Ollie's Bargain Outlet Holdings, Inc. OLLI reported in-line earnings for the fourth quarter on Wednesday.The company reported fourth-quarter adjusted earnings per share of $1.19, in line with the analyst consensus estimate. Quarterly sales of $667.1 million (up 2.8% year over year) missed the analyst consensus estimate of $674.5 million.Comparable store sales increased 2.8% from the prior year's increase of 3.9%."With so many retailers closing stores or going bankrupt in the past year, there are a considera ...

Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) Q4 2024 Earnings Conference Call March 19, 2025 8:30 AM ET Company Participants Eric van der Valk - President & Chief Executive Officer Robert Helm - Executive Vice President & Chief Financial Officer Conference Call Participants Steven Zaccone - Citi Chuck Grom - Gordon Haskett Alexia Morgan - Piper Sandler Matthew Boss - JPMorgan Brad Thomas - KeyBanc Capital Markets Lauren Ng - Morgan Stanley Scot Ciccarelli - Truist Securities Kate McShane - Goldman Sa ...

Core Insights - Ollie's Bargain Outlet reported revenue of $667.08 million for the quarter ended January 2025, reflecting a year-over-year increase of 2.8% but a revenue surprise of -0.75% compared to the Zacks Consensus Estimate of $672.11 million [1] - The company's EPS for the quarter was $1.19, down from $1.23 in the same quarter last year, resulting in an EPS surprise of -0.83% against the consensus estimate of $1.20 [1] Financial Performance Metrics - Comparable store sales increased by 2.8%, slightly above the average estimate of 2.6% based on six analysts [4] - The total number of stores at the end of the period remained at 559, matching the average estimate from four analysts [4] - The company opened 13 new stores, consistent with the average estimate of 13 from four analysts [4] - The average net sales per store were $1.20 million, below the average estimate of $1.24 million from three analysts [4] Stock Performance - Over the past month, shares of Ollie's Bargain Outlet have returned -9.4%, compared to a -8.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - Ollie's Bargain Outlet reported quarterly earnings of $1.19 per share, missing the Zacks Consensus Estimate of $1.20 per share, and down from $1.23 per share a year ago, representing an earnings surprise of -0.83% [1] - The company posted revenues of $667.08 million for the quarter, missing the Zacks Consensus Estimate by 0.75%, compared to $648.95 million in the same quarter last year [2] - Over the last four quarters, Ollie's has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Ollie's Bargain Outlet shares have declined approximately 9.7% since the beginning of the year, while the S&P 500 has decreased by 4.5% [3] - The current Zacks Rank for the stock is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.76 on revenues of $572.98 million, and for the current fiscal year, it is $3.76 on revenues of $2.57 billion [7] - The outlook for the Consumer Products - Staples industry, where Ollie's operates, is currently in the bottom 40% of over 250 Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - The company reported a net sales increase of 3% to $667 million for the fourth quarter, driven by new stores and comparable sales growth, with an 8.5% increase when excluding the impact of the previous year's extra week of sales [11][12] - Adjusted net income was $73 million, with adjusted earnings per share at $1.19, and adjusted EBITDA at $109 million, resulting in an adjusted EBITDA margin of 16.4% for the quarter [15][16] - Gross margin increased by 20 basis points to 40.7%, primarily due to lower supply chain costs, although there was a slight decrease in merchandise margin driven by product mix [13][16] Business Line Data and Key Metrics Changes - Comparable store sales growth for the fourth quarter was 2.8%, with increases in both transactions and basket size [11][12] - The best-performing categories included housewares, food and candy, electronics, and room air [11] - Membership in "Ali's Army" increased over 8% to over 15.1 million members, with sales to members representing over 80% of total sales [12] Market Data and Key Metrics Changes - The company ended the quarter with 559 stores across 31 states, marking a 9% year-over-year increase, having opened 13 new stores in the quarter and 50 for the fiscal year [12] - The company is positioned to benefit from the closure of competitors, particularly Big Lots, which presents a significant market share opportunity [37][72] Company Strategy and Development Direction - The company announced an agreement to acquire 40 additional store leases from former Big Lots locations, which are expected to generate outsized profitability due to below-market rents and long-term leases [7][19] - The company aims for approximately 75 new store openings in the upcoming fiscal year, with a focus on accelerating growth and capitalizing on market opportunities created by competitors' closures [19][72] - The long-term growth algorithm targets 10% unit growth and 1% to 2% comparable store sales growth, with a gross margin goal of approximately 40% [18][72] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers remain under pressure, which bodes well for the company's value-oriented offerings [5][26] - The company is optimistic about its ability to capture market share from competitors, particularly in light of the recent closures of Big Lots stores [37][72] - Management expressed confidence in the company's operational capacity to support accelerated growth, citing investments in infrastructure and distribution capabilities [88] Other Important Information - The company has initiated a new $300 million share buyback program, reflecting its commitment to returning capital to shareholders while pursuing growth opportunities [17][18] - The company expects to incur approximately $5 million in dark rent related to the acquired Big Lots locations, which will impact earnings in the short term but is seen as a strategic investment for long-term profitability [19][48] Q&A Session Summary Question: Assessment of the consumer state and outlook for 2025 - Management indicated that consumers are under pressure but that the company thrives in such environments, with strong performance in consumables driving traffic [25][26] Question: Gross margin expectations for 2025 - Management expects gross margin to remain around 40%, with stable supply chain costs and a focus on reinvesting in customer loyalty [28][29] Question: Impact of Big Lots closures on sales - Management noted that the impact was less than anticipated, with some stores performing better than expected due to fresh inventory [34][36] Question: Progress on private label credit card rollout - The credit card has been rolled out to most stores, with initial indications showing higher basket sizes for credit card customers [41][44] Question: Addressable market from Big Lots closures - Management estimates a $2.7 billion addressable market opportunity from Big Lots closures, with potential to capture a significant share [97] Question: Category performance and pre-opening expenses - Management highlighted strong performance in consumables, while discretionary categories faced challenges due to weather; pre-opening expenses are expected to follow the store opening cadence [114][118]

Financial Data and Key Metrics Changes - The company reported a net sales increase of 3% to $667 million for the fourth quarter, driven by new stores and comparable sales growth, with an 8.5% increase when excluding the impact of last year's extra week of sales [13] - Adjusted net income was $73 million, with adjusted earnings per share at $1.19, and adjusted EBITDA was $109 million with an EBITDA margin of 16.4% for the quarter [16] - Gross margin increased by 20 basis points to 40.7%, primarily due to lower supply chain costs, although slightly offset by a lower merchandise margin [15] Business Line Data and Key Metrics Changes - Comparable store sales grew by 2.8%, driven by equal increases in both transactions and basket size, with strong performance in housewares, food and candy, electronics, and room air categories [13][14] - Membership in "Ali's Army" increased over 8% to over 15.1 million members, with sales to members representing over 80% of total sales [14] Market Data and Key Metrics Changes - The company ended the quarter with 559 stores across 31 states, marking a 9% year-over-year increase, having opened 13 new stores in the quarter and 50 for the fiscal year [14] - The company is positioned to benefit from the closure of competitors, particularly Big Lots, with an addressable market share opportunity estimated at $2.7 billion [38] Company Strategy and Development Direction - The company announced an agreement to acquire 40 additional store leases from former Big Lots locations, which are expected to generate outsized profitability due to below-market rents and long-term leases [9] - The company aims to open approximately 75 new stores in the upcoming fiscal year, with a focus on accelerating growth while maintaining a strong balance sheet [20][19] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers remain under pressure, which bodes well for the company's value-oriented offerings, and they expect to thrive in this environment [6][27] - The long-term growth algorithm is projected at 10% unit growth, with comparable store sales growth of 1% to 2%, and gross margin expected to remain around 40% [19] Other Important Information - The company has initiated a new $300 million share buyback program, demonstrating a commitment to returning capital to investors while pursuing growth opportunities [18] - The company is experiencing a stable business model in the closeout market, with consistent availability of merchandise due to various market drivers [10] Q&A Session Summary Question: Assessment of the consumer state and outlook for 2025 - Management indicated that consumers are under pressure but the company thrives in such environments, with strong performance in consumables driving traffic [26][27] Question: Gross margin expectations for 2025 - Management expects gross margin to remain around 40%, with stable supply chain costs and a good buying environment anticipated [29][30] Question: Impact of Big Lots closures on sales - Management noted that the impact was less than expected, with some positive momentum observed post-liquidation [35][37] Question: Progress on private label credit card - The credit card rollout is expected to be completed by the end of Q1, with initial indications showing higher basket sizes for credit card customers [45] Question: Dead rent dynamics and flow-through expectations - Management explained that the acquired stores will incur dead rent, impacting flow-through, but long-term profitability is expected to be strong [50][51] Question: Category performance and sales productivity - Management noted strong performance in consumables, while discretionary categories faced challenges due to weather [114]

Sales Performance - Q4 net sales increased 2.8% to $667.1 million, with a comparable store sales increase of 2.8%[4] - Fiscal 2024 total net sales increased 8.0% to $2.272 billion, with a comparable store sales increase of 2.8%[10] - Net sales for the quarter ended February 1, 2025, were $667.1 million, an increase of 2.0% from $648.9 million for the same quarter in 2024[38] - Comparable store sales change for the quarter was 2.8%, compared to 3.9% in the same quarter of 2024[61] - Average net sales per store for the quarter ended February 1, 2025, was $1,200,000, down from $1,273,000 in the same quarter of 2024[61] Store Expansion - The company opened 13 new stores in Q4, ending the quarter with 559 stores, a 9.2% year-over-year increase[4] - The company plans to open 75 new stores in fiscal 2025, up from 50 in fiscal 2024[28] - The number of stores open at the end of the quarter was 559, an increase from 512 at the end of the same quarter in 2024[61] - The company opened 13 new stores in the quarter, compared to 7 new stores opened in the same quarter of 2024[61] Financial Performance - Net income for Q4 was $68.6 million, or $1.11 per diluted share, a decrease of 10.4% from the prior year[12] - Net income for the fiscal year 2025 was $199.8 million, representing an increase of 10.0% from $181.4 million in 2024[38] - The company reported a diluted earnings per share of $3.23 for the fiscal year 2025, compared to $2.92 in 2024, reflecting an increase of 10.6%[38] - Net income for the quarter ended February 1, 2025, was $68,554,000, down from $76,475,000 in the same quarter of 2024, a decrease of 10.5%[54] - Adjusted net income for the fiscal year ended February 1, 2025, was $202,418,000, compared to $180,365,000 in 2024, an increase of 12.2%[54] EBITDA and Operating Income - Adjusted EBITDA for Q4 was $109.4 million, with an adjusted EBITDA margin of 16.4%[13] - Operating income for the quarter was $87.7 million, a decrease of 10.0% compared to $97.7 million in the same quarter last year[38] - Adjusted operating income for the fiscal year ended February 1, 2025, was $254,991,000, up from $227,799,000 in 2024, representing an increase of 11.9%[51] - EBITDA for the quarter ended February 1, 2025, was $100,317,000, compared to $107,357,000 in the same quarter of 2024, a decrease of 6.9%[60] - Adjusted EBITDA for the fiscal year ended February 1, 2025, was $313,076,000, up from $275,156,000 in 2024, an increase of 13.8%[60] Assets and Cash Flow - Total assets as of February 1, 2025, were $2.56 billion, an increase from $2.29 billion as of February 3, 2024[42] - Cash and cash equivalents decreased to $205.1 million from $266.3 million year-over-year[42] - The company ended fiscal 2024 with cash and cash equivalents of $428.7 million, compared to $353.2 million at the end of fiscal 2023[21] - Net cash provided by operating activities for the fiscal year was $227.5 million, down from $254.5 million in 2024[45] Capital Expenditures and Share Repurchase - Capital expenditures for fiscal 2024 were $120.6 million, primarily for new store development and distribution center completion[23] - The company announced a new share repurchase authorization for an additional $300 million of its outstanding common stock[25] Future Outlook - Fiscal 2025 net sales are estimated to be between $2.564 billion and $2.586 billion[28] - The company plans to continue expanding its market presence and investing in new store openings to drive future growth[38]

Core Viewpoint - Ollie's Bargain Outlet Holdings, Inc. has announced a new share repurchase authorization of $300 million, effective through March 31, 2029, reflecting the company's commitment to returning capital to shareholders while pursuing growth opportunities [1][2]. Financial Performance - The company has repurchased nearly $414 million, or 5.5 million shares, since initiating its first buyback in 2019 [1]. - As of the end of fiscal 2024, Ollie's reported $429 million in cash and short-term investments, with no borrowings under its revolving credit facility, indicating strong cash generation capabilities [2]. Business Strategy - The company aims to balance accelerated growth with capital returns to investors through share repurchases, while also addressing working capital needs [2]. - Ollie's operates 575 stores across 31 states, positioning itself as America's largest retailer of closeout merchandise and excess inventory [3].

Core Points - Ollie's Bargain Outlet Holdings, Inc. has announced a new share repurchase authorization of $300 million for its outstanding common stock, effective through March 31, 2029 [1] - The company has repurchased nearly $414 million, or 5.5 million shares, since initiating its first buyback in 2019 [1] - The company reported having $429 million in cash and short-term investments with no borrowings under its revolving credit facility at the end of fiscal 2024, indicating strong cash generation [2] Company Overview - Ollie's is the largest retailer of closeout merchandise and excess inventory in America, offering a variety of brand name products at discounted prices [3] - The company operates 575 stores across 31 states and continues to expand its footprint [3]

Core Insights - Ollie's Bargain Outlet Holdings, Inc. reported a 2.8% increase in comparable store sales for Q4 fiscal 2024, with net sales rising to $667.1 million from $648.9 million in Q4 fiscal 2023 [8][14] - The company plans to open 75 new stores in fiscal 2025, up from 50 in fiscal 2024, indicating a strong growth strategy [29][28] - The adjusted net income for Q4 fiscal 2024 was $73.4 million, or $1.19 per diluted share, reflecting a decrease from the previous year's adjusted net income of $76.3 million, or $1.23 per diluted share [14][21] Financial Performance - For the full fiscal year 2024, total net sales increased by 8.0% to $2.272 billion, with comparable store sales rising by 2.8% [9][16] - Gross margin improved to 40.3% in fiscal 2024 from 39.6% in fiscal 2023, primarily due to favorable supply chain costs [16] - Selling, general, and administrative expenses as a percentage of net sales increased to 27.0% in fiscal 2024 from 26.8% in fiscal 2023 [17] Operational Highlights - The company opened 13 new stores in Q4 fiscal 2024, ending the quarter with a total of 559 stores, a 9.2% increase year-over-year [8][9] - Pre-opening expenses rose to $4.8 million in Q4 fiscal 2024 from $1.6 million in Q4 fiscal 2023, driven by earlier store openings [12] - Operating income for Q4 fiscal 2024 was $87.7 million, which included a one-time expense of $5.5 million related to equity awards [13] Balance Sheet and Cash Flow - As of the end of fiscal 2024, the company had cash and cash equivalents of $428.7 million, up from $353.2 million at the end of fiscal 2023 [23] - Inventories increased by 9.2% to $552.5 million, reflecting the company's accelerating store growth [24] - Capital expenditures for fiscal 2024 were $120.6 million, primarily for new store development and distribution center completion [25] Future Outlook - For fiscal 2025, the company estimates net sales between $2.564 billion and $2.586 billion, with a comparable store sales increase of 1% to 2% [29][30] - The projected adjusted net income for fiscal 2025 is between $225 million and $232 million, translating to an adjusted net income per diluted share of $3.65 to $3.75 [30]