Five Below, Inc. · NASDAQ:FIVE
Five Below — Investor Presentation (April 2020)
40 slides from Five Below's investor presentation, April 2020
Slide 1: Investor Presentation - April 2020
1 investor presentation - april 2020
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 Below through the years
fiv˚ bE¬W through the years Then: In a local coffee shop, two friends and business partners, David Schlessinger (founder of Zany Brainy) and Tom Vellios, fuel their brainstorming for the next big retail concept. They land on an idea for the ultimate kids’ brand that will soon become Five Below! 2002
Slide 7: Five competitive differentiators
five competitive differentiators tween & teen handpicked, focus trend-right, wow products disciplined extreme high growth value fun, one-of-a-kind shopping experience led by a highly experienced management team 7
Slide 8: 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 8
Slide 9: Broad appeal across incomes with high dwell time
broad appeal across incomes with high dwell time customers average HHI: $73,000 shop frequently! shop 10x/ year $100,000+ 24% 38% $0 - $49,999 purchase ~60 items/ year spend $75,000 - $99,999 17% ~$150/ year 21% 8% < :10 mins $50,000 - $74,999 34% > :20 :10-:15 28% mins mins high average dwell time:
Slide 10: Tech. style. candy.
trend-right “wow” products at great value across 8 awesome worlds party. tech. sports. create. style. new & now. 10 candy. room.
Slide 11: 900 stores in 36 states at end of 2019
900 stores in 36 states at end of 2019 1st state in 2002 * (1) * new state net new year end * entry stores count 2012 +52 244 2013 +60 304 2014 +62 366 2015 +71 437 2016 +85 522 2017 +103 625 2018 +125 750 2019 +150 900 * distribution centers in Pedricktown, NJ, Olive Branch, MS, and Forsyth, GA. (1
Slide 12: 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 13: Our differentiated experience
our entiated diffe r . er ience exp amaz i n g ! 13
Slide 14: The purpose-driven value retailer for tweens & teens and beyond
THE purpose-driven value retailer FOR TWEENS & TEENS AND BEYOND knows life is way better when you’re free to in an filled with priced so low, you can always say to the 14
Slide 15: Unlimited possibilities driven by the newest, coolest stuff
unlimited possiblities driven by the newest, coolest stuff “craze” trends licensed trends & brands on-trend stuff (relevancy) 15
Slide 16: 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 17: We deliver our purpose with people!
we deliver our purpose with people! hi! welcome to five below! in our stores in our DC’s in our headquarters 17
Slide 18: Staying relevant with innovation
staying relevant with innovation reimagined front end! Five Beyond e-sports pilot 18
Slide 19: Our customers say yes! Follow us!
our customers us and say yes! “You can’t take me into Five Below “All the finer things in life. Great “If you can’t afford trendy stuff and expect me not to spend affordable accessories alllll the come to Five Below. #foryou #4u money. It’s just not that simple.” time!!! #vsco” Maria ratheruniquepro
Slide 20: 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! 20
Slide 21: Located in high traffic centers
located in high traffic centers Five Below visit was planned as the first stop in the shopping center* 54% 46% 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. *s
Slide 22: Proven success across diverse markets
proven success across diverse markets urban a suburban a semirural a • 701 Market St., PA •Pasadena, TX • Lake City, FL (Philadelphia DMA*) (Houston DMA*) (Jacksonville DMA*) • Washington D.C. • Redlands, CA • Dover, DE • New York, NY • Canton, OH • Tupelo, MS • Chicago, IL • Greensboro, NC • Abilen
Slide 23: Best in class new store metrics
best in class new store metrics (1) ~$450K strong average store ~150% ROI 4-wall EBITDA(2) Average ~$300K Low Average Net Investment (3) $2,136 $2,210 $1,986 $1,950 ~$1,950 payback period of less than 1 year! 24% 24% 24% 24% 25% year one sales 4-wall store EBITDA dollars in 2015 2016 2017 2018 2019
Slide 24: Consistent store performance across fleet in FY 2019
consistent store performance across fLeet in FY 2019 2,918 by region (1) 2,300 2,394 2,172 2,226 2,189 2,230 2,188 2,193 2,021 2,054 2,001 1,921 New England Upstate NY Metro Philly Metro Balt/DC Rust Belt Midwest Eastern Southeast Florida Texas California Grand Total (36) NY/PA (53) (60) (54) (99) (
Slide 25: The numbers
th e s. n um ber we ’ r e a l l about r e s u lt s ! 25
Slide 26: Disciplined and profitable growth
disciplined and profitable growth 2014 2015 2016 2017 2018 2019 5YR $1,847 CAGR(1) $1,560 net sales $1,278 $1,000 $832 22% $680 $217.3 $187.2 operating $114.0 $157.4 23% income * $77.9 $92.9 $149.6 $175.1 net income * $71.8 $102.5 29% $48.6 $57.7 $2.66 $3.12 eps * $1.30 $1.84 29% $0.89 $1.05 dollars
Slide 27: Over a decade of positive annual comps
over a decade of positive annual comps 2013 2014 2015 2016 2017 2018 2019 +6.5% +4.0% +3.9% +3.4% +3.4% +2.0% comp +0.6% avg. transaction +4.8% +1.4% +1.8% –0.4% +5.8% +0.8% –0.5% avg. ticket –0.8% +2.0% +1.6% +2.4% +0.7% +3.1% +1.1% store count (ye) 304 366 437 522 625 750 900 year store comp count
Slide 28: Strong business model drives self-funded growth
strong business model drives self-funded growth capex (1) strong cash position (2) includes new dc $337 $212 $262 $26 $245 includes new dc $102 includes new $114 home office includes $18 new dc $154 $68 $53 $13 $32 $6 $45 $99 $5 $5 $84 $20 $6 $64 $50 $27 $34 2015 2016 2017 2018(3) 2019(4) 2015 2016
Slide 29: 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 .. .
Slide 30: 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 30
Slide 31: Grow our store base
1 - grow our store base 2,500+ plan to cove continentalr the u.s. 150 new stores! about 1/ 3 of the way there! (1) AGR 900 3%C ~2 437 2020 215 states 2012 2015 2019 potential (1) at IPO YE YE • continued focus on densifying existing markets • largest states planned to be CA, TX, FL, NY and PA (1) ma
Slide 32: 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!) 32
Slide 33: 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 33
Slide 34: Increase brand awareness
3 - increase brand awareness TV DIGITAL Mobile Social ADvertising Advertising e-commerce infLuencers emma chamberlain brent rivera jacob sartorius mackenzie ziegler 34
Slide 35: Big opportunity in newer markets!
3 - increase brand awareness half of fleet is still big under 60% opportunity in awareness* newer markets! median market awareness 68% ~50% 59% 51% 43% 32% open open open open open <2 2-3 4-5 6-7 8+ years years years years years 26 markets 28 markets 26 markets 16 markets 29 markets *aided brand awa
Slide 36: Scale systems & infrastructure
4 - scale systems & infrastructure midwest dc coming in 2022 * pedricktown, nj DC opened 2015 west DC Forsyth, GA coming in 2021 DC opened 2019 new DC’s coming in 2020, 2021 olive branch, ms DC opened 2013 +2022 ! conroe, tx DC opening 2020 *e-commerce fulfillment center in OH acquired in 2019. 36
Slide 37: 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 38: 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 38
Slide 39: fivebelow.com
39 fivebelow.com
Slide 40: Appendix: Non-GAAP reconciliation
appendix: non-GAAP reconciliation 2014 net income $ 48.0 interest/other expense (income)(1) $ 0.4 income tax expense $ 28.6 operating income $ 77.0 expenses related to advent transaction: founders’ transaction(2) $ 0.9 total adjustments $ 0.9 adjusted operating income $ 77.9 net income $ 48.0 founde