What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-16 compared with 2022-03-30 · 82 added, 106 removed, 279 unchanged (40% of the section changed)

6 unchanged sentences

(collectively with its wholly owned subsidiary), except as expressly indicated or unless the context otherwise requires.

As used herein, references to “Crew” refers to our employees, and references to “Shipcenters” refers to our distribution and logistics centers.

We purchase products in reaction to existing marketplace trends and, hence, refer to our products as “trend-right.” We use the term “dynamic” merchandise to refer to the broad range and frequently changing nature of the products we display in our stores.

5 unchanged sentences

We operate on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to January 31 of the following year.

References to "fiscal year 2023 or "fiscal 2023" refer to the period from January 29, 2023 to February 3, 2024, which consists of a 53-week fiscal year.

References to "fiscal year 2022" or "fiscal 2022" refer to the period from January 30, 2022 to January 28, 2023, which consists of a 52-week fiscal year.

3 unchanged sentences

References to “fiscal year 2018” or “fiscal 2018” refer to the period from February 4, 2018 to February 2, 2019, which consists of a 52-week fiscal year.

References to “fiscal year 2017” or “fiscal 2017” refer to the period from January 29, 2017 to February 3, 2018, which consists of a 53-week fiscal year.

References to 2023, 2022, 2021, 2020, 2019, and 2018 are to our fiscal years unless otherwise specified.

Due to the 53rd week in fiscal 2017, all comparable sales related to any reporting period during the year ended February 2, 2019 are reported on a restated calendar basis using the National Retail Federation's restated calendar comparing similar weeks.

Due to the 53rd week in fiscal 2017, the period from January 29, 2017 to February 3, 2018, all comparable sales related to any reporting period during the year ended February 2, 2019 are reported on a restated calendar basis using the National Retail Federation's restated calendar comparing similar weeks.

Five Below is a leading high-growth value retailer offering trend-right, high-quality products loved by tweens, teens and beyond.

We know life is way better when you’re free to “let go & have fun” in an amazing experience filled with unlimited possibilities.

We believe life is better when customers are free to “let go & have fun” in an amazing experience filled with unlimited possibilities.

We offer a dynamic, edited assortment of exciting products, most priced at $5 and below, including select brands and licensed merchandise across eight worlds:

4 unchanged sentences

Our new store model assumes a store size of approximately 9,500 square feet and is typically located within power, community and lifestyle shopping centers across a variety of urban, suburban and semi-rural markets.

We opened 170 net new stores in fiscal 2021 and we plan to open approximately 375 to 400 new stores over the next two fiscal years including approximately 160 new stores in fiscal 2022.

We opened 150 new stores in fiscal 2022 and we plan to open 200 new stores in fiscal 2023.

We believe that we have the opportunity to grow our store base to more than 3,500 locations over time.

In August 2016, we commenced selling merchandise on the internet, through our fivebelow.com e-commerce website.

We launched our e-commerce operation as an additional channel to serve our customers.

During fiscal 2020, we entered into a partnership with an on demand third party delivery service to enable our customers to shop online and receive convenient same day delivery.

We also offer our merchandise on the internet, through our fivebelow.com e-commerce website as well as with an on demand third party delivery service to enable our customers to shop online and receive convenient same day delivery.

All e-commerce sales, which includes shipping and handling revenue, are included in net sales and are included in comparable sales.

1 unchanged sentence

We believe that our business model has resulted in strong financial performance when considered in light of the economic environment:

• Our comparable sales increased by 30.3% in fiscal 2021, decreased by 5.5% in fiscal 2020, and increased by 0.6% in fiscal 2019.

• Our comparable sales decreased by 2.0% in fiscal 2022, increased by 30.3% in fiscal 2021, and decreased by 5.5% in fiscal 2020.

Comparable sales results in fiscal 2021 and fiscal 2020 were impacted by the COVID-19 pandemic.

27 unchanged sentences

This approach makes our stores a destination, encouraging hands-on interaction with our products and conveying our value pricing.

We have developed a unique culture that emanates from our employees, many of whom frequently shop at Five Below, to our customers, thereby driving a higher level of connectivity and engagement.

We have developed a unique culture that emanates from our crew, many of whom frequently shop at Five Below, to our customers, thereby driving a higher level of connectivity and engagement.

Additionally, we believe our price points, coupled with our dynamic merchandising approach, create an element of discovery, driving repeat visits and customer engagement.

10 unchanged sentences

• Grow Our Store Base.

We believe there is significant opportunity to expand our store base throughout the United States from 1,190 locations as of January 29, 2022 to more than 3,500 locations within the United States over time.

We believe there is significant opportunity to expand our store base throughout the United States from 1,340 locations as of January 28, 2023 to more than 3,500 l ocations within the United States over time.

Based upon our strategy of store densification, we expect most of our near-term growth will occur within our existing markets, as well as new markets.

This strategy allows us to benefit from enhanced brand awareness and achieve operational efficiencies.

We opened 120 net new stores in fiscal 2020 and 170 net new stores in fiscal 2021, and we plan to open approximately 375 to 400 new stores over the next two fiscal years including approximately 160 new stores in fiscal 2022.

Our new store model assumes approximatel y 9,000 s quare feet and is primarily in-line locations within power, community and lifestyle shopping centers across a variety of urban, suburban and semi-rural markets.

We opened 170 net new stores in fiscal 2021 and 150 new stores in fiscal 2022, and we plan to open 200 new stores in fiscal 2023.

Our new store model assumes approximately 9,500 square feet and is primarily in-line locations within power, community and lifestyle shopping centers across a variety of urban, suburban and semi-rural markets.

We have a talented and disciplined real estate management team and a rigorous real estate site selection process.

30 unchanged sentences

Based on management’s experience and industry knowledge, we believe our compelling value proposition and the dynamic nature of our merchandise offering has fostered universal appeal to customers across a variety of age groups beyond our target demographic.

Our typical store features in excess of 4,000 stock-keeping units, or SKUs, across a number of our category worlds including Style , Room, Sports, Tech , Create , Party, Candy and New & Now .

Our typical store features in excess of 4,000 products across a number of our category worlds including Style , Room, Sports, Tech , Create , Party, Candy and New & Now .

We focus our merchandising strategy on maintaining core categories within our stores, but aim to generate high item velocity and sell-through to keep our assortment fresh and drive repeat visits.

27 unchanged sentences

These products are most often placed at the front of the store.

Set forth below is data for the following groups of products – leisure, fashion and home, and party and snack.

Set forth below is data for the following groups of products – leisure, fashion and home, and snack and seasonal.

The percentage of net sales represented by each product group for each of the last three fiscal years was as follows:

1 unchanged sentence

2022 2021 2020

Leisure 47.8 % 47.3 % 49.8 %

47.6 % 49.6 % 49.2 %

Fashion and home 29.2 % 30.2 % 35.8 %

Party and snack 22.0 % 16.9 % 18.9 %

Snack and seasonal (1)

23.2 % 20.2 % 15.0 %

Total 100.0 % 100.0 % 100.0 %

Leisure includes items such as sporting goods, games, toys, tech, books, electronic accessories, and arts and crafts.

(1) Due to realignment of certain products, there was a minor adjustment to historical sales by product group.

Leisure includes items such as sporting goods, games, toys, tech, books, electronic accessories, arts and crafts, and party.

Fashion and home includes items such as personal accessories, “attitude” t-shirts, beauty offerings, home goods and storage options.

Party and snack includes items such as party and seasonal goods, greeting cards, candy and other snacks, and beverages.

Snack and seasonal includes items such as seasonal goods, greeting cards, candy and other snacks, and beverages.

As of January 28, 2023, we operated 1,340 stores throughout the United States.

Our new store model assumes a store size of approxim ately 9,000 squa re feet.

Our new store model assumes a store size of approxim atel y 9,500 sq ua re feet.

Our stores are primarily located in power, community and lifestyle shopping centers;

approximately 5% of our stores are located in malls.

The following map shows the number of stores in each of the states in which we operated and the locations of our distribution centers as of January 29, 2022.

The following map shows the number of stores in each of the states in which we operated and the locations of our shipcenters as of January 28, 2023.

Store Design and Layout

15 unchanged sentences

We select store sites for new store openings based upon certain criteria including minimum population density requirements, availability of attractive lease terms, sufficient space and strong positioning within a center.

Employees on our real estate team spend considerable time evaluating prospective sites before bringing a proposal to our real estate committee.

Crew on our real estate team spend considerable time evaluating prospective sites before bringing a proposal to our real estate committee.

Our real estate committee, which is composed of senior management including our executive officers, approves all of our locations before a lease is signed.

We believe there is a significant opportunity to expand our store base in the United States.

We opened 170 net new stores in fiscal 2021 and we plan to open approximately 375 to 400 new stores over the next two fiscal years including approximately 160 new stores in fiscal 2022 through expansion in existing markets and by entering new markets.

We opened 150 new stores in fiscal 2022 and we plan to open 200 new stores in fiscal 2023 through expansion in existing markets and by entering new markets.

We maintain a pipeline of real estate sites that have been approved by our real estate committee and have executed 103 leases as of January 28, 2023 for new stores in fiscal 2023.

The actual number, location and timing of new store openings in 2022 will depend on a number of factors, such as retail trends, competition, the general economic environment and our ability to hire and retain new store managers and employees.

The actual number, location and timing of new store openings in 2023 will depend on a number of factors, such as retail trends, competition, the general economic environment and our ability to hire and retain new store managers and crew.

Our recent store growth is summarized in the following table:

11 unchanged sentences

Our store growth is supported by our new store economics, which we believe to be compelling.

Our new store model assumes a store size of approximate ly 9,000 sq uare feet that achieves sales of approximately $2.0 million in the first full year of operation and an average new store cash investment of approximate ly $0.4 million, including our store build-out (net of tenant allowances), inventory (net of payables) and cash pre-opening expenses.

Our new store model assumes a store size of approximately 9,500 sq uare feet that achieves sales of approximately $2 million in the first full year of operation and an average new store cash investment of approximately $0.4 million, including our store build-out (net of tenant allowances), inventory (net of payables) and cash pre-opening expenses.

Our new store model targets an average payback period of less than one year on our initial investment.

Store Operations

Each of our stores is managed by a store manager and one or two assistant managers who oversee full-time and part-time employees within each store.

Each store manager is responsible for the day-to-day operations of his or her store, including the unit’s operating results, maintaining a clean and appealing store environment and the hiring, training and development of employees.

Each of our stores is managed by a store manager and one or two assistant managers who oversee full-time and part-time crew within each store.

We also employ district managers who are responsible for overseeing the operations of 10 to 15 stores, on average, and regional directors who are responsible for overseeing the operations of our district managers.

We are guided by a philosophy that recognizes strong sales performance and customer service, allowing us to identify and reward employees who meet our high performance standards.

We are guided by a philosophy that recognizes strong sales performance and customer service, allowing us to identify and reward crew who meet our high performance standards.

Store managers participate in a rewarding bonus incentive program.

We also recognize individual performance through internal promotions and provide extensive opportunities for advancement.

Our employees are critical to achieving our goals, and we strive to hire talented people with high energy levels and motivation.

Our crew are critical to achieving our goals, and we strive to hire talented people with high energy levels and motivation.

We have well-established store operating policies and procedures and an in-store training program for new store managers, assistant managers and store associates.

In addition, we have a dedicated group of training and new store opening managers who are focused on ensuring a consistent new store opening and remodel process and who leverage their extensive experience and knowledge of Five Below to train new store managers.

Our customer service and store procedure training programs are designed to enable employees to assist customers in a friendly manner and to help create a positive sales-driven environment as well as teach successful operating practices and procedures.

Our customer service and store procedure training programs are designed to enable crew to assist customers in a friendly manner and to help create a positive sales-driven environment as well as teach successful operating practices and procedures.

Merchandising, Sourcing and Distribution

1 unchanged sentence

Merchandising

Our merchandising team consists of a Chief Merchandising Officer, who reports directly to our Chief Executive Officer, and is supported by general merchandising managers and an extensive team of merchandising employees.

Our merchandising team consists of a Chief Merchandising Officer, who reports directly to our Chief Executive Officer, and is supported by an extensive team of merchandising crew.

Our merchandising team works directly with our product development team and our central planning and allocation group to ensure a consistent delivery of products across our store base.

4 unchanged sentences

We also have the ability to employ an opportunistic buying strategy, when appropriate, capitalizing on selected excess inventory opportunities, to purchase complementary merchandise based on consumer trends, product availability and favorable economic terms.

We work with approximately 1,000 vendors, with no single vendor representing more than 5% of our purchases in fiscal 2021.

We work with approximately 1,000 vendors, with no single vendor representing more tha n 5% of our purchases in fiscal 2022.

We sourced approximately 60% of our purchases from domestic vendors in fiscal 2022.

1 unchanged sentence

Distribution and Fulfillment

We distribute over 85% of our merchandise for our retail stores from our approximately 1,000,000 square foot distribution center in Pedricktown, New Jersey, our approximately 860,000 square foot distribution center in Conroe, Texas, our approximately 860,000 square foot distribution center in Buckeye, Arizona, our approximately 700,000 square foot distribution center in Forsyth, Georgia and our approximately 600,000 square foot distribution center in Olive Branch, Mississippi, with the remaining merchandise shipped directly from the vendor to our stores.

We distribute approximately 85% of our merchandise for our retail stores from our approximately 1,030,000 square foot shipcenter in Indianapolis, Indiana, our approximately 1,000,000 square foot shipcenter in Pedricktown, New Jersey, our approximately 860,000 square foot shipcenter in Conroe, Texas, our approximately 860,000 square foot shipcenter in Buckeye, Arizona and our approximately 700,000 square foot shipcenter in Forsyth, Georgia, with the remaining merchandise shipped directly from the vendor to our stores.

We realize cost savings by working with our vendors to streamline and reduce packaging to diminish shipping costs.

For our direct-to-customer e-commerce business, we commenced fulfillment operations in Pedricktown, New Jersey in fiscal 2018, Cincinnati, Ohio in fiscal 2019 and Buckeye, Arizona in fiscal 2021.

We generally ship merchandise from our distribution centers to our stores between two and four times a week, depending on the season and the volume of a specific store.

We use contract carriers to ship merchandise to our stores.

We continuously assess ways to maximize the productivity and efficiency of our existing distribution facilities and evaluate opportunities for additional distribution centers.

In March 2019, we completed the purchase of an approximately 700,000 square foot distribution center in Forsyth, Georgia.

For our direct-to-customer e-commerce business, we commenced fulfillment operations in Pedricktown, New Jersey in fiscal 2018, Buckeye, Arizona in fiscal 2021, and Indianapolis, Indiana in fiscal 2022.

We generally ship merchandise from our shipcenters to our stores one to four times a week, depending on the season and the volume of a specific store.

We use either contract carriers or our own private-fleet of trucks to ship merchandise to our stores.

We continuously assess ways to maximize the productivity and efficiency of our existing distribution facilities and evaluate opportunities for additional shipcenters.

In March 2019, we completed the purchase of an approximately 700,000 square foot shipcenter in Forsyth, Georgia.

The total amount paid for the land and building was approximately $42 million.

We began operating the distribution center in April 2019.

In August 2019, we acquired land in Conroe, Texas, to build an approximately 860,000 square foot distribution center.

We began operating the shipcenter in April 2019.

In August 2019, we acquired land in Conroe, Texas, to build an approximately 860,000 square foot shipcenter.

The total amount paid for the land and building was approximately $56 million.

We began operating the distribution center in July 2020.

In July 2020, we acquired land in Buckeye, Arizona, to build an approximately 860,000 square foot distribution center.

We began operating the shipcenter in July 2020.

In July 2020, we acquired land in Buckeye, Arizona, to build an approximately 860,000 square foot shipcenter.

The total amount paid for the land and building was approximately $65 million.

We began operating the distribution center in August 2021.

In March 2021, we acquired land in Indianapolis, Indiana, to build an approximately 1,030,000 square foot distribution center.

The total cost of the land and building is expected to be approximately $61 million, of which approximate ly $43 million has been paid thro ugh January 29, 2022.

We expect to occupy the distribution center in the first half of fiscal 2022.

As a result of the significant expansion of our network of distribution facilities over the last several years, including the planned opening in the first half of fiscal 2022 of our Indianapolis, Indiana distribution center, we expect to cease operations at our distribution centers in Olive Branch, Mississippi and Cincinnati, Ohio in the first half of fiscal 2022, and expect the costs incurred to be immaterial to our consolidated statements of operations.

We began operating the shipcenter in August 2021.

In March 2021, we acquired land in Indianapolis, Indiana, to build an approximately 1,030,000 square foot shipcenter.

The total amount paid for the land and building was approximately $60 million.

We began operating the shipcenter in June 2022.

As a result of the significant expansion of our network of distribution facilities over the last several years, including the opening of our Indianapolis, Indiana shipcenter in June 2022, we ceased operations at our shipcenters in Olive Branch, Mississippi and Cincinnati, Ohio in the first half of fiscal 2022.

Marketing and Advertising

Our cost-effective marketing strategy is designed to promote brand awareness and drive store and website traffic with our target demographic, as well as other value-oriented customers.

Our strategy includes highlighting our brand, exceptional value and quality proposition predominantly through the use of digital advertising, commercials (on television and through streaming), syndicated talk show integrations and local marketing, with a focus on peak selling seasons.

Our strategy includes highlighting our brand, exceptional value and quality proposition predominantly through the use of digital advertising, commercials (on television and through streaming), affiliate marketing, social influencers, content creators, syndicated talk show integrations and local marketing, with a focus on peak selling seasons.

Additionally, we rely on the strong visibility and the presence of our store locations, email messaging and philanthropic community fundraising to promote and further our brand image and drive traffic.

Our digital experience, anchored by our mobile e-commerce website, app and social media presence is growing rapidly as we utilize TikTok, Instagram, Facebook, YouTube and Snapchat to engage our customers with compelling digital content on a frequent basis.

Our marketing team works with our merchandising team to develop novel and dynamic techniques to display our products, including distinctive merchandise fixtures and colorful and stimulating signage, which attract customers, encourage hands-on interaction with our quality products and convey our value pricing.

For new store openings, we seek to create community awareness and consumer excitement predominantly through digital advertising, public relations and community outreach promoting the grand opening and by creating an engaging grand opening event that includes contests, and giveaways.

Our marketing team, which reports into our Chief Merchandising Officer, works with our merchandising team to develop novel and dynamic techniques to display our products, including distinctive merchandise fixtures and colorful and stimulating signage, which attract customers, encourage hands-on interaction with our quality products and convey our value pricing.

For new store openings, we seek to create community awareness and consumer excitement predominantly through digital advertising, public relations, community outreach and events promoting the grand opening.

We also aim to execute multiple store openings in a given new market on the same day in order to leverage marketing efforts to produce maximum impact.

7 unchanged sentences

Our success also depends in substantial part on our ability to respond quickly to trends so that we can meet the changing demands of our customers.

We believe that we compare favorably relative to many of our competitors based on our merchandising strategy, edited product assortment targeted at tweens and teens, store environment, flexible real estate strategy and company culture.

We believe that we

compare favorably relative to many of our competitors based on our merchandising strategy, edited product assortment targeted at tweens and teens, store environment, flexible real estate strategy and company culture.

Nonetheless, certain of our competitors have greater financial, distribution, marketing and other resources than we do.

13 unchanged sentences

Government Regulation

We are subject to labor and employment laws, laws governing advertising, privacy laws, safety regulations and other laws, including consumer protection regulations that regulate retailers and/or govern the promotion and sale of merchandise and the operation of stores and distribution centers.

We monitor changes in these laws and believe that we are in material compliance with applicable laws.

As a result of the COVID-19 pandemic, federal, state and local governments and private entities mandated various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories, and quarantining of people who may have been exposed to the virus.

Such mandates required reduction of operating hours and forced temporary closures of certain retailers and other businesses.

As a result of these restrictions and out of concern for our customers and employees, we temporarily closed all of our stores as of March 20, 2020.

We began reopening our stores at the end of April 2020 and continued in operation throughout fiscal 2020 and fiscal 2021 in compliance with federal, state and local requirements.

While we were able to quickly reopen our stores and maintain operations throughout the remainder of fiscal 2020 and fiscal 2021, there can be no guarantee that federal, state and local governments will not adopt restrictions that further serve to restrict our ability to operate in the event of future COVID-19 surges.

We maintain third-party insurance for a number of risk management activities including but not limited to workers’ compensation, cyber, directors & officers, general liability, property and employee-related health care benefits.

We evaluate our insurance requirements on an ongoing basis to ensure we maintain adequate levels of coverage.

1 unchanged sentence

Our Purpose, Beliefs and Core Values

The success and growth of Five Below is the direct result of our employees (whom we call "crew members") who embrace our purpose, our beliefs and our core values.

The success and growth of Five Below is the direct result of our crew who embrace our purpose, our beliefs and our core values.

- Our Purpose -

3 unchanged sentences

- Our Five Core Values -

Five Below knows life is way better when you're free to Let Go and Have Fun in an amazing experience filled with unlimited possibilities priced so low we make it easy to say YES!

Five Below believes life is better when customers are free to Let Go and Have Fun in an amazing experience filled with unlimited possibilities priced so low we make it easy to say YES!

to the newest, coolest stuff!

10 unchanged sentences

• Work Hard, Have Fun and Build a Career

As of January 29, 2022, we employed approximately 6,100 full-time and 14,100 part-time employees.

Of our total employees, approximately 600 were corporate, approximately 1,100 were based at our distribution centers in Pedricktown, New Jersey, Olive Branch, Mississippi, Forsyth, Georgia, Conroe, Texas, Cincinnati, Ohio and Buckeye, Arizona and approximately 18,500 were store employees located in 40 states throughout the United States.

The number of part-time employees fluctuates depending on seasonal needs.

None of our employees belong to a union or are party to any collective bargaining or similar agreement.

COVID-19 Response

As a result of the COVID-19 pandemic, we responded quickly to put the safety of our employees first.

For the health and safety of our corporate employees, we implemented a work from home policy in March 2020.

In our distribution centers, we remained operational as we quickly adopted safety protocols.

As for the stores, as a result of federal, state and local restrictions and out of concern for our customers and employees, we temporarily closed all of our stores as of March 20, 2020.

We began reopening our stores at the end of April 2020 only after extensive safety protocols were introduced.

We established robust safety protocols at all of our workplaces, including offices, stores, and distribution centers, summarized below (all in accordance with applicable federal, state and local standards):

Mitigation Measure Corporate Stores Distribution Centers

Mandatory face coverings for all employees and customers, where required by law X X X

Daily health checks, where required by law X X X

Additional signage, floor decals and reminder messaging regarding social distancing X X X

Increased sanitization of high touch surfaces X X X

Established policies for COVID-19 exposure, contact tracing and remediation X X X

Implemented COVID-19 sick pay policy for impacted employees X X X

Restricted non-essential employee travel X X X

Implemented work from home policy and limited mandatory in-person meetings X

Installation of plexiglass barriers at workstations / point-of-sale, where required by law X X

Adopted occupancy limitations (employees and customers as applicable) X X

Further roll out of employee self-assisted check-out in stores X

Established COVID-19 hotline for employees X X X

As of January 28, 2023, we employed approximately 6,500 full-time and 15,400 part-time crew.

Of our total crew, approximately 700 were corporate, approximately 900 were based at our shipcenters in Pedricktown, New Jersey, Forsyth, Georgia, Conroe, Texas, Buckeye, Arizona, and Indianapolis, Indiana and approximately 20,300 were store crew located in 42 states throughout the United States.

The number of part-time crew fluctuates depending on seasonal needs.

None of our crew belong to a union or are party to any collective bargaining or similar agreement.

Total Rewards

We provide a comprehensive suite of benefits designed to help employees and their families stay healthy, meet their financial goals, protect their income and help them balance their work and personal lives.

We provide a comprehensive suite of benefits designed to help crew and their families stay healthy, meet their financial goals, protect their income and help them balance their work and personal lives.

We provide competitive pay and significant career growth opportunities all within a culture that values diverse viewpoints and contributions at every level.

7 unchanged sentences

Mental health support with medical benefits coverage

Employee assistance program with supplemental mental health support

Medical option for part-time employees

Life and Disability No cost life and disability coverage provided for all full-time employees

Supplemental life plan at option and cost of employees

Crew assistance program with supplemental mental health support

Medical option for part-time crew

Life and Disability No cost life and disability coverage provided for all full-time crew

Supplemental life plan at option and cost of crew

401(k) 401(k) retirement savings option with safe harbor Company match

Other In-store employee discount

Other In-store crew discount

Employee Stock Purchase Plan

Paid time off provided to all full-time employees

Paid parental leave provided to all full-time employees

Paid time off provided to all full-time crew

Paid parental leave provided to all full-time crew

Identification theft, pet insurance, legal services access, term life, as well as supplemental accident, hospital indemnity, and critical illness coverage

Employment Practices

We aim to provide challenging, meaningful and rewarding opportunities for personal and professional growth of all employees and encourage all employees to bring their unique backgrounds and experiences to the table to work together.

In order to promote the desired work environment, we have adopted policies which describe the standards of respect, inclusivity and professionalism expected of all employees.

We aim to provide challenging, meaningful and rewarding opportunities for personal and professional growth of all crew and encourage all crew to bring their unique backgrounds and experiences to the table to work together.

In order to promote the desired work environment, we have adopted policies which describe the standards of respect, inclusivity and professionalism expected of all crew.

As an equal opportunity employer, we comply with all federal, state and local laws.

This means that we make all employment decisions (such as who to recruit, hire, train, promote, transfer, and terminate, as well as compensation decisions) without considering an employee’s or applicant’s sex, race, religion, color, gender (including gender identity and gender expression), national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status, registered domestic partner status, age, sexual orientation, military and veteran status or any other characteristic protected by federal, state or local law.

We do not and will not tolerate harassment, discrimination, retaliation, and disrespectful or other unprofessional conduct against employees or any other covered persons based on any protected characteristic.

This means that we make all employment decisions (such as who to recruit, hire, train, promote, transfer, and terminate, as well as compensation decisions) without considering an crew’s or applicant’s sex, race, religion, color, gender (including gender identity and gender expression), national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status, registered domestic partner status, age, sexual orientation, military and veteran status or any other characteristic protected by federal, state or local law.

We do not and will not tolerate harassment, discrimination, retaliation, and disrespectful or other unprofessional conduct against crew or any other covered persons based on any protected characteristic.

We also prohibit discrimination, harassment, disrespectful or unprofessional conduct based on the perception that anyone has any of those characteristics or is associated with a person who has or is perceived as having any of those characteristics.

1 unchanged sentence

Furthermore, we are committed to maintaining a workplace free from sexual harassment and unwelcome conduct and recognizes sexual harassment as a form of workplace discrimination.

We promote and strive to maintain a safe and healthy work environment and conduct our business in ways that protect our employees’ safety and are sensitive to the environment.

We promote and strive to maintain a safe and healthy work environment and conduct our business in ways that protect our crew’s safety and are sensitive to the environment.

We are committed to maintaining a drug-free workplace and prohibit the manufacture, distribution, sale, purchase, transfer, possession, or use of illegal substances in the workplace, while representing us outside the workplace or if such activity affects work performance or the work environment of the Company.

We encourage open, timely communications that help us achieve organizational goals, share information, increase understanding, participate in the decision-making process, enhance our pride in the organization and provide recognition for our work-related successes.

We believe our policies and practices are in compliance with all applicable laws and have been designed with significant inputs from the employees themselves.

Retention of our talented employees is an important focus for us.

We, therefore, monitor employee turnover, particularly at the store management level and employ various strategies to strive to improve our turnover rate.

Employee Engagement

We engage our employees in a variety of ways, including:

conducting an annual employee survey to directly engage with, and collect feedback from our employees, maintaining an open-door policy for employees to report concerns, and providing an anonymous reporting hotline, available in multiple languages and managed by an independent company not affiliated with us, to allow employees to voice concerns freely.

We conduct an annual employee survey to measure employee engagement.

The survey results help us understand the employee experience, evaluate our performance, identify our strengths, and pinpoint opportunities for improvement.

We believe our policies and practices are in compliance with all applicable laws and have been designed with significant inputs from the crew themselves.

Retention of our talented crew is an important focus for us.

We, therefore, monitor crew turnover, particularly at the store management level and employ various strategies to strive to improve our turnover rate.

Crew Engagement

We engage our crew in a variety of ways, including:

conducting an annual crew survey to directly engage with, and collect feedback from our crew, maintaining an open-door policy for crew to report concerns, and providing an anonymous reporting hotline, available in multiple languages and managed by an independent company not affiliated with us, to allow crew to voice concerns freely.

The annual crew survey results help us understand the crew experience, evaluate our performance, identify our strengths, and pinpoint opportunities for improvement.

Starting in fiscal 2020, we partnered with Gallup, Inc., a global analytics and advisory firm, to monitor and improve the engagement of our workforce.

We utilize the survey results to identify strengths and weaknesses and create action plans to improve engagement and, ultimately, team performance.

In 2021 a high percentage of our employees participated in the survey, and the results demonstrated that our overall engagement levels exceed Gallup’s averages in retail, in the United States and worldwide.

The results also reflected that we are a mission-driven company with employees’ response on our strength of purpose far exceeding Gallup’s measurement for world class.

In 2022 a high percentage of our crew participated in the survey, and the results demonstrated that our overall engagement levels exceed Gallup’s averages in retail, in the United States and worldwide.

The results also reflected that we are a mission-driven company with crew’s response on our strength of purpose far exceeding Gallup’s measurement for world class.

Our business is seasonal in nature with the highest level of net sales and net income generated in the fourth fiscal quarter due to the year-end holiday season and, therefore, operating results for any fiscal quarter are not necessarily indicative of results for the full fiscal year.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business