Good day, everyone and welcome to the Five Below Fourth Quarter Fiscal 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] And please note that today’s event is being recorded. I would now like to turn the conference over to Christiane Pelz, Vice President of Investor Relations. Please go ahead.

Thank you, William. Good afternoon, everyone and thank you for joining us today for Five Below’s fourth quarter and fiscal year 2017 financial results conference call. As a reminder, 2017 was a 53 week year. On today’s call are Joel Anderson, President and Chief Executive Officer and Ken Bull, Chief Financial Officer 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. 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 fivebelow.com. I will now turn the call over to Joel.

Thank you, Christiane and thanks everyone for joining us for our fourth quarter and year end earnings call. I will review the highlights of the quarter and fiscal year as well as discuss thoughts on 2018 before handing it over to Ken to discuss our financials and outlook and then we will open the call up for questions. Our fourth quarter was one of the best fourth quarters we have delivered since going public in 2012. Sales increased 30% to $505 million driven by solid results from our new stores and a transaction driven comp of 5.9%. Earnings per share grew 34% to $1.21. The fourth quarter capped a very strong year for Five Below, which annual sales grew 28% to almost $1.3 billion driven by new store unit growth of 20% and a comp sales increase of 6.5%. 2017 was our 12th consecutive year of positive comps. For the year, operating margins finished at a record 12.3%, while net income and earnings per share grew over 40%. We continue to generate strong free cash flow and ended the year with cash and investments of $272 million. With our strong balance sheet, we are in a position to begin allocating some of our free cash flow towards share repurchases and are announcing today are first ever share repurchase authorization for $100 million. Key to these great results was the strong and consistent performance we continued to see from our new stores, which remain our most significant growth opportunity as well as the main driver of our 2020 through 2020 vision. As we announced in January, we believe our store opportunity now exceeds 2,500 stores in the United States, 25% higher than our previous target of 2000 plus stores. As we finished 2017 with 625 stores, the runway for growth remains…

Thanks, Joel and good afternoon, everyone. I will begin my remarks with a review of our fourth quarter and fiscal 2017 results and then discuss our outlook for the first quarter and full year fiscal 2018. As a reminder, the fourth quarter of 2017 and the fiscal year included an extra 53rd week versus the 52-week fiscal year 2016 and the upcoming fiscal year 2018. This extra week added approximately $15.7 million to sales, $3 million to operating income and $0.03 to diluted earnings per share. Our sales in the fourth quarter of 2017 were $504.8 million, up 30.1% from the fourth quarter of 2016 or up 26% excluding the impact of the 53rd week. We ended the quarter with 625 stores, a year-over-year increase of 103 net new stores or 19.7%. Comparable sales increased 5.9% for the fourth quarter of 2017 versus a 1% comp increase in the fourth quarter of 2016. The comp increase for the fourth quarter of 2017 was driven by a 4% increase in comp transactions. Gross profit increased 30.2% to $207.5 million from the $159.4 million reported in the fourth quarter of 2016. Gross margin finished flat to last year at 41.1% with leverage in occupancy expense from the higher comp offset by higher incentive compensation costs. SG&A as a percentage of sales was primarily the leverage of fixed costs on the higher comp offset in part by higher incentive compensation. Our operating income increased 31.2% to $103.5 million. Operating margin increased approximately 20 basis points to 20.5% of sales. Our effective tax rate for the fourth quarter of 2017 was 35.2% compared to 36.9% in the fourth quarter of 2016. The decrease in the effective tax rate was driven by the benefit from share based compensation accounting and the net benefit from tax…

Yes. Thanks Ken. 2017 was a great year for Five Below. Our teams accomplished a lot throughout the organization. We provided broad-based newness and amazing values across our 8 worlds and quickly executed and successfully managed hot trends. We enhanced the already unique store experience with our new refresh format. We successfully entered California with 15 new stores. We achieved a record estimated $2 million in average unit volumes for the class for 2017. We increased our brand awareness and digital mobile social presence. We optimized our store leadership structure and rounded out our executive leadership team. We crystallized our purpose and we moved into our new home office at the end of January. Associates are loving to look and feel of the new space and it is generating new energy and collaboration throughout the organization. We did all of this while delivering out-performance with strong top and bottom line results throughout the quarter and the year and we look forward to building on this progress in 2018. Before I close as you may have seen in our press release, our Co-Founder, Tom Vellios will be transitioning from his current role as Executive Chairman to Chairman of the Board of Five Below in connection with the annual shareholders meeting in June. I must say Tom’s imprint on our company and culture is indelible and on behalf of the entire Five Below family of associates and customers I want to personally thank him for all his contributions as well as express my gratitude to him for his partnership and commitment to me. He is truly a visionary leader and I look forward to continuing to work closely with him in the coming years. I would also like to thank all of our associates who worked tirelessly throughout the fourth quarter and the year to make Five Below so special for our customers. We believe that the unique combination of our value offering and our fun differentiated store experience has driven our success as a leading high growth retailer and we will continue to do so in the future. We are on a mission to make life better for our customers so they can simply let go and have fun. With that I would like to turn the call back to the operator for questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first questioner today will be Edward Kelly with Wells Fargo. Please go ahead.

Hey guys. This is actually Anthony [indiscernible] on for Ed. Thanks for taking my question. So real quick is on tax reform, you guys are obviously a big beneficiary, can you just still walk us through the thought process in terms of how you chose to allocate savings, obviously you have a lot of peers investing in labor, how you are thinking about the balance between the growth in SG&A in line?

Yes, it’s Joel. Clearly we are really confident in our current model and believe that the focus should be on our associates first and that’s where the main focus was as well as some investments in our infrastructure and systems. As we said in our prepared remarks 75% of the investment though – 75% of the tax reform benefits will flow through to our shareholders. But the large majority of the investments were focused on our associates. And it’s important to note that 100% of the added investments will hit the SG&A lines not the gross margin lines. Ken, do you have anything to add?

Yes, Anthony, I was just going to add there from a geography standpoint, Joel mentioned that 100% goes to SG&A. As we mentioned in our prepared remarks that total amount of the tax investment drives about a 50 basis point deleverage in our operating margin in 2018.

That’s helpful. Thanks. And just as a quick follow-up on the gross margin line, the past 10 quarters have still been pretty impressive in terms of incremental improvement and given the comparisons you guys are up against this year, what are your expectations and can you just walk us through the different levers you are thinking about in terms of continued improvement?

Yes, I think when you – Anthony, you are asking about 2018?

Yes.

Yes. As we look at our guidance and as we said in the past we don’t expect to see merchandise margin leverage as we move forward as we continue to scale. We are plowing that back into the products which help to drive newness with our customers. So we will continue to expect to see that as we go forward. I think I mentioned also in the prepared remarks that we on average start to see leveraging of our fixed cost around that 3% comp range and given our guidance of 1% to 2% for the year that would obviously imply no leverage there from fixed costs. So, we would expect on an overall basis gross margin will remain relatively flat as we move forward in 2018.

And operator before we go to next caller, it’s Joel, just to remind everyone we had pretty lengthy and gave you some pretty detailed information about our plans for ‘18 and if we could just hold it to one question that would be great, so we can get through everybody.

And our next questioner today will be Chuck Grom with Gordon Haskett. Please go ahead.

Hey. I have never been called that before, but first time for everything. From the brand awareness front, Joel, it sounded I am sure you guys talked about how you have seen a nice improvement in the top 50 markets, I think you said brand awareness going from 45% to 60%, which I think it’s the first time we have disclosed that. And I am just wondering stepping back when you look at the comp performance in 2017 obviously much stronger year-over-year and I think the spinner has certainly helped out, but I am just wondering if you could reflect a little bit back on what you think about what you have done from a brand awareness perspective to improve your comps and how sustainable that is looking ahead? Thank you.

Yes, thanks Chuck. We did disclosed that at ICR and I think it was important we got that out for you and in fact I’d remind a lot of the investors and it’s not out on our website, there is lot of information that we shared it at ICR. In terms of brand awareness, there is a lot of things we have been doing. One has been the densification of our real estate strategy. Secondly, on the marketing front, we were largely 4 years ago solely paper circulars that hit 15x a year and since then we have really invested in TV, we have invested in mobile social our entire digital marketing efforts are really making a difference. And I think you combine all those together with the fact that our merchandise continues to get better and better, we just got a great story to tell and it’s allowed us to really accelerate and I think all of those contribute to the increase in our brand awareness.

Great. Thanks and good luck.

Yes. Thanks, Chuck.

And our next questioner today will be Sean Kras with Barclays. Please go ahead.

Hey, guys. Thanks for taking my question and all the details in the guidance. Last couple of quarters the performance had been pretty robust across categories. I am just wondering what you saw in the fourth quarter and to the extent that you are willing to comment on what you are seeing so far in the first quarter?

Well, clearly, the fourth quarter was very strong across nearly all 8 worlds. I mean, I think I called out 5 of 8 and probably could have named all 8, but we are trying to really focus on the outperformance of our broad-based successful 2017. As we go into ‘18 here, we continue as I said to see momentum across many, many of the worlds. And I think it’s a combination as I said in the last question to Chuck, the merchandise assortment continues to get better. We are benefiting from the crazed trends of last year as it exposed new customers to Five Below and those customers have came into buy spinners are example like what they say and many of our surveys have said they continue to come back. So I guess net-net the broad based success we saw in Q4 has continued here into Q1.

That’s helpful and thanks for the color.

Good day.

And our next questioner today will be John Heinbockel with Guggenheim. Please go ahead.

So, two things, Joel when you think about the investments in labor and store, so is that maybe disaggregate that between increase in hours and increase in wages and benefits. And then secondly maybe for you to Ken, any – what’s your thought process now on ownership versus leasing DCs and what you might do going forward?

Yes. I will take the first one and hand it over to Ken. Thanks John. In terms of the investment in the stores, the majority of that investment is in the form of increased wages. However, if you did tick-up in my comments there is a big effort on improving productivity and the training programs we will give in the stores. With the addition of George joining us last year and now that he has been through a holiday and really having gotten his arms around the organization, he is making a material impact on the amount of training we are doing in our stores, the consistency we are delivering, so the dollars are in wages, the effort is in training and development of our people from the tax reform aspect there. Ken DCs?

Yes. And then John on the on the DC, I mean you have known from the past and in earlier stages of our company where we grew very quickly didn’t really make sense for us to purchase property now that we are bigger, more stable, have more experience, you are seeing we are feeling a little bit more comfortable in terms of allocating those resources especially around the distribution center and especially one that is strategically placed in areas where we are growing and we will have a presence for many years to come. It helped us from a sense of control and also flexibility and then also financially it’s a good decision for us to make. So you see us doing that with the Southeast distribution center. We are going to review that potential for us and then we will continue to analyze that as we move forward with the future DCs.

Thanks. Thank you.

Thanks John.

And the next question will be Paul Trussell with Deutsche Bank. Please go ahead.

Good afternoon.

Hi Paul.

I wanted to circle back on comps, obviously a strong quarter and year, but I wanted to ask about the comp cadence and the guidance going forward, I think a number of investors are noting here that post the holiday, it looks like sales did slow a little bit in January, you have the combination of bad Northeast weather, an earlier Easter and very tough compares against spinners upcoming, so if you could just walk us through the drivers of confidence on your first quarter and your full year comp guide, perhaps any trends worth highlighting that you are seeing in certain categories is driving traffic today and can continue to do so in the months ahead?

Yes, Paul, it’s funny you are bringing up weather, because looking out my window and all you see are snowflakes and white trees and I think we are on the first day of spring here. So it’s clearly wait on the first quarter and there has been several Northeast storms rolled through the quarter. In terms of answering your question it’s clearly the guidance we gave you that we updated for the ICR conference, contemplated January sales. We are in the middle of a storm many people were late and didn’t make ICR with the storm that was going on. So, all that was contemplated and when we updated and said we finished the quarter near the high end of our range and it exactly played out that way. It was mostly weather driven in terms of that guidance. And we also knew we were up, but against tougher compares from ‘16, ‘17 it’s continued in the first quarter. There has been a number of named storms. I think we are in a fourth one and four weeks here, but what obviously we tell from our guidance, 3 to 4 customers are finding Five Below, they like Five Below. In between breaks in the weather, we are seeing great traffic in our stores. You can look at the ad we just had this Sunday, you can see a lot of newness in the products and we continue to see a strong success out of our core business, it’s very strong and we have no reason to expect that not to continue into Easter and then the start of April. Obviously, we are not looking forward to or wouldn’t like to see a storm next week leading into the Easter weekend, but business is strong in between storms and we are really pleased with the quarter we are having.

That’s very helpful. Really quick follow-up just to clarify a comment you made, Ken, I think you said the second quarter will have the lowest EPS growth, is that still to be positive or negative given you said that third quarter is to be I think flattish?

Yes, it was more around just the Q2 would have the lowest growth, I didn’t mention the word negative there, but the lowest growth out of Q2 and to not assume that we deliver EPS growth in Q3.

Got it. Just wanted to clarify. Thank you and good luck.

Yes, thank you. Thanks, Paul.

Thanks, Paul.

And our next questioner will be Michael Lasser with UBS. Please go ahead.

Good evening and thanks a lot for taking my question. The first quarter guidance implies a substantial increase in your operating margin rate, is that because of the earlier Easter and how much are you expecting the earlier Easter to add? And then Ken, just to clarify you mentioned a flat or near flat comp, so should we expect comp in the second and third quarter as you anniversary the spinner trend from a year ago to be negative potentially?

Yes, thanks, Michael. I will take the first one around the operating margin for Q1. Really, the drivers there, you have two things going on, you have the 3% to 4% comps, so that’s providing operating margin leverage on our fixed cost and then we are up against some costs from last year Q1 around some incentive-based compensation that was recorded and also California entry costs. So, those are really the key drivers in terms of the overall significant leverage that you are seeing in Q1. With regards to your second question, I guess, was around the comps, you mentioned a flat comp?

Yes, I think you said flat or near flat, so does that imply, it could be negative in 2Q and 3Q?

Yes, the guidance that we provided for the year is 1% to 2%, obviously includes we are giving out for Q1 and it provides a range of outcomes assumed as you move forward in Q2 through Q4. And it does assume the potential and we understand we are up against some significant comps in both Q2 and Q3 and within that range of outcomes, it would assume a potential negative comp than be able to hit the annual guidance of a 1% to 2% comp.

Yes, I think Michael, Q2 obviously give that guidance on the first quarter call. Right now, we are focused on Easter, which really drives Q1 and the team has put together a great lineup for Q2 that we are excited about, but we are realistic on the spinner trend. And I think what’s been great about the spinner trend and every trend at Five Below was it’s just introduced to a wealth of new customers it’s why you continue to see such strong comps from us. We will go through the height of it here in May and June, but the number of new customers really gives us confidence. It’s going to be a great year and we just finished our 12th consecutive year of positive comps. You can tell by our guidance, we expect this to be our 13th and you got some ups and downs in the monthly and quarterly cadence, but it’s going to be a great year. I am really looking forward to ‘18 here.

Thank you and good luck with the year.

Thanks.

Thanks, Michael.

And the next questioner will be Alan Rifkin with BTIG. Please go ahead.

Thank you. Congratulations on the great year and for setting up the foundation. Joel, I have one question relative to the corporate average, how much are both the refreshes and California contributing to those averages and what will each of those metrics look like for 2018?

You are talking about the overall company average volume on a…

How much above the corporate average or how much above the refresh is contributing to the corporate average and relative to your new stores and you talked about the $2 million average revenue for the class of ‘17, how much of the contribution is California making towards that? And then the second part of the question was how many new stores in California in ‘18 and how many refreshes will there be?

Yes. In terms of the refresh what I tell you is even if you pulled California out of the mix the class of 2017 would still be above $2 million. So, you can tell there is very, very little differentiation there between the two. So, just want to get that out there. To answer your question about how much is the refresh contributing, Alan it’s hard to gauge that, because they are all non-comp stores. So, you are making your best guess. Hopefully, what you can tell from our compared remarks so is we are pleased with the 5 stores we remodeled last year. We are going to remodel more in ‘18 and really perfected. And by perfected I mean take the costs out, understand the cadence, the timing what you do in Phase 1/2 etcetera. And then our goal really is to have a formal remodel program in 2019 having a great store experience is something near and dear to my heart. We got to keep our stores fresh, thriving, retail chains do that. And I think what I am saying about all this is we believe in the refresh stores, it’s working. When we do remodel the store we see a nice lift and now we got to kind of quantify that here in ‘18 so that we can really get that formal program going in ‘19 which should be really exciting for the company, but we will give you more details on that as we get through the next couple of quarters. And then I think in terms of the number of stores for California, we are probably in the 15ish range or so for ‘18 here, so about the same as last year.

Okay, thank you very much. Best of luck.

You bet. Hey, thanks Alan, appreciate it.

And the next questioner will be Dan Binder with Jefferies. Please go ahead.

Thanks. My question is around product trend and Toys R Us and obviously a very sort of unique opportunity and recognizing what you sell as $5 and below I would imagine there is still some opportunities, just curious what you are doing to go after that and then just in terms of the emerging trends just some kind of cool stuff out nothing as big as spinners, but curious to hear what you think has potentially got some legs?

Yes. Obviously, there is a lot of disruption happening in the toys space. I will tell you on a personal level having worked there 12 years, nearly a quarter of my life, it’s sad to see that happen. I think as it relates Five Below, we are winning because of value, we are winning because of the store experience and we are winning because of the product we continue to bring to life. And I am not going to speculate on any trends we see emerging for competitive reasons, but I will tell you I like what Michael and the merchant team are bringing forth. We continue to stay very relevant and I think what we are getting so good at is speed to market. What you saw is due to last year with pick one of the S trends, but we are one of the first to have the spinners out there. We mailed it with squishy. Slime has been a longstanding success for us. So that’s what you should continue to see us do. We identify them, we don’t create the trends, but then the team really goes after it with speed and accuracy and that’s what you will see more us, Dan. And I am really excited about what’s coming through Q2 and I think if you looked at our recent ad, you saw a lot of newness in there as well, but nothing you are right, the spinner trend don’t expect that ever year, those are kind of – those crazes don’t happen that often, but they also come and go pretty quick.

Just as a follow-up to that, was this imply about your global sourcing plans for this year as a percentage of the total?

Yes, you shouldn’t see that move too much on us. It’s relatively flat year-over-year. As we look at it and might move up a 1% or 2%, but it’s going to be pretty flat to last year, it’s about a third of our business total.

Great, thank you.

Thanks, Dan. Appreciate it.

And our next questioner will be Jeremy Hamblin with Dougherty & Company. Please go ahead.

Hey, guys. See those same snowflakes piling up outside my office window. I wanted to ask about your comment on the additional distribution center added in 2021 in the Midwest, you noted Joel in your comments about kind of the pace of store openings and you have had a longstanding plan for kind of 2020 to 2020, should we be thinking that comment is really extending the 20% or relatively close to 20% unit growth out beyond 2020 or is the comment more related to potentially even a little bit higher than 20% unit growth over the next few years?

Yes, I wasn’t trying to get you to over-think or over-guess me on that one, but what I was trying to get you to do and you picked up on it is how important new stores continue to be for us and we are committed to new stores. We believe our runway is even greater than it was before as we announced at ICR 2,500 instead of 2,000 and the best foreshadowing of that is what’s our distribution strategy? We wouldn’t be announcing 3 DCs in 3 years plus the 3PL if we didn’t feel strongly about the runway we are at with new stores. It’s too early for us to speculate beyond the 2020, but rest assured as we get closer to 2020 we will certainly be in a position to kind of give you guys some long range plans. We have always said this is a long range opportunity and we will guide long range. But right now, we have got to get that infrastructure in place, not only will it get the assets there, but it will help us on speed to market, it will help us on our freight costs and it should as you picked up on signal that there is no slowing down on the number of stores we are going to open.

Great. Congrats to you and the team on a great year.

Thanks, Jeremy.

And our next questioner today will be Scott Ciccarelli with RBC Capital Markets. Please go ahead.

Hey, guys. It’s Beth Reed [ph] on for Scott. Given the challenging gross margin comparisons this year as sales trends kind of normalized, how are you guys thinking about potential freight and transportation headwinds with some other retailers have called out and then any potential leverage to offset that?

Yes. I know you are focusing on comp, but don’t forget that we are opening 125 new stores. And so as we go to negotiate freight and transportation or any other contract for that matter, they are not looking at comp store sales, they are looking at total increase and I think as we continue to be a high growth value retailer that really gives us some leverage to make sure those costs stay in line. So, while there is some upward pressure out there, we largely mitigate a lot of that with our excessive growth opportunity. And Ken?

Yes. And then Beth just to add to that, I mean, obviously we are in a period here of inflationary freight costs, whether it’s deliveries to stores or whether it’s import through container costs. We have factored our estimates into the guidance for this year that we have provided and to Joel’s point, our growth and scale really benefit us as they have in the past and they will continue to as we move forward to offset increases like this.

Got it. Thank you.

Thanks, Beth.

Thanks, Beth.

And our next questioner will be Vincent Tennessee with Morgan Stanley. Please go ahead.

Hey, great. Thanks very much guys. Good afternoon. Thanks for taking my question here. Most of the questions have been answered, but I guess two fast things. First, as we on the phone I am sure have been getting asked just any initial thoughts, any potential tariff changes what would be your response to that? And then just really more of the fundamental question here as you are continuing to refine your brand awareness various mediums advertising etcetera, what seems to kind of be in your opinion to kind of the greater rate of change, what mediums will you be investing in more or less versus the pass and should we think of kind of as a percent of sales that, that kind of stay relatively flat on a year-to-year basis? Thanks a lot.

Yes, I will take the first one, Ken, if you have some thoughts. Look, the tariff situation is a very fluid situation right now, lot to come later this week on that. I think like border adjustment tax, the retail industry is very united and will share their thoughts as a united front. And I think like VAT, once the facts were provided cooler heads prevailed and we tend to believe that as well as this. It’s not positive for the consumer and we need to get that message out to the consumer regarding any tariff changes that may happen as it relates to what does it mean for Five Below, it’s too early to speculate on that.

And our next questioner today will be Alvin Concepcion from Citi. Please go ahead.

Hi, guys. Thanks for taking my question. Just wondering if you could talk about real estate opportunities, you talked about your increasing scale, so I am wondering if you have seen improvements in your ability to negotiate leases or find more attractive sites that could improve your new store model returns?

Yes. Thanks, Alvin. I think the biggest thing we have seen as the brand awareness has gotten stronger is the landlords are coming to us rather than we used to have to chase them down. And so landlords want to be in a vibrant center – or want a vibrant center as bad as we want to be in a vibrant center. They see us as somebody that brings traffic to their centers. They see us as somebody that brings young youthful traffic to our centers. And so really the opportunities are growing for us as redevelopment of centers happens or there is new centers being built. So, we are usually in the mix right upfront. We got a great real estate team. They are spread out across the country and are just doing a great job bringing more and more opportunities to us and have done a great job on keeping the prices in check and it’s been relatively flat over the last few years and we don’t see any unusual upticks in terms of real estate rates.

Got it. Thank you very much.

Thanks, Alvin.

Thanks Alvin.

And the next questioner will be Chris Prykull with Goldman Sachs. Please go ahead.

Hey, guys. Thanks for taking the questions. I just had two quick follow-ups to earlier questions. I think Ken you mentioned gross margin flat year-over-year. Correct me if I misheard that and just walk me through the puts and takes there again if you could I would appreciate, I had mentioned freight headwinds you are lapping some of the merch margin lift from spinners last year, do you hold on to that or give that back and then occupancy I would assume deleverages on the 1% to 2% comp, just walk me through how we are getting to flat?

Sure. That again, Chris we don’t normally guide to gross margin and operating margin levels, but implied in the guidance – the full year guidance that we provided was relatively flat gross margin levels. And obviously from the guidance we provided for Q1, there is significant leverage both on a gross margin and SG&A driving that overall operating margin leverage. And then as we work our way through the rest of the year, really two things there, it’s obviously the comps, the implied comps as we go from Q2 through Q4 getting us to the 1% to 2% comp guide for the full year and then the tax-free investment which are really ramping up in Q2 and Q3 as we go through the years. So, that’s really – those are the two key drivers as we work our way through the rest of the year to get to our overall guidance. And then just keeping in mind that there is tax reinvestments I mentioned on a full year basis, we estimate it will provide about a 50 basis point deleverage from an operating margin standpoint and a 100% of those reinvestments are at the SG&A level.

Great, that’s helpful. And then just one clarification your EPS guidance, does not take into account any accretion from share buyback?

It is not. Obviously, we announced the authorization today, but that we don’t know the timing or the amount of those going forward so that is not included in our guidance.

Great. Thanks for clarification and good luck.

Thanks Chris.

Thanks Chris.

And this will conclude our question-and-answer session. I would like to turn the conference back over to Joel Anderson for his closing remarks.

Yes, thank you operator and thanks everybody for joining us today. We all look for warmer weather and less white flakes out our respective windows. We look forward to speaking with you again on our first quarter call. Thanks everybody and have a great evening. Appreciate the support. Good night.

And the conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.