Ollie's Bargain Outlet (OLLI) investor relations material

Executive summary

• Net sales rose 17.5% year-over-year to $679.6 million, driven by new store openings and a 5% increase in comparable store sales.

• Adjusted net income reached $61 million, with adjusted EPS up 26.9% to $0.99 and adjusted EBITDA up 26% to $94 million.

• Opened 29 new stores in the quarter, 22 from bankruptcy-acquired leases, bringing the total to 613 stores and surpassing previous records.

• Ollie's Army loyalty program membership grew 10.6% to 16.1 million, now accounting for over 80% of sales.

• Revamped Ollie's Days event drove record customer engagement, sales, and new member acquisition.

Financial highlights

• Gross margin improved by 200 basis points to 39.9%, aided by lower supply chain costs and higher merchandise margins.

• SG&A expenses as a percentage of net sales increased 60 basis points to 25.8%, mainly due to higher medical, casualty claims, and labor expenses.

• Operating margin increased 80 basis points to 11.3%.

• Total cash and investments rose 30% to $460 million, with no meaningful long-term debt.

• Pre-opening expenses rose to $9 million, including $2.3 million in dark rent from acquired locations.

Outlook and guidance

• Raised full-year guidance: 85 new store openings, net sales of $2.631–$2.644 billion, comparable store sales growth of 3–3.5%, gross margin of 40.3%, and operating income of $292–$298 million.

• Adjusted net income expected at $233–$237 million and adjusted EPS at $3.76–$3.84.

• Capital expenditures projected at $83–$88 million for the year, focused on new stores and infrastructure.

• Liquidity remains strong with $317.1 million in cash and short-term investments and $90.4 million available under the credit facility.

• Third quarter comp growth expected above long-term algorithm of 1–2%, with most new stores opening in Q3.