Ollie's Bargain Outlet (OLLI) - 2025 Q2 - Quarterly Results

Second Quarter Fiscal 2024 Financial Highlights Ollie's reported strong Q2 2024 financial results, with net sales up 12.4% to $578.4 million, comparable store sales increasing 5.8%, and significant EPS growth, leading to raised full-year guidance Q2 2024 Key Financial Metrics | Metric | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | | Total Net Sales | $578.4 million | +12.4% | | Comparable Store Sales | +5.8% | - | | Operating Income | $60.8 million | +15.6% | | Operating Margin | 10.5% | +30 bps | | Net Income | $49.0 million | +16.1% | | Diluted EPS | $0.79 | +16.2% | | Adjusted Net Income | $48.2 million | +15.6% | | Adjusted Diluted EPS | $0.78 | +16.4% | | Adjusted EBITDA | $74.5 million | +16.4% | - The company opened nine new stores during the quarter, bringing the total to 525 stores across 31 states, representing an 8.9% year-over-year increase in store count[2] - CEO John Swygert attributed the strong performance to great deal flow, disciplined expense control, and strong execution, noting that this marks the ninth consecutive quarter of comparable store sales growth[4][5] Detailed Financial Results (Q2 2024) Q2 2024 net sales grew 12.4% to $578.4 million, driven by new stores and comparable sales, while operating margin improved to 10.5% despite a slight gross margin decline - Net sales growth was driven by both new store unit growth and a comparable store sales increase of 5.8%[6] - Gross margin declined slightly to 37.9% from 38.2% in the prior year, primarily due to a lower merchandise margin from changes in product mix[6] - SG&A expenses as a percentage of net sales decreased from 26.2% to 25.2%, demonstrating leverage of fixed expenses on higher comparable store sales and disciplined cost control[7] - Pre-opening expenses rose to $4.6 million from $2.9 million, mainly due to costs for the new distribution center in Princeton, IL, and a higher number of new stores compared to the prior year[7] Balance Sheet and Cash Flow Highlights The company maintained strong liquidity with $353.1 million in cash and no revolving credit facility borrowings, while investing $38.3 million in capital expenditures and repurchasing $6.4 million in stock - The company's cash, cash equivalents, and short-term investments totaled $353.1 million at the end of the quarter[10] - There were no borrowings outstanding under the $100 million revolving credit facility, with total borrowings consisting solely of $1.6 million in finance lease obligations[10] - During the quarter, 81,340 shares were repurchased for $6.4 million, with $54.2 million remaining under the current share repurchase program[10] - Capital expenditures amounted to $38.3 million, largely for the new Princeton, IL distribution center, acquisition of former 99 Cents Only Stores locations, and new store development[11] Fiscal 2024 Outlook The company raised its fiscal 2024 guidance, projecting net sales of $2.276 billion to $2.291 billion, comparable store sales growth of 2.7% to 3.2%, and adjusted EPS of $3.22 to $3.30 Updated Fiscal 2024 Guidance | Metric | New Outlook | Previous Outlook | | :--- | :--- | :--- | | Net Sales | $2.276B - $2.291B | $2.257B - $2.277B | | Comp. Store Sales Increase | 2.7% - 3.2% | 1.5% - 2.3% | | Operating Income | $252M - $259M | $250M - $258M | | Adjusted Net Income | $199M - $203M | $196M - $202M | | Adjusted Diluted EPS | $3.22 - $3.30 | $3.18 - $3.28 | | Capital Expenditures | $104 million | $90 million | - The company plans to open 50 new stores and close 2 stores in fiscal 2024, resulting in 48 net new stores[12] - The increased capital expenditure forecast includes $14.6 million for the acquisition and build-out of former 99 Cents Only Stores locations[12] Financial Statements The unaudited financial statements show year-over-year growth in Q2 and H1 2024 net income, increased assets on the balance sheet, and significant cash used in investing activities Condensed Consolidated Statements of Income Income Statement Summary (Thirteen Weeks Ended) | Metric (in thousands) | Aug 3, 2024 | Jul 29, 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $578,375 | $514,509 | +12.4% | | Gross Profit | $219,031 | $196,684 | +11.4% | | Operating Income | $60,759 | $52,537 | +15.6% | | Net Income | $48,982 | $42,181 | +16.1% | Income Statement Summary (Twenty-Six Weeks Ended) | Metric (in thousands) | Aug 3, 2024 | Jul 29, 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,087,193 | $973,663 | +11.7% | | Gross Profit | $428,389 | $375,255 | +14.2% | | Operating Income | $117,256 | $91,076 | +28.7% | | Net Income | $95,324 | $73,161 | +30.3% | Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Account | Aug 3, 2024 | Jul 29, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $170,600 | $181,416 | | Inventories | $531,286 | $498,331 | | Total Current Assets | $895,430 | $818,261 | | Property and equipment, net | $307,163 | $202,889 | | Total Assets | $2,374,293 | $2,154,156 | | Total Current Liabilities | $297,841 | $298,295 | | Total Liabilities | $783,622 | $739,176 | | Total Stockholders' Equity | $1,590,671 | $1,414,980 | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Twenty-Six Weeks Ended, in thousands) | Activity | Aug 3, 2024 | Jul 29, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $84,059 | $109,765 | | Net cash used in investing activities | ($159,398) | ($113,558) | | Net cash used in financing activities | ($20,323) | ($25,387) | | Net decrease in cash and cash equivalents | ($95,662) | ($29,180) | Reconciliation of GAAP to Non-GAAP Financial Measures The company provides non-GAAP measures like adjusted net income and adjusted EBITDA to clarify core operating performance, reconciling GAAP net income of $49.0 million to adjusted net income of $48.2 million in Q2 2024 - The company uses EBITDA, adjusted EBITDA, adjusted net income, and adjusted net income per diluted share to evaluate operating performance and business strategies[20] Reconciliation of Net Income to Adjusted Net Income (Q2, in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income (GAAP) | $48,982 | $42,181 | | Excess tax benefits related to stock-based compensation | ($756) | ($481) | | Adjusted net income (Non-GAAP) | $48,226 | $41,700 | Reconciliation of Net Income to Adjusted EBITDA (Q2, in thousands) | Description | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income (GAAP) | $48,982 | $42,181 | | Adjustments (Interest, Taxes, D&A) | $21,816 | $18,648 | | EBITDA | $70,798 | $60,829 | | Non-cash stock-based compensation expense | $3,652 | $3,141 | | Adjusted EBITDA (Non-GAAP) | $74,450 | $63,970 | Key Statistics The company's store count expanded to 525 by Q2 2024, with 9 new openings, and comparable store sales increased 5.8%, continuing a positive trend Store Count Activity (Q2 2024) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Stores at beginning of period | 516 | 476 | | New stores opened | 9 | 6 | | Stores at end of period | 525 | 482 | Sales Metrics (Q2) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Comparable store sales change | 5.8% | 7.9% | | Average net sales per store (in thousands) | $1,113 | $1,074 |