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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-03-16 compared with 2022-03-30 · 68 added, 79 removed, 622 unchanged (19% of the section changed)

7 unchanged sentences

As of January 28, 2023, we had approximatel y $192 million available on the line of credit.

The Credit Agreement provides that the interest rate payable on borrowings shall be, at the Company’s option, a per annum rate equal to (a) a base rate plus an applicable margin ranging from 0.25% to 0.75% or (b) a LIBOR rate plus a margin ranging from 1.25% to 1.75%.

Letter of credit fees range from 1.25% to 1.75%.

The interest rate and letter of credit fees under the Credit Agreement are subject to an increase of 2.00% per annum upon an event of default.

Giving effect to the Second Amendment, outstanding borrowings under the Revolving Credit Facility would accrue interest at floating rates plus an applicable margin ranging from 1.12% to 1.50% for SOFR loans and 0.125% to 0.50% for base rate loans, and letter of credit fees range from 1.125% to 1.50%, in each case based on the average availability under the Revolving Credit Facility.

We do not use derivative financial instruments for speculative or trading purposes, but this does not preclude our adoption of specific hedging strategies in the future.

95 unchanged sentences

Operating income 345,043 379,880 154,803

Interest (expense) income and other (expense) income, net ( 13,177 ) ( 1,736 ) 4,285

Interest income (expense) and other income (expense), net 2,491 ( 13,177 ) ( 1,736 )

Income before income taxes 347,534 366,703 153,067

18 unchanged sentences

Issuance of unrestricted stock awards 1,518 — 208 — 208

1,634 — 198 — 198

Exercise of options to purchase common stock 176,846 2 5,344 — 5,346

141,582 2 4,107 — 4,109

Vesting of restricted stock units and performance-based restricted stock units 230,002 2 — — 2

3 unchanged sentences

Net income — — — 123,361 123,361

Balance, February 1, 2020 55,712,067 557 322,330 436,891 759,778

Balance, January 30, 2021 55,935,237 559 321,075 560,252 881,886

Share-based compensation expense — — 25,378 — 25,378

6 unchanged sentences

Repurchase and retirement of common stock

( 368,699 ) ( 4 ) ( 60,007 ) — ( 60,011 )

Issuance of common stock to employees under employee stock purchase plan 3,817 — 828 — 828

Net income — — — 123,361 123,361

— — — 278,810 278,810

Balance, January 29, 2022 55,662,400 556 280,666 839,062 1,120,284

1 unchanged sentence

Issuance of unrestricted stock awards 3,349 — 523 523

1,790 — 335 — 335

Exercise of options to purchase common stock 21,737 — 776 776

12,834 — 389 — 389

Vesting of restricted stock units and performance-based restricted stock units 122,349 1 1

1 unchanged sentence

Repurchase and retirement of common stock ( 247,132 ) ( 2 ) ( 40,005 ) ( 40,007 )

( 368,699 ) ( 4 ) ( 60,007 ) — ( 60,011 )

Issuance of common stock to employees under employee stock purchase plan 6,489 — 824 824

— — — 278,810 278,810

Net income 261,528 261,528

Balance, January 28, 2023 55,537,221 $ 555 $ 260,784 $ 1,100,590 $ 1,361,929

35 unchanged sentences

Net cash used in financing activities ( 43,635 ) ( 66,125 ) ( 12,784 )

Net (decrease) increase in cash and cash equivalents ( 203,810 ) 66,293 ( 49,258 )

Net increase (decrease) in cash and cash equivalents 267,351 ( 203,810 ) 66,293

Cash and cash equivalents at beginning of year 64,973 268,783 202,490

16 unchanged sentences

thus, it is not dependent on a single vendor or a group of vendors.

The Company is incorporated in the Commonwealth of Pennsylvania and, as of January 29, 2022, operated in 40 states that include Pennsylvania, New Jersey, Delaware, Maryland, Virginia, Massachusetts, New Hampshire, West Virginia, North Carolina, New York, Connecticut, Rhode Island, Ohio, Illinois, Indiana, Michigan, Missouri, Georgia, Texas, Tennessee, Maine, Alabama, Kentucky, Kansas, Florida, South Carolina, Mississippi, Louisiana, Wisconsin, Oklahoma, Minnesota, California, Arkansas, Iowa, Nebraska, Arizona, Nevada, Colorado, Utah, and New Mexico.

As of January 29, 2022 and January 30, 2021, the Company operated 1,190 stores and 1,020 stores, respectively, each operating under the name “Five Below,” and sells merchandise on the internet, through the Company's fivebelow.com e-commerce website.

The Company is incorporated in the Commonwealth of Pennsylvania and, as of January 28, 2023, operated in 42 states excluding Alaska, Hawaii, Idaho, Montana, Oregon, Vermont, Washington and Wyoming.

As of January 28, 2023 and January 29, 2022, the Company operated 1,340 stores and 1,190 stores, respectively, each operating under the name “Five Below,” and sells merchandise on the internet, through the Company's 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.

The Company's consolidated financial statements include the accounts of Five Below, Inc.

7 unchanged sentences

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.

References to "fiscal year 2021" or "fiscal 2021" refer to the period from January 31, 2021 to January 29, 2022, which consists of a 52-week fiscal year.

References to "fiscal year 2020" or "fiscal 2020" refer to the period from February 2, 2020 to January 30, 2021, which consists of a 52-week fiscal year.

References to "fiscal year 2019" or "fiscal 2019" refer to the period from February 3, 2019 to February 1, 2020, which consists of a 52-week fiscal year.

(d) Cash and Cash Equivalents

26 unchanged sentences

$ 66,845 $ — $ 292 $ 66,553

Municipal bonds

41,072 — 44 41,028

Total $ 66,845 $ — $ 292 $ 66,553

Corporate bonds

$ 37,717 $ — $ 199 $ 37,518

Total $ 37,717 $ — $ 199 $ 37,518

As of January 29, 2022

5 unchanged sentences

$ 277,141 $ — $ 330 $ 276,811

Corporate bonds $ 37,717 $ — $ 199 $ 37,518

Total $ 37,717 $ — $ 199 $ 37,518

Short-term investment securities as of January 28, 2023 and January 29, 2022 all mature in one year or less.

16 unchanged sentences

Store leasehold improvements are amortized over the shorter of the useful life or the lease term plus assumed extensions, which is generally ten years .

Leasehold improvements located in the distribution centers and the corporate headquarters are amortized over the shorter of the useful life or the lease term.

Leasehold improvements located in the shipcenters and the corporate headquarters are amortized over the shorter of the useful life or the lease term.

Depreciation and amortization expense for property and equipment, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations, was $ 105.6 million, $ 84.8 million and $ 69.3 million in fiscal 2022, fiscal 2021 and fiscal 2020, respectively.

17 unchanged sentences

In the event of a store closure, the Company will record an impairment charge, if appropriate, or accelerate depreciation over the revised useful life of the asset.

Based on the Company's analysis performed in fiscal 2021 and fiscal 2020, management believes that no impairment of long-lived assets exists for the periods ended January 29, 2022 and January 30, 2021.

Based on the Company's analysis performed in fiscal 2022, fiscal 2021 and fiscal 2020, management believes that no impairment of long-lived assets exists for the periods ended January 28, 2023, January 29, 2022 and January 30, 2021.

(j) Deferred Financing Costs

2 unchanged sentences

(k) Operating Leases

The Company leases store locations, distribution centers, the corporate headquarters and equipment used in its operations and evaluates and classifies its leases as operating or capital leases for financial reporting purposes.

The Company leases store locations, shipcenters, the corporate headquarters and equipment used in its operations and evaluates and classifies its leases as operating or capital leases for financial reporting purposes.

Any assets held under a finance lease are included in property and equipment, net.

5 unchanged sentences

The lease agreement expires in early 2033 with three successive options to renew for additional terms up to approximately fifteen years.

The distribution center in Olive Branch, Mississippi is leased under a lease agreement expiring in 2022 with options to renew for three successive five-year periods.

The distribution center in Pedricktown, New Jersey is leased under a lease agreement expiring in 2025 with options to renew for three successive five-year periods.

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, the Company expects to cease operations at the Company's distribution centers in Olive Branch, Mississippi and Cincinnati, Ohio in the first half of fiscal 2022, and expects the costs incurred to be immaterial to its consolidated statements of operations.

The shipcenter in Pedricktown, New Jersey is leased under a lease agreement expiring in 2025 with options to renew for three successive five-year periods.

Generally, the Company’s store leases have expected lease terms of ten years, which are comprised of an initial term of ten years or an initial term of five years and one assumed five-year extension, resulting in a ten-year life.

8 unchanged sentences

Nonqualified Deferred Compensation Plan (the "Deferred Comp Plan") and a related, irrevocable grantor trust (the "Trust") during fiscal 2021.

The Deferred Comp Plan provides eligible key employees with the opportunity to elect to defer up to 80% of their eligible compensation.

The Deferred Comp Plan provides eligible key crew with the opportunity to elect to defer up to 80% of their eligible compensation.

The Company may make discretionary contributions, at the discretion of the Board.

7 unchanged sentences

Also related to this investment, management recorded a reserve against outstanding debt owed to the Company based on management’s evaluation of collectability.

The total amount of impairment and reserve was approximately $ 9.7 million and was recorded in interest (expense) income and other (expense) income, net in the consolidated statements of operations.

The total amount of impairment and reserve was approximately $ 9.7 million and was recorded in interest income (expense) and other income (expense), net in the consolidated statements of operations.

(o) Share-Based Compensation

The Company measures the cost of employee services received in exchange for share-based compensation based on the grant date fair value of the employee stock award.

The Company recognizes compensation expense generally on a straight-line basis over the employee's requisite service period (generally the vesting period of the equity grant) based on the estimated grant date fair value of restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") except for PSUs that have a market condition based on its total shareholder return relative to a pre-defined peer group, which are subject to multi-year performance objectives with vesting periods of approximately three years from the date of grant (if the applicable performance objectives are achieved).

The fair value of these PSUs that have a market condition are determined using a Monte Carlo valuation model.

The Company measures the cost of crew services received in exchange for share-based compensation based on the grant date fair value of the employee stock award.

The Company recognizes compensation expense generally on a straight-line basis over the crew's requisite service period (generally the vesting period of the equity grant) based on the estimated grant date fair value of restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") except for PSUs that have a market condition based on its total shareholder return relative to a pre-defined peer group, which are subject to multi-year performance objectives with vesting periods of approximately three years from the date of grant (if the applicable performance objectives are achieved).

The fair value of these PSUs are determined using a Monte Carlo simulation model, which utilizes multiple input variables such as (i) total shareholder return from the beginning of the performance cycle through the performance measurement date(s);

(ii) volatility;

(iii) risk-free interest rates;

and (iv) the correlation of the pre-defined peer group's total shareholder return.

The Company uses the Black-Scholes option-pricing model for grants of stock options.

19 unchanged sentences

Store occupancy costs include rent, common area maintenance, utilities and property taxes for all store locations.

Distribution costs include costs for receiving, processing, warehousing and shipping of merchandise to or from the Company's distribution centers and between store locations.

Distribution costs include costs for receiving, processing, warehousing and shipping of merchandise to or from the Company's shipcenters and between store locations.

Buying costs include compensation expense for the Company's internal buying organization.

37 unchanged sentences

The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

The Company is currently evaluating the impact the adoption of ASU 2020-04 will have on its consolidated financial statements.

The Company determined that the impact of the adoption of ASU 2020-04 will not have a material impact on its consolidated financial statements.

(2) Revenue from Contracts with Customers

1 unchanged sentence

The following table provides information about disaggregated revenue by groups of products:

leisure, fashion and home, and party and snack (in thousands):

leisure, fashion and home, and snack and seasonal (in thousands):

Fiscal Year Fiscal Year Fiscal Year

1 unchanged sentence

Amount Percentage of Net Sales Amount Percentage of Net Sales Amount Percentage of Net Sales

Leisure $ 1,363,432 47.8 % $ 928,342 47.3 % $ 919,627 49.8 %

$ 1,465,402 47.6 % $ 1,412,382 49.6 % $ 965,816 49.2 %

Fashion and home 898,187 29.2 % 859,586 30.2 % 701,461 35.8 %

Party and snack 625,336 22.0 % 332,334 16.9 % 349,645 18.9 %

Snack and seasonal (1)

712,719 23.2 % 576,386 20.2 % 294,860 15.0 %

Total $ 3,076,308 100.0 % $ 2,848,354 100.0 % $ 1,962,137 100.0 %

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

The Company determines if an arrangement contains a lease at the inception of a contract.

14 unchanged sentences

These fixed payments are considered part of the lease payment and included in the operating lease assets and operating lease liabilities.

In response to the COVID-19 pandemic, certain of the Company's landlords agreed to temporary rent concessions.

These rent concessions generally related to deferrals and abatements of certain rent payments due between April 2020 through October 2020 into future periods.

In accordance with the Financial Accounting Standards Board's staff guidance regarding rent concessions related to the effects of the COVID-19 pandemic, the Company has elected to account for the concessions agreed to by landlords that do not result in a substantial increase in the obligations of the lessee as if the enforceable rights and obligations for those concessions existed in the original lease agreements and the Company has elected to not remeasure the related lease liabilities and right-of-use assets.

For qualifying rent abatement concessions, the Company has recorded negative variable lease expense for the amount of the concession during the period of relief, and for qualifying deferrals of rental payments, the Company has recognized a non-interest bearing payable in lieu of recognizing a decrease in cash for the lease payment that would have been made based on the original terms of the lease agreement, which will be reduced when the deferred payment is made in the future.

All of the Company's leases are classified as operating leases and the associated assets and liabilities are presented as separate captions in the consolidated balance sheets.

40 unchanged sentences

Diluted income per common share $ 4.69 $ 4.95 $ 2.20

The effects of the assumed vesting of restricted stock units outstanding as of January 29, 2022, January 30, 2021 and February 1, 2020 for 9,781 , 20,425 and 576 shares of common stock, respectively, were excluded from the fiscal 2021, fiscal 2020 and fiscal 2019 calculation of diluted income per common share as their impact would have been anti-dilutive.

The effects of the assumed vesting of restricted stock units outstanding as of January 28, 2023, January 29, 2022 and January 30, 2020 for 72,043 , 9,781 and 20,425 shares of common stock, respectively, were excluded from the fiscal 2022, fiscal 2021 and fiscal 2020 calculation of diluted income per common share as their impact would have been anti-dilutive.

The aforementioned excluded shares do not reflect the impact of any incremental repurchases under the treasury stock method.

(5) Line of Credit

On January 27, 2021, the Company entered into a First Amendment to Credit Agreement (the “First Amendment”) which amended the Fifth Amended and Restated Credit Agreement (as amended by the Fifth Amendment, the "Credit Agreement") dated April 24, 2020 among the Company, 1616 Holdings, Inc., a wholly-owned subsidiary of the Company ("1616 Holdings" and together with the Company, the "Loan Parties"), Wells Fargo Bank, National Association as administrative agent (the "Agent"), and other lenders party thereto (the "Lenders").

On September 16, 2022, the Company entered into a Second Amendment to Credit Agreement (the "Second Amendment") which amended the Fifth Amended and Restated Credit Agreement, dated as of April 24, 2020, as previously amended by that certain First Amendment to Credit Agreement, dated as of January 27, 2021 (the "First Amendment";

the Fifth Amended and Restated Credit Agreement as amended by the First Amendment and the Second Amendment, the “Credit Agreement”), among the Company, 1616 Holdings, Inc., a wholly-owned subsidiary of the Company ("1616 Holdings" and together with the Company, the "Loan Parties"), Wells Fargo Bank, National Association as administrative agent (the "Agent"), and other lenders party thereto (the "Lenders").

The Credit Agreement provides for a secured asset-based revolving line of credit in the amount of up to $ 225 million (the "Revolving Credit Facility").

Advances under the Revolving Credit Facility are tied to a borrow base consisting of eligible credit card receivables and inventory, as reduced by certain reserves in effect from time to time.

Advances under the Revolving Credit Facility are tied to a borrowing base consisting of eligible credit card receivables and inventory, as reduced by certain reserves in effect from time to time.

Pursuant to the Credit Agreement, inventory appraisals and certain other diligence items are deferred, with reduced advance rates during the period that such appraisals have not been delivered.

The Revolving Credit Facility expires on the earliest to occur of (i) April 24, 2023 or (ii) an event of default.

Pursuant to the Second Amendment, the Revolving Credit Facility expires on the earliest to occur of (i) September 16, 2027 or (ii) an event of default.

The Second Amendment also replaced the existing LIBOR rate provisions with SOFR rate provisions which converted then outstanding LIBOR loans into SOFR loans and additionally makes a number of other revisions to other provisions of the Credit Agreement.

Giving effect to the Second Amendment, outstanding borrowings under the Revolving Credit Facility would accrue interest at floating rates plus an applicable margin ranging from 1.12 % to 1.50 % for SOFR loans and 0.125 % to 0.50 % for base rate loans, and letter of credit fees range from 1.125 % to 1.50 %, in each case based on the average availability under the Revolving Credit Facility.

The Revolving Credit Facility may be increased up to $ 150.0 million, subject to certain conditions, including obtaining commitments from one or more Lenders (the "Accordion").

1 unchanged sentence

The entire amount of the Revolving Credit Facility is available for the issuance of letters of credit and allows for swingline loans.

The Credit Agreement provides that the interest rate payable on borrowings shall be, at the Company's option, a per annum rate equal to (a) a base rate plus an applicable margin ranging from 0.25 % to 0.75 % or (b) a LIBOR rate plus a margin ranging from 1.25 % to 1.75 %.

Letter of credit fees range from 1.25 % to 1.75 %.

The interest rate and letter of credit fees under the Credit Agreement are subject to an increase of 2.00 % per annum upon an event of default.

The Credit Agreement contains customary covenants that limits, absent lender approval, the ability of the Company and certain of its affiliates to, among other things, pay cash dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, enter into certain acquisition transactions with affiliates, merge, dissolve, repay certain indebtedness, change the nature of the Company's business, enter sale or leaseback transactions, make investments or dispose of assets.

In some cases, these restrictions are subject to certain negotiated exceptions or permit Company to undertake otherwise restricted activities if it satisfies certain conditions.

The Credit Agreement contains customary covenants that limit, absent lender approval, the ability of the Company and certain of its affiliates to, among other things, pay cash dividends, incur debt, create liens and encumbrances, redeem or repurchase stock, enter into certain acquisition transactions with affiliates, merge, dissolve, repay certain indebtedness, change the nature of the Company’s business, enter sale or leaseback transactions, make investments or dispose of assets.

In some cases, these restrictions are subject to certain negotiated exceptions or permit the Company to undertake otherwise restricted activities if it satisfies certain conditions.

In addition, the Company will be required to maintain availability of not less than (i) 12.5 % of the lesser of (x) aggregate commitments under the Revolving Credit Facility and (y) the borrowing base (the "loan cap") during the period that inventory appraisals have not been delivered as described above and (ii) at all other times 10.0 % of the loan cap.

3 unchanged sentences

All obligations under the Revolving Credit Facility are guaranteed by 1616 Holdings and secured by substantially all of the assets of the Company and 1616 Holdings.

As of January 29, 2022 and January 30, 2021, the Company was in compliance with the covenants applicable to it under the First Amendment and the Revolving Credit Facility.

As of January 28, 2023 and January 29, 2022, the Company was in compliance with the covenants applicable to it under the Revolving Credit Facility.

During fiscal 2022 and fiscal 2021, the Company had no borrowings or interest expense under the Revolving Credit Facility.

4 unchanged sentences

Other Contractual Commitments

The Company has an executive severance plan that is applicable to certain key employees that provide for, among other things, salary, bonus, severance, and change-in-control provisions.

The Company has an executive severance plan that is applicable to certain key crew that provide for, among other things, salary, bonus, severance, and change-in-control provisions.

As of January 28, 2023, the Company has other purchase commitments of approximately $ 15.8 million consisting of purchase agreements for materials that will be used in the construction of new stores.

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

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, the Company acquired land in Indianapolis, Indiana, to build an approximately 1,030,000 square foot distribution center to support the Company's anticipated growth.

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

The Company expects to occupy the distribution center in the first half of 2022.

Contingencies

5 unchanged sentences

The holders of the common stock are entitled to one vote per share of common stock and are entitled to receive dividends if declared by the Board of Directors.

The preferred stock may be issued from time to time in series as designated by the Board of Directors.

The preferred stock may be issued

from time to time in series as designated by the Board of Directors.

The designations, powers, preferences, voting rights, privileges, options, conversion rights, and other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof shall be designated by the Board of Directors.

2 unchanged sentences

The number of shares of common stock reserved for issuance, which is subject to other limitations, is 500,000 shares.

The ESPP allows eligible employees the opportunity to purchase, subject to limitations, shares of the Company’s common stock through payroll deductions at a discount of 10 % of the fair market value of such shares on the purchase date.

The ESPP allows eligible crew the opportunity to purchase, subject to limitations, shares of the Company’s common stock through payroll deductions at a discount of 10 % of the fair market value of such shares on the purchase date.

In fiscal 2022, the Company issued 6,489 shares of common stock under the ESPP resulting in proceeds of $ 0.8 million and recorded share-based compensation expense of $ 78 thousand in connection with the ESPP related to the amount of the discount.

3 unchanged sentences

Equity Incentive Plan

Pursuant to the Company's 2002 Equity Incentive Plan (the “Plan”), the Company’s Board of Directors may grant stock options, restricted shares and restricted stock units to officers, directors, key employees and professional service providers.

Pursuant to the Company's 2022 Equity Incentive Plan (the “Plan”), the Company’s Board of Directors may grant stock options, restricted shares and restricted stock units to officers, directors, key crew and professional service providers.

The Plan, as amended, allows for the issuance of up to a total of 4.3 million shares under the Plan.

10 unchanged sentences

Exercised ( 176,846 ) 30.23

Balance as of February 1, 2020 231,525 30.92 4.1

Balance as of January 30, 2021 53,029 33.22 3.2

Forfeited ( 432 ) 4.28

5 unchanged sentences

Exercisable as of January 28, 2023 18,026 $ 34.92 1.8

The fair value of each option award granted to employees, including outside directors, is estimated on the date of grant using the Black-Scholes option-pricing model.

The fair value of each option award granted to crew, including outside directors, is estimated on the date of grant using the Black-Scholes option-pricing model.

The Company did not grant any stock options in fiscal 2022, fiscal 2021 and fiscal 2020.

16 unchanged sentences

PSUs that have a market condition based on our total shareholder return relative to a pre-defined peer group are subject to multi-year performance objectives with vesting periods of approximately three years from the date of grant (if the applicable performance objectives are achieved).

The fair value of these PSUs are determined using a Monte Carlo valuation model.

(ii) volatility;

(iii) risk-free interest rates;

and (iv) the correlation of the pre-defined peer group's total shareholder return.

RSU and PSU activity under the Plan was as follows:

5 unchanged sentences

Forfeited ( 23,519 ) 87.54 ( 340,381 ) 89.54

Non-vested balance as of February 1, 2020 250,352 79.37 357,166 66.96

Non-vested balance as of January 30, 2021 304,398 99.94 259,776 151.73

Granted 77,966 185.62 89,460 196.36

13 unchanged sentences

On March 20, 2018, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of up to $ 100 million of the Company's common stock through March 31, 2021, on the open market, in privately negotiated transactions, or otherwise.

This program expired on March 31, 2021.

On March 9, 2021, our Board of Directors approved a new share repurchase program for up to $ 100 million of its common shares through March 31, 2024.

1 unchanged sentence

In fiscal 2022, the Company repurchased 247,132 shares under this program at an aggregate cost of approximately $ 40.0 million, or an average price of $ 161.88 per share.

In fiscal 2020, the Company repurchased 137,023 shares under this program at an aggregate cost of approximately $ 12.7 million, or an average price of $ 92.42 per share.

In fiscal 2021, the Company repurchased 368,699 shares under this program at an aggregate cost of approximately $ 60.0 million , or an average price of $ 162.75 per share.

Since March 2018, the Company has purchased approximately 865,000 shares for an aggregate cost of approximately $ 112 million.

We have exhausted repurchases under this program.

On June 14, 2022, our Board of Directors approved a new share repurchase program for up to $ 100 million of our common stock through June 30, 2025.

As of January 28, 2023, we have not made any repurchases under this program.

Since approval of the share repurchase program in March 2018, we have purchased approximately 1,100,000 shares for an aggregate cost of approximately $ 150 million.

There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any repurchases.

21 unchanged sentences

(1) Other line includes excess tax benefits relating to share-based payment accounting.

The effective tax rate for fiscal 2022 compared to fiscal 2021 was primarily driven by discrete items, which includes the impact of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" with respect to the requirements to recognize excess income tax benefits or deficiencies as income tax benefit or expense in the consolidated statements of operations rather than as additional paid-in capital in the consolidated balance sheets.

The effective tax rate for fiscal 2021 compared to fiscal 2020 was primarily driven by discrete items, which includes the impact of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" with respect to the requirements to recognize excess income tax benefits or deficiencies as income tax benefit or expense in the consolidated statements of operations rather than as additional paid-in capital in the consolidated balance sheets and the impact of the CARES Act in fiscal 2020.

The effective tax rate for fiscal 2020 compared to fiscal 2019 was primarily driven by discrete items, which includes the impact of the CARES Act, partially offset by a reduction of the benefit of ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting."

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are (in thousands):

5 unchanged sentences

Accrued bonus 2,132 8,224

Deferred rent — —

Operating lease liabilities 379,059 335,960

16 unchanged sentences

(10) Employee Benefit Plan

The Company has a 401(k) Retirement Savings Plan and employees can contribute up to the maximum amount allowed under law.

The Company may make discretionary matching and profit sharing contributions, which vest over a period of five years from each employee’s commencement of employment with the Company.

The Company has a 401(k) Retirement Savings Plan and crew can contribute up to the maximum amount allowed under law.

The Company may make discretionary matching and profit sharing contributions.

During fiscal 2022, fiscal 2021 and fiscal 2020, the Company made matching contributions of $ 5.0 million, $ 4.2 million and $ 2.8 million, respectively.

4 unchanged sentences

Set forth below is data for the following groups of products:

leisure, fashion and home, and party and snack.

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:

3 unchanged sentences

Fashion and home 29.2 % 30.2 % 35.8 %

Party and snack 22.0 % 16.9 % 18.9 %

Snack and seasonal 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.

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.

(12) Quarterly Results of Operations and Seasonality (Unaudited)

11 unchanged sentences

Gross profit $ 452,397 $ 207,808 $ 228,509 $ 206,777 $ 396,894 $ 202,362 $ 230,319 $ 200,869

Net income (loss) $ 140,196 $ 24,177 $ 64,841 $ 49,596 $ 123,937 $ 20,425 $ 29,581 $ ( 50,582 )

Basic income (loss) per common share $ 2.50 $ 0.43 $ 1.16 $ 0.89 $ 2.22 $ 0.37 $ 0.53 $ ( 0.91 )

Diluted income (loss) per common share $ 2.49 $ 0.43 $ 1.15 $ 0.88 $ 2.20 $ 0.36 $ 0.53 $ ( 0.91 )

Net income $ 171,320 $ 16,146 $ 41,344 $ 32,718 $ 140,196 $ 24,177 $ 64,841 $ 49,596

Basic income per common share $ 3.09 $ 0.29 $ 0.74 $ 0.59 $ 2.50 $ 0.43 $ 1.16 $ 0.89

Diluted income per common share $ 3.07 $ 0.29 $ 0.74 $ 0.59 $ 2.49 $ 0.43 $ 1.15 $ 0.88

(1) The sum of the quarterly per share amounts may not equal per share amounts reported for the fiscal year due to rounding.

6 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 7A. Quantitative and Qualitative Disclosures About Market Risk