Thomas G. Vellios - Co-Founder, President and CEO Kenneth R. Bull - CFO, Secretary and Treasurer Farah Soi - ICR

John Heinbockel - Guggenheim Securities Dan Binder - Jefferies & Company Charles Grom - Sterne Agee Paul Trussell - Deutsche Bank Michael Lasser - UBS Meredith Adler - Barclays Capital John Zolidis - Buckingham Research Christian Buss - Credit Suisse Matthew Nemer - Wells Fargo Jeremy Hamblin - Dougherty and Company Patrick McKeever - MKM Partners

Good day, everyone, and welcome to the Five Below Third Quarter Earnings Conference. Today's conference is being recorded. At this time, I'd like to turn things over to Farah Soi of ICR. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thanks for joining us today for Five Below's third quarter 2013 financial results conference call. On today's call are Tom Vellios, Co-Founder and Chief Executive Officer; and Ken Bull, Chief Financial Officer, Secretary and Treasurer. After management has made their formal remarks, we will open the call to questions. I need to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and Five Below's SEC filings. The forward-looking statements made today are as of the date of this call and we do not undertake any obligation to update our forward-looking statements. Finally, we may refer to certain adjusted or non-GAAP financial measures on this call. A reconciliation schedule showing the GAAP versus non-GAAP financial measures is available in our press release issued today. If you do not have a copy of today's press release, you may obtain one by visiting the Investor Relations page of our website at www.fivebelow.com. I will now turn the call over to Five Below's Co-Founder and Chief Executive Officer, Tom Vellios. Thomas G. Vellios: Thank you, Farah, and thanks everyone for joining us for our third quarter earnings call. I'll begin the discussion with highlights of our third quarter results and Ken will then review our financial results in more detail, afterwards we'll provide some closing comments before we open up the call to your questions. Q3 was another solid quarter driven by continued strong performance of our new stores as well as a better than expected comp store sales increase of 9%. Our comp performance was driven by a solid core business, a comparison against Hurricane Sandy, which was baked into a mid single digit comp guidance and upside fueled by the rubber band trend. We delivered a 28% increase in sales, 35% increase in adjusted operating income and adjusted EPS for the quarter of $0.05 as compared to $0.03 a year ago. We opened 28 new stores in Q3 to end the quarter with 304 stores. We continue to see the 2013 class enjoy strong performance across both new and existing markets. As you know, we entered the Texas market in Q2 and had the largest single day grand opening in Q3 when we opened 11 stores in Dallas in one day. We've only been in Texas for a few months now, but we are pleased with the initial results in this region and we believe that it indicates another successful new market entry for Five Below. We are making great progress with our class of 2014 stores, which we will discuss in more detail during our Q4 call, but we expect to continue to open the majority of our new stores in existing markets for 2014. As we look to Q4 and our guidance that Ken will review with you momentarily, it is important to keep in mind that this is the most compressed holiday season in 10 years. In addition, the days leading up to Christmas are when we do a large portion of our holiday selling. And importantly, the band and Loom trend, which positively impacted Q3 sales, we believed has moderated due in part to a very, very broad distribution base. All these dynamics in addition to our performance quarter-to-date have been factored into the Q4 outlook that we are providing. As I sit here today, I am excited about the future prospects for Five Below. We believe that the tremendous store growth opportunity that we will realize over the coming years and in order to help support this expansion, we will continue to invest in infrastructure to further strengthen our foundation. These investments will be made across the company, with particular focus in the areas of people, distribution and system. On the distribution front, we are pleased with the progress we've made with our Olive Branch DC. Now obviously the true test of the facility will be our peak holiday shipping season, but that said, operations are tracking in line with our expectations and we will continue to increase utilization in the quarters ahead as the facility supports our expansion. Our existing New Castle, Delaware facility continues to service extremely well and given the density of stores and services and the significant opportunity for further expansion of these markets, we are evaluating our future distribution requirements for this region. We've started looking at our options and we anticipate a need for increased capacity in the foreseeable future to support our large and growing store base. In order to create a best-in-class infrastructure to fully realize the tremendous opportunity we have, we must continue to invest in our people. They are our most valuable asset and in addition to hiring new talent, we need to invest in tools and resources to cultivate, train and develop the considerable talent that we have here at Five Below. These investments strengthen our ability to continue to continue to deliver what is so important to Five Below; the ability to allow our customers with amazing product and our great store experience. Our ability to capitalize this past quarter on the rubber band trend and get a $5 Loom in stores is just one example that illustrates the speed and agility of this organization and the incredible job our people do every single day. This enables us to bring to market compelling product at outstanding values, in order to continue to fulfill our mission of delighting our customers when they walk into the Five Below stores. So in summary, we are pleased with our third quarter performance. We successfully completed our planned store opening for the year. Q3 was our 30th consecutive quarter of positive comps, our Olive Branch distribution center is fully operational and Q4 ready and our merchants, store associates and the entire organization have done a great job getting our stores ready for holiday. A lot has been accomplished year-to-date and I'll take a moment to thank the entire Five Below team to a job well done. With that, I'll turn the call over to Ken to go over our results for the quarter and to discuss our guidance. Ken? Kenneth R. Bull: Thanks, Tom, and good afternoon, everyone. I will begin my remarks with a review of our third quarter results and then discuss our outlook for the remainder of fiscal 2013. We increased our sales in the third quarter by 27.9% to $110.7 million from the $86.6 million we reported in the third quarter last year. We ended the quarter with 304 stores, a net increase of 61 stores or 25% versus the 243 stores we had as of the end of the third quarter of 2012. Q3 was a very busy quarter from a new store opening perspective, with 20 net new openings including six in the last two days of the quarter. Comparable store sales for the quarter increased by 9% versus an 8.8% increase in the third quarter last year. This comp increase was driven by transactions and was aided by both the benefit of the Hurricane Sandy event and the rubber band trend. Gross profit increased 27.1% in the quarter to $34.2 million from the $26.9 million reported in the third quarter of fiscal 2012. Gross margin decreased by approximately 20 basis points to 30.9% from the 31.1% reported in the year ago period. The decrease in gross margin was driven by the expected deleverage of distribution expenses, and the timing of preopening [event] as we opened 28 net new stores this quarter as compared to 17 openings in the third quarter last year. This deleverage was partially offset by higher merchandized margins and occupancy expense leverage associated with the higher than planned comp. SG&A expense of $31.2 million increased 24.2% from the $25.1 million reported in the third quarter of fiscal 2012. As a percentage of sales, SG&A decreased to 28.2% from 29%. Excluding the $1.5 million in founders' transaction expenses that we recorded in the third quarter of 2013 and 2012, adjusted SG&A in the third quarter of 2013 was $29.7 million or 26.8% of sales as compared to $23.6 million or 27.2% of sales in the third quarter of last year. The decrease in adjusted SG&A as a percent of sales was due partly to lower marketing expense as a result of a planned shift in Q4. In addition, there was leverage on the fixed portion of SG&A associated with a 9% comp, partially offset by higher preopening expenses year-over-year. Our GAAP operating income was $3 million. Excluding the $1.5 million in founders' transaction expenses that were recorded in the third quarter of 2013 and 2012, adjusted operating income for the third quarter of 2013 was $4.5 million, which was a 35.2% increase from last year's adjusted operating income of $3.4 million. As a percentage of sales, adjusted operating margin was 4.1% compared to 3.9% for the same period last year with the increase driven by the gross margin and SG&A factors I just described. Our effective tax rate for the quarter was 37.9% compared to 43.2% in the third quarter of 2012. The decline was due primarily to lower effective state tax rates resulting from our business restructuring in 2013 and certain discrete items in last year's third quarter Before I discuss net income, I want to point out that for the quarter to date and year-to-date periods, I will be referring to adjusted net income and EPS that excludes the impact of the founders' transactions for the quarter-to-date period and that excludes the impact of the founders' transaction and secondary public offering fees for the year-to-date period. A reconciliation of GAAP net income and net income per share to these adjusted numbers on an adjusted weighted share basis can be found in the financial tables included in our earnings press release issued today. As a result of the factors I just described, adjusted net income for the quarter was $2.6 million or $0.05 per share based on 54.5 million adjusted diluted weighted average shares outstanding as compared to $1.6 million or $0.03 per share based on 54.4 million adjusted diluted weighted average shares outstanding in the third quarter of last year. We ended the third quarter of fiscal 2013 with $5.6 million in cash and cash equivalent on our balance sheet, $19.5 million in outstanding term loan borrowings and availability of $20 million under our revolving credit facility. Our ending inventory balance was $115.5 million as compared to $84.4 million in ending inventory for the third quarter of 2012. Ending inventory on a per store basis increased approximately 9% year-over-year, due primarily to the timing of merchandized receipts caused by the later third quarter closing date this year. On a year-to-date perspective, for the first nine months of fiscal 2013, net sales increased by 31.9% to $323.4 million. We opened 60 net new stores and comparable store sales increased 6.6% following a 9.2% comp increase in the first nine months of fiscal 2012. GAAP operating income was $13.4 million. Excluding the impact of the founders' transaction and secondary public offering fees, adjusted operating income increased by 36.3% to $18.9 million and adjusted operating margin increased approximately 20 basis points to 5.9% from 5.7% from the prior year period. As a result of these year-to-date factors, adjusted net income increased by 82.8% to $11.1 million or $0.20 per share based on 54.5 million adjusted diluted weighted average shares outstanding versus $6.1 million or $0.11 per share based on 54.1 million adjusted diluted weighted average shares outstanding in the corresponding period in fiscal 2012. Now I would like to turn to our outlook. For the fourth quarter ending February 1, 2014, net sales are expected to be between $214 million and $217 million, assuming a 4% comparable store sales increase. GAAP net income is expected to be in the range of $25.9 million to $27 million with the GAAP EPS of $0.48 to $0.50. Adjusted net income, which excludes expenses related to the founders' transaction, is expected to be $26.8 million to $27.9 million with adjusted EPS of $0.49 to $0.51. Although the Black Friday selling period is behind us, a large portion of holiday sales lies ahead, with a significant amount occurring just prior to Christmas. With that said, our Q4 guidance takes into consideration many things; the fewer selling days between Thanksgiving and Christmas in 2013 as compared to 2012, the comparison against post hurricane November week last year, although it is important to note that we saw the majority of comp benefit in Q3, given that is when we cycled the event. The rubber band trend is [on so to] which we feel has moderated and lastly the fact that 2012 had a small benefit from the 53rd week, which had no impact on comps and contributed approximately $5 million to sales and less than a penny to EPS in the fourth quarter last year. For all other details related to our guidance, please refer to our press release. For the full fiscal year 2013, we are raising our guidance to reflect the outperformance versus our expectations in the third quarter. Sales are expected to be in the range of $538 million to $541 million based on 304 store count and full year comparable store sales increase of 5%. This compares to prior guidance for fiscal 2013 net sales in the range of $531 million to $536 million and comparable store sales increase of 5%. Our revised sales outlook for 2013 compares to net sales of $418.8 million for fiscal 2012, representing a growth rate range of 28% to 29%. Our full year guidance assumes an effective tax rate of approximately 38.7%, driven by a lower state effective tax rate resulting from the business restructuring we undertook in the second quarter. GAAP net income is expected to be in the range of $33.2 million to $34.3 million with the GAAP diluted income for common share of $0.62 to $0.64 as compared to prior guidance of $0.60 to $0.63. Adjusted net income is expected to be in the range of $37.9 million to $39 million or $0.70 to $0.72 per diluted share as compared to prior guidance of $0.68 to $0.71. This revised guidance represents a growth rate range for adjusted net income of 38% to 42% over last year. I would like to turn the call back over to Tom to provide some closing comments before we open up the call to questions. Tom? Thomas G. Vellios: Thanks, Ken. To wrap it up, we are pleased with the third quarter financial results and our performance of the entire team at Five Below. We are committed to delivering trend-right product to our customers and managing trend both big and small is a fundamental aspect of our business. While every quarter is important, we continue to focus on our long term top and bottom line growth prospects. This is a business that we believe can achieve 20% annual unit growth, 4% annual comp growth and 25% to 30% annual net income growth. We believe we have a substantial long term opportunity for store growth. With updates of only 304 stores today, we are committed to realizing this growth potential, while making the necessary investments to fuel it. We'll be proactive in investing in our people and infrastructure to ensure that the foundation of this company is solid and capable of supporting this growth. We will be equally as aggressive in investing in product to ensure that we continue to deliver excitement to our customers and keep some coming back to the stores. As we look to Q4, we are all ready for our most important selling season of the year. On behalf of the entire Five Below team, I would like to wish you all a very happy holiday season. Thank you. Operator, at this point, we are ready for questions.

(Operator Instructions) We'll hear first from John Heinbockel with Guggenheim Securities. John Heinbockel - Guggenheim Securities: Hello, guys. Just one thing short-term, and then one longer-term. If you think about the Rainbow Loom, it looks like that had a -- if I'm reading you right -- a couple of hundred basis point positive impact in the quarter on comp. Let me know if that's not right. And then with the cooling off in the trend because I have noticed that you've got product in the store, but it's not an overwhelming amount, is there any markdown risk of having too much as the trend moderated? And then I have one more. Thomas G. Vellios: Yes, that’s a great question John. Look I think I may have mentioned it on the last call, this was and is a trend that it is so easy to get into that anybody and everybody that wanted to sell and could sell rubber bands is selling rubber bands in the Loom. It is overly distributed. I think we've seen it moderate. With regards to the inventory, as we've always done in the past, this is our business. We will always be in the trend. There is always many trends we had duck taped last year, if you recall we had Silly Bandz a few years back. I think that has to be, has been and will continue to be one of the core strengths of Five Below to manage those trends and one of the ways that we manage them is obviously if the team is all built and moved quickly and as I've often said, if we simply do not try to get that last nickel, I think we are very careful with the trends. We service our customers, that’s goal number one. We never aspire to [mac] size our trend. It's one of the ways that we protect. So in a longwinded way, we do not see any material markdown or inventory concern whatsoever around this trend. John Heinbockel - Guggenheim Securities: Okay. And then secondly longer term, if you talk about the distribution network it seems fairly likely that, the more likely scenario here is that you find another larger facility in Delaware as opposed to expanding what you have for moving out of Delaware entirely. Is that fair and timing wise, will that be more a 2015 timetable when you think about the distribution network more broadly doing something in '15, not next year? Thomas G. Vellios: Good questions both. First of all let me start by saying that we love the facility and the Delaware facility is servicing our needs exceptionally well. The reason for looking at it is what we see is happening to just the density that we are getting into the volume of some of these stores and the opportunity that lies ahead of us. So it could very well be that is a larger facility and that winds up being in Delaware, but we have such a great opportunity John at this point to pause since we are not at in another words, if this doesn’t have to happen tomorrow, and while we are in need we believe of additional space in the foreseeable future, I think we have an opportunity to once again relook at our long term strategy and make the right decision for distribution in this region because there is a lot of [still] and it has to be a decision that we make for the next five to ten years, not just over the next couple of years. Could it be a facility in Delaware, yes, but we want to sort of assess what the right decision, the right space, right size of the facility is, but the location today it's serving us exceptionally well. John Heinbockel - Guggenheim Securities: But you wouldn’t do that in conjunction with a third facility? Would you wait for a third facility or you don’t have to? Thomas G. Vellios: I know that [Farah] probably if I am not to answer this, but I'll answer it anyway. We actually have taken a very through look at all those questions including the questions you just poised that the existing facility that needs to get bigger is a third facility. We've gone through all those options as we speak and we'll probably have more to discuss with you all when we review our Q4 results, but we just wanted to put it out there to everybody and give you all a heads-up. John Heinbockel - Guggenheim Securities: Thank you. Thomas G. Vellios: You're welcome.

Next we'll hear from Dan Binder with Jefferies. Dan Binder - Jefferies & Company: Hello, good afternoon. I had a couple of questions. First on the new store productivity, I know you spoke to the strength in Texas. If you look at the upside in the comp and the extra store openings versus, I think, expectations, it would sort of imply that maybe the total sales would've been a little bit higher. I was wondering if you could just speak to the new store weeks in the quarter, whether it was back-end weighted, that may have affected the total sales growth? Kenneth R. Bull: Yes Dan, just before I answer that, I just do want to say that we -- and Tom mentioned it also, we are really pleased with the new store productivity including the new Texas stores. When you do look at it on a quarterly basis, one of the things you have to be considering of is the timing of the openings and that’s really what you are seeing there in Q3 where we had a 25% unit growth, but in terms of the store weeks that increased in the mid teens. So it's really a timing factor that the mid to high teens that it's a timing factor that’s really driving that differential in terms of the store productivity. Dan Binder - Jefferies & Company: So taking that into account, would have been closer to 100% type number? Kenneth R. Bull: Yes much higher if you do the math on that correct. Dan Binder - Jefferies & Company: Okay. And then my second question related to the operating margin pressure that you had outlined in the last call seemed greater than what was realized even taking into consideration the upside in the sales. Just curious if anything -- what if we were in a major deviation from a margin standpoint versus your expectation. Kenneth R. Bull: No, I think the key differentially you are seeing between what we had laid out, we spoke about the distribution, the planned distribution deleverage and timing of the stores on preopening expenses, what we saw really was the flow-through of that additional comp. So we saw leverage on some of the fixed cost there including occupancy. So that was really the -- and what we called out in the script here, a little bit of merch margin expansion. That was -- these are really kind of the key drivers that were different from what we provided during the Q2 guidance. Dan Binder - Jefferies & Company: If I could squeeze just one more in on the Looms, I know you said that the trend is moderated some, couldn’t help to notice that it still seem to be flying at your stores over the Thanksgiving Day weekend, is the moderation that you are talking about significant or modest, can you put any kind of color around that? Thomas G. Vellios: I think without getting into I think a lot of specifics around the numbers, we actually -- that was a shipping that had come in to the stores that went into Black Friday. So our customers saw it pretty much for the first time when we got into it and what was interesting on an item like that, going back to John's earlier comment and observation of the stores that yeah that were flying, but it's interesting here we are in a matter of days and we may perhaps be saying not the same store as we look at the inventory of the stores. I think we are confident with our comment at least to date that the trend has moderated. Now I would break this up into two components and personally I hate spending a lot of time over those many trends [saying that] distractions of the bigger picture, but just to help everyone understand sort of the trend a little bit, the big sales tend to be around the rubber band, so it's sort of like that razor blade part of the business and no matter where you go today whether it's specialty, [big mart] where everyone is loaded with rubber band. The Loom I think we sell as an item, but I think it will probably be a good item. It may even be a very good item, but in the end what we are seeing is that it's serves the common [fest, serves] likes a craft item and in many cases almost a customer may chose to buy that as a craft item versus another craft gift that we may have had in the store. So we've seen it even though you may have seen that excitement when the items first hit the stores. I can assure you that same excitement is not quite there today and if you were to go out and look at the universe of retail, there is plenty of options to buy Looms today if you happen to be in one of those stores that we sold out. Dan Binder - Jefferies & Company: Thanks.

Moving on, we have Charles Grom with Sterne Agee. Charles Grom - Sterne Agee: Hello. Thanks. Congrats on a nice quarter. Just wondering if you could give us the comp composition between traffic and ticket, and also talk about store vintage performance. And then also how the comp trended during the quarter, and if you could quantify what the calendar shift was -- the calendar shift benefit to the third quarter. Thomas G. Vellios: Thanks Charles. In terms -- if we just go back to your -- with one of your questions, if you can go back to that again. Charles Grom - Sterne Agee: Just traffic ticket. Thomas G. Vellios: Yeah. Well, we've seen -- what we saw in Q3 is really what we've seen historically where transactions was really driving the key component of the comps there and in terms of the kind of the [gains] of comps during the quarter, we normally don’t like to speak about intra-quarter there, but we didn’t see really a big deviation from month on month in comparison to that 9% comp for the quarter. I think I had another part of that question. Charles Grom - Sterne Agee: The store vintage performance. Thomas G. Vellios: Yeah. And again what we've seen historically we saw again in Q3 where a lot of consistency amongst the classes of store is relative to comp. Charles Grom - Sterne Agee: Okay, great. And then any sense for how much the calendar shift helped you let in week 13? Thomas G. Vellios: I don’t know if we want to call it out, but it was included in our guidance when we kind of raised from the 4% to the 4% to 6% mid single digit. So I think you can take it from there in terms of what we thought the benefit was in the third quarter. Charles Grom - Sterne Agee: Okay. And then I know that the Looms have gotten a lot of attention in the stores, but if you look at and if you spend some time in the stores and you look at the CE reset, it looks like that could have some staying power, I was wondering if you could just speak to what you guys have done there? Any benefit you’ve seen and your expectations going forward? Thomas G. Vellios: Sure. The reset that we get was really a direct result from our customers. As you know that’s always been obviously a very important business for us. The electronic category and it was really a customer service issue that we felt it's easier for the customer to shop, it really wasn’t done to really do much of the sales. You tend to see a bit of a lift when you first accept these up, but the real intention was not done to get it more of a long term [prop] in the business. It was done to really as the business is changing so quickly, we had no choice but to deal with miles of going in and out of that and then have a new product that’s coming in and we wanted to find a way to make it easier for the customer to shop. That was really what drove the decision there. And over time, I think you are going to expect to really see more of that throughout the store. Our customer if you look at our business and the consistency in performance and what's been driving our comps and why we still have the confidence that we do around this 4% comp, is the transaction, which means customers are coming into the store and if we want to continue to drive our customers to come in, we will do it through product. The caveat that I would add now is we want to continue to really excite the customer with the environment. So expect to see I think in the foreseeable future may be a few more changes in the box to help make it even a bit easier for the customer in couple of the other areas as well. Charles Grom - Sterne Agee: Okay. That’s great and then if I could follow up with one more if I can, just to kind of back end to the margin guidance for the fourth quarter, it looks like you are expecting flat to up a little bit despite going up against the pretty easy compare from last year, just wondering what the headwinds are this quarter that would lead to only flattish type margin expansion? Kenneth R. Bull: Well I think the key headwind that we saw most of the year was with the new distributions that are in the drag if that's going to cause not as large as what we've seen in the first three quarters, but it will have a drag going into Q4 and then we will have some excited leverage on the SG&A side, but it's really that's drag from the DC that's the driver. Charles Grom - Sterne Agee: Okay. All right. Thanks.

And moving on, we'll hear from Paul Trussell with Deutsche Bank. Paul Trussell - Deutsche Bank: Yes, hi, good afternoon. It was good to hear that the cadence through the third quarter from a topline perspective was relatively consistent. I just wanted to inquire about fourth quarter to date, how was November and Black Friday, how were those trends? Thomas G. Vellios: Sure and again obviously as you know, we don’t comment on individual months and really do not want to get into that and clearly we've look at our performance to date baked in our assumptions for the balance of the quarter and came in with guidance. I will make one comment, first of all I must tell you I've been a retailer long time these Q4 and especially Christmas. They are getting very, very hard to predict and sometimes you almost don’t want to spend a lot of time trying to do it, but the best we could see, there is still a lot of business ahead with regard to what we consider to be that Black Friday weekend. What I would say to the group that we will up year-on-year, but we were down versus our internal expectations. Paul Trussell - Deutsche Bank: That's helpful and so from that standpoint would you, are there particular categories that you can speak to in terms of where you are seeing the shortfall or where is it traffic related, just interested in any additional category or product color you could provide from that standpoint? Thomas G. Vellios: Nothing that I think -- we don't believe that -- in other words first of all, we feel good about a 4% comp for Q4 and I think I just rewind a bit into Q3 and then you go back to our guidance when I think our guidance lastly, when we gave guidance for Q3, I think we had given mid single digit and the mid single digit included what we believe to be a material impact of Sandy in the last part of the quarter. So I think if you sort of do the math and you add that component to what would have been a [basic] for Q3 then you just sort of add on to that band and then you look at the guidance of 4%, it is a pretty rational logical number, but in fact I'll leave you with this, there is nothing that we see in the business that would create any thought or concern whether we have severe weakness in this part of the business or that, that we think could impact the overall. What we saw in Black Friday, again it was up year-on-year, but it didn’t meet our expectation. How much of that is noise? How much of that is all the different hours and schedules that were out there? How much of it is Cyber Monday? How much of it is the shift? Very hard to predict. As Ken mentioned earlier, I think we have a lot of business ahead of us. We are very well positioned and we believe the customer will still shop and if they do, we think our store are in a very good position to be able to service them going into the holiday. Paul Trussell - Deutsche Bank: Okay. That's helpful and then also you made a comment earlier about the majority of store openings over the next year will be in existing markets would certainly make sense. If you can just speak to still your share of confidence on moving and being able to move into new markets, expanding further West, if there is any plans that you could highlight for us from that standpoint and then just any other color on what you saw from these new Texas stores will be helpful. Thank you. Thomas G. Vellios: Sure. [Call it] new markets, a breakdown between existing and the makeup of 2014, we will definitely get into more detail when we do our Q4 call. Just to answer the other part of your question, look, I mean, we've got into Chicago. We've got into Atlanta. We've got into Detroit and more recently we've gone into Texas. I would say two things. One it is amazing to me how consistently sort of like be successful is too strong of a word for us, but that's what it is. How well we do when we enter these markets, but what has actually been quite amazing is how quickly and how easily the customer adapts and providing with your job to get the awareness out, which we tend to do whenever possible through the ability to really [go out] of stores, we've seen the customer really accept the store quite easily and respond to the value of proposition and the overall offering very well and very consistently across all markets. So I think it's fair to say, we've brought out a pretty high degree of confidence of the ability to enter just about any market and not face any high degree of difficulty and may be you know an upside here or there where awareness will take a little longer for that site to get off the ground. So we are quite bullish actually on new markets and our ability to enter and again we will get into more detail as we get into the 2014, but I must tell you we have plenty of opportunity to build many more stores in our existing markets.

Next question comes from Michael Lasser with UBS. Michael Lasser - UBS: Good evening. Thanks a lot for taking my question. Tom, I'm wondering on your thought about whether the company fully capitalized on this trend. Not getting a loom into the stores a couple of months after really the fad peaked out, were you able to recognize it quickly enough? Is your merchandise team capitalizing on the trends? And what does that say about your ability to maybe potentially capitalize on the next trend, whatever it might be? Thomas G. Vellios: Well, as you know, certainly the rubber bands with high demand for the quarter in Q3. The Loom was an interesting, actually it's a great question because actually I would asking the same question, for a company that needs to move fast. So Loom is actually pretty interesting in that if you look at -- the first Loom that came out, it was sort of proprietary, it was primarily offered at a much higher price point and it was actually the ability of our merchandizing team for the first time working hand in hand with our newly appointed product development team that they actually did a great job and it gave me a ton of confidence and the team's ability to work together and they went from idea to getting product that is [still off] so quickly, but not only were they able to execute it, they were able to reengineer a product that was out there for $15 to bring it in at $5 and to make it look amazing. So I actually, I would say in this particular case with the Loom, I would say the exact, on the contrary, they did a great job and bodes well for [how I think] can move forward in the future to take advantage of the many opportunities that I believe will lie ahead of us. Michael Lasser - UBS: The Company is currently lacking a president. Do you think that had -- how has that influenced the execution for the holidays? And what do you think is a reasonable timeframe for when you might get a president in place? Thomas G. Vellios: I feel really good about the team's ability at Five Below and the team that I have in place to execute the strategy of the same high degree and high level as they’ve been doing all along. The investment in all new hires including the President position that is open today as well as many other positions that really we don't speak about, they are low levels, but as important, in some cases maybe short term may be more so I think we will continue to invest, but we are in hurry to be jumping to conclusions. We will hire the right talent. We will take our time to do it and what gives us the ability to do that and the confidence to do that, is the confidence that I have in the Five Below team to continue to drive the business forward. So I don't see or have any concern today about performance to date or for the foreseeable future of our ability and the team's ability to execute. I really don't. Michael Lasser - UBS: Okay. And my final question is can you remind us how the fourth quarter unfolded last year, just from a comparison perspective. Are you facing uniquely these comparisons in December, which -- or around Black Friday, which was an ease in that fostering, how you are guiding for the quarter? Thanks a lot. Thomas G. Vellios: No problem. Like I said, this is getting real hard. It's too hard for me to figure it out, but it is the best that I think we will come up with. You might recall, but just sort of I will try and refresh, Farah will probably jump in and correct me if I misspeak, but last year we saw obviously -- we came out of the storm, we saw a bit of weakness and as I went into it, we had some concern, but as we mentioned later in the quarter, when we did our Q4 call of last year, we saw the customer come back and really shop in our stores and we saw really business pick up that it more than offset anything that may have been an issue in a way that we saw the business unfold. This year I think as we look at the business, we really fell that the guidance we put out is the right guidance for the business given what we know quarter to date even that this is such a short and compressed holiday season, a single store [may] could affect our business and there is still a lot of business that needs to be done and we do a lot of business as we get closer in the days leading up to Christmas and I think in the same way that we made up a lot of it last year, I think it's imperative and important for us not to be overly aggressive. So I would say to you, we've looked at last year, we've looked at how the company perform. Remember we had a 4.5% comp performance last year for Q4, correct. The 4.5% right, that we had, and we feel that 4% is the right guidance we put out there. Michael Lasser - UBS: Thank you very much.

Moving on we'll hear from Meredith Adler with Barclays. Meredith Adler - Barclays Capital: Hey. Thanks for taking my question. A lot of them have been answered. In fact, Don asked two of my four questions in the very first moment of the call. But I'd like to talk -- as you're talking about the shorter holiday season, another thing to notice about the calendar is that Christmas falls on a Wednesday, which is not a great time for retailers, do you feel like since your sales tend to come very late, do you think that that makes things more difficult? Kenneth R. Bull: Yes Meredith, we looked at that and I guess we [pay] to look really in those few prior days before Christmas, not as much of an impact in terms of the day of the week where Christmas falls. We don't think that has a material impact. I think the more important piece is that the [times falling] a lot of the business does come late for us and always has and that late period is really the days before Christmas, that weekend before, even a little bit before that, but we don't see any distortion or don't expect any distortion based on Christmas falling on a certain day of the week. Meredith Adler - Barclays Capital: Okay. Great. And then discussion again and a little bit back to new stores. Obviously an existing market now is Texas. But I'm sure you don't feel like you've anywhere near penetrated Texas, or anyplace else. But Texas is still very early. I just want to make sure that I'm understanding that part of what you're doing by filling in existing markets is to fill out Texas. And also when you talk about it, is it -- you said Dallas; I think you've got stores in Austin. Are you thinking about moving into other markets of Texas? Or would that be considered moving into new markets? Kenneth R. Bull: Yeah, I think Tom had mentioned this before Meredith, any kind of detail or clarity we'll give on our Q4 call, but [those] to speak to, we should expect again the majority of new stores coming out of existing markets and then given the placement of our second distributions that are down there in the [whole of] Mississippi you should also expect us to fiddling around that region, which would include Texas. I think that would be pretty reasonable than expectations. Thomas G. Vellios: Exactly right. And I think Meredith, when you look at it obviously we opened Austin in Q2, we did Dallas in Q3. Dallas will be a big a market and that's why you heard the reference point that I made to Dallas. So there is a lot of stores to come out of Dallas, but I think it's also fair to say that Texas is a very big market and I expect that we will definitely not be limiting ourselves to Dallas in the foreseeable future. Meredith Adler - Barclays Capital: Okay. That's great. I don't think I have any more questions. Thank you very much. Thomas G. Vellios: Thank you, Meredith. Kenneth R. Bull: Thanks Meredith.

We'll take our next question from John Zolidis with Buckingham Research. John Zolidis - Buckingham Research: Hi. Good afternoon. Question on the total sales growth. Dan Binder asked a little bit about this, but just for clarity, just try to rephrase this question. The second quarter had a 6.6% comp and 35% total sales growth; and then in the third quarter it had a 9% comp, but only 28% total sales growth with greater year-over-year change in selling square footage. So that looks a little bit confusing. Is there anything affecting those numbers from the comparisons till last year's 53rd week? And is there anything like that happening in the fourth quarter aside from the $5 million that you've already mentioned? Kenneth R. Bull: John, it sounds like there's two parts to that. Just to speak about that kind of shift in Q2 to Q3, really the driver there that you are seeing and the change in sales is because of the timing of the new store weeks in Q3 and that this year's Q3 over last year's Q3. But, if you're seeing some distortion there and it should come out in the calculated productivities of new stores in Q3. And then with regards to that 53rd week that more than a comp week, it doesn't affect the comp for us. But from a sales perspective I think I've mentioned it's about $5 million of hit there based on last year's 53rd week and not having that week in Q4 this year. John Zolidis - Buckingham Research: Okay. So there is no lack of comparability amongst the weeks for 2Q or 3Q that will be affecting total sales growth. Kenneth R. Bull: Correct. John Zolidis - Buckingham Research: Okay. Great. Thanks, and back to block for the holidays. Kenneth R. Bull: Thanks John. Thomas G. Vellios: Thank you, John.

Next we'll hear from Christian Buss with Credit Suisse. Christian Buss - Credit Suisse: Yes. Thank you. Actually, sort of a nice quarter and nice management of high volume, high volatility items. I was wondering if you could talk a little bit about the distribution expansions in the Northeast. Does that mean you are now thinking there might be higher store density than previously expected? What's really driving that decision? Thomas G. Vellios: I think we've always felt that, look, we never quite know how dense we can get a market and I think we learn each year that just when we think we've put enough stores, there is more opportunity. I think the decision has been driven, I would say, by two forces. One, we definitely see more stores obviously in the market than we need to take that into consideration. But as important, as we look at volume of those stores, as we look at location of where the facility is and the fact that it is a four -- just to remind everybody -- the DC and Delaware is 400,000 square feet, a little [low of] maybe 437,000. Kenneth R. Bull: 420,000. Thomas G. Vellios: 420,000 square feet. And the first phase of a research that we did about a couple of years ago to really understand sort of ideal size of distribution capacity of facility, and the work that I think we're starting to do now will probably point us perhaps to maybe a larger facility that leverages better over time. So it's two things, its more stores and it's also the fact that that's the smaller of the two facilities. And at least today we believe that we will be better served with a larger facility to handle that region. Christian Buss - Credit Suisse: That makes a lot of sense. Thomas G. Vellios: And will possibly a third if the study shows otherwise. Christian Buss - Credit Suisse: That's helpful. And could I ask a sort of longer term question? You're now ramping up on sort of 50 plus stores a year, new stores managers, can you talk to me about the training procedures and programs you have in place and how many of your new stores managers are coming from existing locations and how many you're having to get from competitors? Thomas G. Vellios: Sure. You know what, I think the stores team and I had a store, they got to tell you, they've done a great job building this team, particularly when you consider that we paid in the year 300 stores and we've more than doubled our store base in the last three years. So we've added a lot of new stores in the last couple of years. And when you do that, much as you want to promote from within, it's very challenging. I think we have a -- what I would consider to be a surprisingly high number of store promotes -- of manager promotes that are internal that's build into the way that the model wants with every store having obviously a manager and a system manager, key holders. So we continue to try our best to elevate the results here to take over positions of managers. But as I mentioned earlier in parts of our business and when you look at stores, when you look at merchandizing, etcetera, investing in people is critical and the way that I think we have to do that to support that growth is not just new hires, but we need trainee, we need developer, we need to rev up that to take the talent that's internal and get it to the next level. We do have a training program in place. We've had it for quite a while in the stores that we put a training -- the trainees through or those that are ready to become managers. We've had a good track record of promoting at Charlie, but I think we got to get better given the growth that's ahead of us and how fast we are opening new stores. Christian Buss - Credit Suisse: That's helpful. Thank you and best of luck. Thomas G. Vellios: And we also have a program, by the way, for district managers in stores as well because that's actually adds importance. A district manager for us is critical because they are leaders of units of business and we need to make sure that that program, which has been place continuous to evolve and get better. Christian Buss - Credit Suisse: Thank you very much and good luck. Thomas G. Vellios: Thank you. Kenneth R. Bull: Thanks Christian.

Our next question is from Matt Nemer with Wells Fargo. Matthew Nemer - Wells Fargo: Afternoon, everyone. So I just had a question about the looms and the rubber bands. I'm curious what else is in those baskets? Are people coming in and buying those on their own, or is it a loom and a Coke, or is there a fuller basket? Are they shopping the other departments? And also, is that -- any sense on whether that tends to be a new customer or an existing customer? Thomas G. Vellios: I think we've not done a ton of analysis, but we will look at the average basket size. It has been very consistent. And I think what we tend to see is [here's we've sort of seen] with not a ton of research, but when you look at the loom and particularly the bands, because the loom is a different item, the looms are coming in, it's a craft item, et cetera, you're buying as a gift. And you're probably buying that instead of something else. But what I think we've seen with some of these trends whether it was Silly Bandz, whether it was duct tape last year, whether it’s the -- which you'll recall was also a trend -- whether it’s the rubber bands that we have. I think as you get in the earlier quarters customers tend to come in and you may see a lot of kids maybe buying the business. And it’s the frequency in the transaction increase that we tend to see, but not the transaction size. So the best to say is pretty constant as evidenced by the ABS that you see being very consistent. Kenneth R. Bull: Yes. And just to add to that we've -- not that we have any specific data, but given the consistency across our classes of stores where you would see older classes have higher awareness than newer classes it is probably is telling you that we're getting a mix of frequency and new customers that are included in it. Thomas G. Vellios: And we believe particularly in Q4 there maybe even – when we get to these trends, there is a lot of more substitution effect taking place as well where the customer is coming in, if there is a trend they want that trend item to put under the tree or in the stocking or whatever it may be, so it would be that versus something else. It won't be one, in other words, it won't be that plus something else. Matthew Nemer - Wells Fargo: Got it. And then I guess kind of associated with that, these trends come and go, but when they're here, do you think that you have sort of the offering or the procedures in place to try to -- to the extent that you do get new customers, that there's a way to communicate frequently with them and try to keep them and get them back? Or do you think that's more of a future opportunity for you as you build out? Thomas G. Vellios: I think obviously we're building our social media base, our Facebook base is building very -- quite nicely I must say, and I think our Head of Marketing has really done a terrific job with his team over the last couple of years. Our email database which for us because that goes right after the mom, which obviously is not the best way to go after teams and pre-teams, but when it comes to mom and the adults who work for us, has built quite nicely and it continues to build. In that way we're able to communicate with our customers. We're able to even communicate by individual stores, which is two or group of stores. We do not have an actual loyalty program or a specific customer response program. I do think over time, we have an ability and opportunity to do that, which again goes back to that investment that I think we need to make in systems and infrastructure to support the future of the business because our customer is looking to us for these trends, they're looking to us for new products, they're looking to us to see what's new in the stores and that's a good way for us to communicate. Matthew Nemer - Wells Fargo: Okay. That's very helpful. And then just one more, if I could. On SG&A the growth rate -- if we look at it per foot, really moderated this past quarter. It had been running in the mid to high single-digits for quite a bit of time. It was up about 2% per foot in Q3. Some of that I think was a marketing shift into Q4, but does that explain all of it, or could you just give us a sense for where that should trend going forward? Thomas G. Vellios: Yes. I think you're seeing really more of a one-off there in that planned marketing shift that we spoke about before. That's really the key driver. And then we did get some leverage on that additional comp. So those are really the two pieces that's driving that metric.

And our next question will come from Jerry Hamblin with Dougherty and Company. Jeremy Hamblin - Dougherty and Company: Good evening, guys. I wanted to ask just a couple of questions about the kind of early 2014. As you think about the distribution center in Olive Branch, and you continue to have some drag in the fourth quarter, do you expect that in early 2014 you're going to continue to see some drag? Is that the number of stores that that center is supporting continues to grow, or do you think that this will be the last quarter where we see some drag from that? Kenneth R. Bull: Well, we haven't finalized our 2014 plans yet and we will asses those on the Q4 call. But one of the things obviously you know that we're doing is we're continuing to ramp up with the utilization of that Olive Branch distribution center. It was a drag for the full year. It wouldn't be unreasonable to see some improvement next year. I don't want to get into any quarter or when that's going to happen, but it would be as we continue to add stores, which would be throughout kind of later in the year. Jeremy Hamblin - Dougherty and Company: And then, if I could just follow up and ask a little bit about -- without thinking how many openings you have on tap for 2014 -- the timing of those openings. Do you see the sequencing to be similar to what you've had this year, or kind of a more even sequencing of openings as you look out into 2014? Thomas G. Vellios: Again, we'll add into a little bit more of that as we get into Q4. But for us really it's more where we open the stores, the availability, how we structure the openings that determines. And that's why you've seen some of the inconsistencies in quarter-on-quarter store openings over the last year or two. More color as we get into Q4 despite with no goal to try and save the more in quarter X versus quarter Y though. I think we feel good directionally with the way that we've operated in the past, in the way that we spread the stores out for the quarters as long as we stay away from Q4. Jeremy Hamblin - Dougherty and Company: Ken, just one additional follow-up. You mentioned that in Q3 that the number of store operating weeks was kind of in the mid to high-teens as opposed to the 25% store growth. What was it in Q2 of this year in terms of store operating weeks? Kenneth R. Bull: I think it was relatively similar if I remember from the last year because of our productivity, I remember correctly. But you didn't have the same impact in Q2 as it did in Q3.

Moving now we'll take the question from Patrick McKeever with MKM Partners. Patrick McKeever - MKM Partners: Thanks. So, on the -- can you just run through the advertising shift that you mentioned, and what the expected impact is to the fourth quarter? Kenneth R. Bull: Yes. I don't want to get into too much detail around that, but it is something that we had discussed back on our Q2 call that there was a planned shift in marketing out of Q3 and into Q4, not having as significant an impact in Q4 that it would have in Q3. So I'll just leave it at that, but this was a planned shift in terms of our marketing dollars back into the latter part of the year. Patrick McKeever - MKM Partners: And then you mentioned the compressed holiday shopping season, and the possibility that maybe a storm, a weather event, could have a significant impact. Were there any big weather events in the fourth quarter of last year, other than Sandy in the very early part of the quarter that we should be mindful of? Thomas G. Vellios: No, I don't believe -- I don't think there was anything significant last year throughout… Kenneth R. Bull: Certainly leading up the Christmas holiday. Thomas G. Vellios: Yes, nothing before Christmas, obviously except for the Sandy event.

And that will end our question-and-answer session. I'll turn the conference back to you for any additional or closing remarks. Thomas G. Vellios: Okay. Well thanks everyone. Just a point of clarification. I said 4.5% comp was a comp for Q4 last year. To be exact, it was 12.4%, but with that thank you for participating. Thank you for your support and again we want to wish you all of you a happy and healthy holiday.

Ladies and gentlemen, that will conclude today's conference. Again we do thank you all for joining us. You may now disconnect.