Five Below, Inc. (NASDAQ:FIVE) Q2 2019 Earnings Conference Call - Final Transcript

Aug 28, 2019 • 04:30 pm ET

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Five Below, Inc. (NASDAQ:FIVE) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Joel D. Anderson

Really a couple of things going on there, there is a piece of that that's going to be the actual tariff cost themselves that are up in cost of goods sold. And then there is preparatory costs for the price changes that Joel mentioned going taking place in the fourth quarter cost around associate training signage, things like that. So they're going to have a little bit in cost of goods sold a little bit down in SG&A.

So the net of that amount that unmitigated amount we expect based on the pricing increases that we're going to put into place in Q4, as evidenced in the high end of our guidance range that we would mitigate those plus more obviously to put ourselves in a position from a full year position at the high end of guidance that we would fully mitigate all the tariff costs that we're experiencing.

Analyst
Charles Grom

Thanks, Joel.

Operator
Operator

Our next question comes from Matthew Boss from JP Morgan. Please go ahead with your question.

Analyst
Matthew Boss

Great. Thanks. Joel, maybe as you look at the back half of the year in the holiday assortments, how would you rank the opportunities you see across your eight worlds versus a year ago? And maybe how best to size up the license backdrop in the position you think you're in today may be versus the last time we saw a licensing opportunity like this.

Executive
Joel D. Anderson

Yeah, Matt, I think for us, it goes back to the bigger statement as we've kind of explained crazes to everybody, and I think what I explain trends and one of them is crazes, one of them is license and the third one is relevancy and clearly what is shaping up for the back half of the year is a license trend, we saw a little bit of that emerge with a couple of the movie breaks this summer, Toy Story 4, Lion King, et cetera, but clearly I think everybody's anxious for Frozen 2, it's been six years since the last one, there'll be whole new set of customers that haven't been exposed to Frozen 2, unlike Star Wars, which is kind of comes out every year, this is a really unique opportunity. I think what's unique and different on top of that for us is six years ago in '13 when that came out and then spilled into '14 we were a much smaller company. And this year our buy for Frozen is much more planful and strategic. And so we're really excited about the impact Frozen -- potentially have on the back half of the year it impacts our toy business our create world, our tech world. So it's a pretty broad-based impact on the business.

Analyst
Matthew Boss

Great. Best of luck.

Executive
Joel D. Anderson

Thanks, Matt.

Executive
Kenneth R. Bull

Thanks, Matt.

Operator
Operator

Our next question comes from Edward Kelly from Wells Fargo. Please go ahead with your question.

Analyst
Edward Kelly

Yeah, hi guys, good afternoon. I just wanted to -- I wanted to ask you go about the cadence of the comp guidance, so