 800 vendors low-cost operating philosophy balls ship deflated without packaging (we don’t ship air, so you save!) 30
Slide 31: Benefits of scale!
2 - reinvest in “wow” merchandise benefits of scale! micro r/c quadcopter! whoa $5 2017 exclusive marvel® flying figure yep, just $5 le cyc infrared helicopter c t still just $5 o du pr R /C r/c car just $5 2012 31
Slide 32: 3 - Increase brand awareness
3 - increase brand awareness print tv mobile/social e-comm 2002 2014 2016 2017 32
Slide 33: Big awareness opportunity!
3 - increase brand awareness aided brand awareness* top dma’s 56 markets (open 2+ years) aided brand awareness 61% 58% Philadelphia 75% 45% Detroit 66% Boston 55% Houston 47% Orlando 47% spring 2015 spring 2017 spring 2018 New York 46% big Dallas 42% awareness Tampa 38% opportunity! Miami 33% Los An
Slide 34: Customers: broad appeal across incomes, shop frequently
3 - increase brand awareness customers broad appeal shop frequently! across incomes average HHI $80,000 shop 10x/ year 28% $0 - $49,999 $100,000+ 27% purchase ~60 items/ year 17% spend ~$150/ year 22% $75,000 - $99,999 6% $50,000 - $74,999 n/a 11% < :10 25% > :20 mins mins high dwell times in a fun,
Slide 35: 4 - Scale systems & infrastructure
4 - scale systems & infrastructure midwest DC pedricktown, nj DC open since 2015 west coast DC Forsyth, GA DC open since 2019 new DC’s coming in southwest DC olive branch, ms 2020 DC open since &2021! 2013 35
Slide 36: Create an awesome experience to deliver long-term growth!
5 - build our team & culture create an awesome experience to deliver long-term growth! culture. talent. scale. • bring our purpose • attain and retain • evolve oranizational “let go & have fun” to life top-tier leaders structure to drive throughout the company continued growth • foster best-in-class
Slide 37: Five Below is a unique investment opportunity
fiv˚ bE¬W is a unique investment opportunity leading high growth value retailer long runway for unit growth compelling new store model consistent performance benefits from scale 37
Slide 38: fivebelow.com
38 fivebelow.com
Slide 39: Appendix: non-GAAP reconciliation
appendix: non-GAAP reconciliation 2013 2014 net income $ 32.1 $ 48.0 interest/other expense (income)(1) $ 1.8 $ 0.4 income tax expense $ 19.8 $ 28.6 operating income $ 53.7 $ 77.0 expenses related to advent transaction: founders’ transaction(2) $ 6.1 $ 0.9 secondary public offereing fees(3) $ 1.0 $