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Summary of Significant Accounting Policies (Policies) | 6 Months Ended
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Jul. 31, 2021
Accounting Policies [Abstract] |
Nature of Business | Description of Business Five Below, Inc. (collectively referred to herein with its wholly owned subsidiary as the "Company") is a specialty value retailer offering merchandise targeted at the tween and teen demographic. The Company offers an edited assortment of products, with most priced at $5 and below. The Company’s edited assortment of products includes select brands and licensed merchandise. The Company believes its merchandise is readily available, and that there are a number of potential vendors that could be utilized, if necessary, under approximately the same terms the Company is currently receiving; 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 July 31, 2021, operated in 39 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 and Utah. As of July 31, 2021 and August 1, 2020, the Company operated 1,121 stores and 982 stores, respectively, each operating under the name “Five Below,” and sells merchandise on the internet, through the Company's fivebelow.com e-commerce website.
Fiscal Year | The Company operates on a 52/53-week fiscal year ending on the Saturday closest to January 31. References to "fiscal year 2021" or "fiscal 2021" refer to the period from January 31, 2021 to January 29, 2022, which is 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 is a 52-week fiscal year. The fiscal quarters ended July 31, 2021 and August 1, 2020 refer to the thirteen weeks ended as of those dates. The year-to-date periods ended July 31, 2021 and August 1, 2020 refer to the twenty-six weeks ended as of those dates.
Basis of Presentation | The consolidated balance sheets as of July 31, 2021 and August 1, 2020, the consolidated statements of operations for the thirteen and twenty-six weeks ended July 31, 2021 and August 1, 2020, the consolidated statements of shareholders’ equity for the thirteen and twenty-six weeks ended July 31, 2021 and August 1, 2020 and the consolidated statements of cash flows for the twenty-six weeks ended July 31, 2021 and August 1, 2020 have been prepared by the Company in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim reporting and are unaudited. In the opinion of management, the aforementioned financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations and cash flows for the periods ended July 31, 2021 and August 1, 2020. The balance sheet as of January 30, 2021, presented herein, has been derived from the audited balance sheet included in the Company's Annual Report on Form 10-K for fiscal 2020 as filed with the Securities and Exchange Commission on March 18, 2021 and referred to herein as the “Annual Report,” but does not include all annual disclosures required by U.S. GAAP. These consolidated financial statements should be read in conjunction with the consolidated financial statements for the fiscal year ended January 30, 2021 and footnotes thereto included in the Annual Report. The consolidated results of operations for the thirteen and twenty-six weeks ended July 31, 2021 and August 1, 2020 are not necessarily indicative of the consolidated operating results for the year ending January 29, 2022 or any other period. The Company's business is seasonal and as a result, the Company's net sales fluctuate from quarter to quarter. Net sales are usually highest in the fourth fiscal quarter due to the year-end holiday season.
Recently Issued Accounting Pronouncements | In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). The pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. 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 impact of the adoption of ASU 2020-04 is not expected to be significant to the Company's consolidated financial statements.
Use of Estimates | The preparation of the consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the carrying amount of property and equipment, net realizable value for inventories, income taxes, share-based compensation expense and the incremental borrowing rate utilized in operating lease liabilities.
Fair Value of Financial Instruments | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation at the measurement date: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs, other than Level 1, that are either directly or indirectly observable. Level 3: Unobservable inputs developed using the Company’s estimates and assumptions which reflect those that market participants would use. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement. The Company’s financial instruments consist primarily of cash equivalents, investment securities, accounts payable, and borrowings, if any, under a line of credit. The Company believes that: (1) the carrying value of cash equivalents and accounts payable are representative of their respective fair value due to the short-term nature of these instruments; and (2) the carrying value of the borrowings, if any, under the line of credit approximates fair value because the line of credit’s interest rates vary with market interest rates. Under the fair value hierarchy, the fair market values of the investments in corporate bonds are Level 1 while the investments in municipal bonds are Level 2. The fair market values of Level 2 instruments are determined by management with the assistance of a third-party pricing service. Since quoted prices in active markets for identical assets are not available, these prices are determined by the third-party pricing service using observable market information such as quotes from less active markets and quoted prices of similar securities. As of July 31, 2021, January 30, 2021, and August 1, 2020, the Company had cash equivalents of $73.9 million, $250.7 million and $144.1 million, respectively. The Company’s cash equivalents consist of credit and debit card receivables, money market funds, and corporate bonds with original maturities of 90 days or less. Fair value for cash equivalents was determined based on Level 1 inputs. As of July 31, 2021, January 30, 2021, and August 1, 2020, the Company's investment securities are classified as held-to-maturity since the Company has the intent and ability to hold the investments to maturity. Such securities are carried at amortized cost plus accrued interest and consist of the following (in thousands):
|  | As of July 31, 2021
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Market Value
Short-term: |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 234,909 |  |  | $ | — |  |  | $ | 49 |  |  | $ | 234,860 |
Municipal bonds |  | 52,020 |  |  | — |  |  | 6 |  |  | 52,014 |
Total |  | $ | 286,929 |  |  | $ | — |  |  | $ | 55 |  |  | $ | 286,874 |
Long-term: |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 1,104 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1,105 |
Total |  | $ | 1,104 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1,105 |
|  | As of January 30, 2021
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Market Value
Short-term: |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 95,530 |  |  | $ | — |  |  | $ | 53 |  |  | $ | 95,477 |
Municipal bonds |  | 45,398 |  |  | — |  |  | 7 |  |  | 45,391 |
Total |  | $ | 140,928 |  |  | $ | — |  |  | $ | 60 |  |  | $ | 140,868 |
|  | As of August 1, 2020
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Market Value
Short-term: |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 41,670 |  |  | $ | 65 |  |  | $ | — |  |  | $ | 41,735 |
Total |  | $ | 41,670 |  |  | $ | 65 |  |  | $ | — |  |  | $ | 41,735 |
Short-term investment securities as of July 31, 2021, January 30, 2021, and August 1, 2020 all mature in one year or less. Long-term investment securities as of July 31, 2021 all mature after one year but in less than two years.
Revenue Transactions | Revenue from Contracts with Customers Revenue Transactions Revenue from store operations is recognized at the point of sale when control of the product is transferred to the customer at such time. Internet sales, through the Company's fivebelow.com e-commerce website, are recognized when the customer receives the product as control transfers upon delivery. Returns subsequent to the period end are immaterial; accordingly, no significant reserve has been recorded. Gift card sales to customers are initially recorded as liabilities and recognized as sales upon redemption for merchandise or as breakage revenue in proportion to the pattern of redemption of the gift cards by the customer in net sales. The transaction price for the Company’s sales is based on the item’s stated price. To the extent that the Company charges customers for shipping and handling on e-commerce sales, the Company records such amounts in net sales. Shipping and handling costs, which include fulfillment and shipping costs related to the Company's e-commerce operations, are included in costs of goods sold. As permitted by applicable accounting guidance, the Company has elected to exclude all sales taxes from net sales in the accompanying consolidated statements of operations. Disaggregation of Revenue The following table provides information about disaggregated revenue by groups of products: leisure, fashion and home, and party and snack (in thousands):
| Thirteen Weeks Ended |  | Thirteen Weeks Ended
| July 31, 2021 |  | August 1, 2020
| Amount |  | Percentage of Net Sales |  | Amount |  | Percentage of Net Sales
Leisure | $ | 328,517 |  |  | 50.8 | % |  | $ | 206,362 |  |  | 48.4 | %
Fashion and home | 191,241 |  |  | 29.6 | % |  | 156,665 |  |  | 36.8 | %
Party and snack | 126,796 |  |  | 19.6 | % |  | 63,083 |  |  | 14.8 | %
Total | $ | 646,554 |  |  | 100.0 | % |  | $ | 426,110 |  |  | 100.0 | %
| Twenty-Six Weeks Ended |  | Twenty-Six Weeks Ended
| July 31, 2021 |  | August 1, 2020
| Amount |  | Percentage of Net Sales |  | Amount |  | Percentage of Net Sales
Leisure | $ | 625,290 |  |  | 50.2 | % |  | $ | 302,712 |  |  | 48.3 | %
Fashion and home | 370,933 |  |  | 29.8 | % |  | 223,843 |  |  | 35.7 | %
Party and snack | 248,154 |  |  | 20.0 | % |  | 100,454 |  |  | 16.0 | %
Total | $ | 1,244,377 |  |  | 100.0 | % |  | $ | 627,009 |  |  | 100.0 | %
Deferred Compensation | The Company approved and adopted the Five Below, Inc. Nonqualified Deferred Compensation Plan (the "Plan") and a related, irrevocable grantor trust (the "Trust") during the thirteen weeks ended July 31, 2021. The Plan provides eligible key employees 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. Payments under the Plan will be made from the general assets of the Company or from the assets of the Trust, funded by the Company. The related liability will be recorded as deferred compensation and included in other long-term liabilities in the consolidated balance sheets.

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