Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What is your opinion on the overall health of the consumer, and how are you accounting for potential changes in consumer behavior due to factors like inflation and SNAP benefits? A: Winnie Park, CEO, stated that they are pleased with the sales performance and trends, noting no significant changes in consumer spending habits. Kristy Chipman, CFO, added that their guidance considers a range of scenarios, including the challenging macroeconomic backdrop and mitigation strategies for tariffs.
Q: How are tariffs expected to impact margins, and what mitigation strategies are in place? A: Kristy Chipman, CFO, explained that they anticipate a 100-basis-point impact from tariffs for the full year, with mitigation efforts including vendor negotiations, selective price adjustments, and diversification of sourcing. Winnie Park, CEO, emphasized their ability to chase trends and newness as a competitive advantage in addressing tariffs.
Q: How do you plan to recover margins lost due to tariffs, and what happens if tariffs are removed? A: Winnie Park, CEO, clarified that price adjustments are focused on items $5 and below, ensuring value and relevance. Kristy Chipman, CFO, noted that if tariffs remain, they expect to leverage improvements in shrink rates and operational efficiencies to recover margins over time.
Q: What is the status of new product development, and how do you plan to optimize marketing spend? A: Winnie Park, CEO, expressed excitement about summer assortments, focusing on value and outdoor play. She highlighted the importance of optimizing marketing spend with the new Chief Marketing Officer to enhance customer engagement and drive traffic.
Q: What is your evaluation of the Five Beyond section, and how are you addressing shrink? A: Winnie Park, CEO, sees Five Beyond as an opportunity to feature big WOW items and ensure value in products above $5. Kristy Chipman, CFO, mentioned a 100-basis-point increase in shrink accrual since 2019, with ongoing efforts to improve shrink rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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