Ollie's Bargain Outlet (OLLI) - 2025 Q1 - Quarterly Results

Financial Performance Overview First Quarter Fiscal 2024 Highlights Ollie's reported strong Q1 2024 results with significant increases in net sales, comparable store sales, and earnings per share, leading to a raised fiscal year outlook - CEO John Swygert attributed the strong performance to high-level execution, offering amazing deals, and the company's unique business model which resonates with value-seeking consumers[3] Q1 Fiscal 2024 Key Financial Metrics | Metric | Q1 2024 | Change vs. Q1 2023 | | :--- | :--- | :--- | | Total Net Sales | $508.8 million | +10.8% | | Comparable Store Sales | +3.0% | - | | Operating Income | $56.5 million | +46.6% | | Net Income | $46.3 million | +49.6% | | Diluted EPS | $0.75 | +50.0% | | Adjusted Net Income | $45.2 million | +47.0% | | Adjusted Diluted EPS | $0.73 | +49.0% | | Adjusted EBITDA | $69.4 million | +40.3% | - The company opened 4 new stores during the quarter, bringing the total to 516 stores across 30 states, an 8.4% year-over-year increase in store count[3] Detailed First Quarter Financial Results Net sales grew 10.8% to $508.8 million, driven by new store openings and comparable store sales, leading to a 46.6% surge in operating income to $56.5 million and gross margin expansion to 41.1% - The 10.8% increase in net sales to $508.8 million was a result of both new store unit growth and a 3.0% rise in comparable store sales[4] - Gross profit increased 17.2% to $209.4 million. Gross margin rose to 41.1% from 38.9% in the prior year, primarily due to favorable supply chain costs and higher merchandise margin[5] - SG&A expenses as a percentage of net sales decreased to 28.0% from 28.4% due to leverage of fixed expenses on the increase in comparable store sales[6] - Net income saw a significant increase of 49.6% to $46.3 million, or $0.75 per diluted share, compared to $31.0 million, or $0.50 per diluted share, in Q1 2023[8] Balance Sheet and Cash Flow Highlights The company ended Q1 with a strong cash position of $341.5 million and no outstanding borrowings, while repurchasing $25.0 million in stock and investing $26.9 million in capital expenditures - As of the end of Q1 2024, the company held $341.5 million in cash, cash equivalents, and short-term investments, with no borrowings outstanding under its $100 million revolving credit facility[10] - The company invested $25.0 million to repurchase 336,934 shares of its common stock during the quarter, with $60.6 million remaining under the current repurchase program[11] - Capital expenditures totaled $26.9 million, mainly directed towards a new distribution center in Princeton, IL, store remodels, and new store development[13] Outlook and Corporate Developments Fiscal 2024 Outlook The company raised its fiscal 2024 full-year guidance, now projecting net sales between $2.257 billion and $2.277 billion and adjusted diluted EPS between $3.18 and $3.28, reflecting increased comparable store sales growth Fiscal 2024 Outlook Comparison | Metric | New Outlook | Previous Outlook | | :--- | :--- | :--- | | Net Sales | $2.257 to $2.277 billion | $2.248 to $2.273 billion | | Comparable Store Sales Increase | 1.5% to 2.3% | 1.0% to 2.0% | | Operating Income | $250 to $258 million | $243 to $251 million | | Adjusted Net Income per Diluted Share | $3.18 to $3.28 | $3.10 to $3.20 | | Capital Expenditures | $90 million | $85 million | Strategic Initiatives and Leadership Succession Ollie's is expanding its footprint by acquiring eleven former 99 Cents Only Stores locations in Texas for $14.6 million and announced a leadership succession plan for key executive roles - Subsequent to Q1, the company entered an agreement to acquire eleven former 99 Cents Only Stores locations in Texas for $14.6 million, consisting of three owned properties and eight leased properties[14] - A leadership succession plan was announced, which includes[17] - John Swygert transitioning to Executive Chairman in early 2025 - Eric van der Valk promoted to President, and to CEO in early 2025 - Chris Zender appointed as EVP and Chief Operating Officer, effective June 17, 2024 Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Income This section presents the unaudited condensed consolidated statements of income for the thirteen weeks ended May 4, 2024, compared to the thirteen weeks ended April 29, 2023, detailing revenues, costs, and profits Condensed Consolidated Statements of Income (in thousands) | | Thirteen weeks ended May 4, 2024 | Thirteen weeks ended April 29, 2023 | | :--- | :--- | :--- | | Net sales | $508,818 | $459,154 | | Gross profit | $209,358 | $178,571 | | Operating income | $56,497 | $38,539 | | Net income | $46,342 | $30,980 | | Diluted EPS | $0.75 | $0.50 | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of May 4, 2024, and April 29, 2023, outlining the company's assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | | May 4, 2024 | April 29, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $212,250 | $134,959 | | Inventories | $527,469 | $497,988 | | Total current assets | $878,782 | $783,268 | | Total assets | $2,311,468 | $2,091,038 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $310,792 | $278,213 | | Total liabilities | $779,044 | $707,082 | | Total stockholders' equity | $1,532,424 | $1,383,956 | Condensed Consolidated Statements of Cash Flows This section contains the unaudited condensed consolidated statements of cash flows for the thirteen-week periods ending May 4, 2024, and April 29, 2023, showing cash movements from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | | Thirteen weeks ended May 4, 2024 | Thirteen weeks ended April 29, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $40,184 | $35,872 | | Net cash used in investing activities | ($68,515) | ($99,311) | | Net cash used in financing activities | ($25,681) | ($12,198) | | Net decrease in cash and cash equivalents | ($54,012) | ($75,637) | | Cash and cash equivalents, end of the period | $212,250 | $134,959 | Supplemental Information and Non-GAAP Reconciliation Reconciliation of GAAP Net Income to Adjusted Net Income This section provides a reconciliation of GAAP net income and net income per diluted share to their non-GAAP adjusted counterparts for the first quarters of fiscal 2024 and 2023. The primary adjustment is for the excess tax benefit related to stock-based compensation Reconciliation of GAAP Net Income to Adjusted Net Income (in thousands) | | Thirteen weeks ended May 4, 2024 | Thirteen weeks ended April 29, 2023 | | :--- | :--- | :--- | | Net income (GAAP) | $46,342 | $30,980 | | Excess tax benefit related to stock-based compensation | ($1,132) | ($228) | | Adjusted net income (Non-GAAP) | $45,210 | $30,752 | Reconciliation of GAAP Net Income per Diluted Share to Adjusted Net Income per Diluted Share | | Thirteen weeks ended May 4, 2024 | Thirteen weeks ended April 29, 2023 | | :--- | :--- | :--- | | Net income per diluted share (GAAP) | $0.75 | $0.50 | | Excess tax benefit adjustment | ($0.02) | $0.00 | | Adjusted net income per diluted share (Non-GAAP) | $0.73 | $0.49 | Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA This section details the reconciliation of GAAP net income to the non-GAAP measures of EBITDA and Adjusted EBITDA. Adjustments include interest, taxes, depreciation, amortization, and non-cash stock-based compensation Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA (in thousands) | | Thirteen weeks ended May 4, 2024 | Thirteen weeks ended April 29, 2023 | | :--- | :--- | :--- | | Net income | $46,342 | $30,980 | | Interest (income), net | ($4,301) | ($2,675) | | Depreciation and amortization | $9,785 | $8,074 | | Income tax expense | $14,456 | $10,234 | | EBITDA | $66,282 | $46,613 | | Non-cash stock-based compensation | $3,149 | $2,863 | | Adjusted EBITDA | $69,431 | $49,476 | Key Operating Statistics This section presents key operating metrics for the first quarter of fiscal 2024, including store count changes, average net sales per store, and comparable store sales growth, providing insight into the company's operational scale and efficiency Key Statistics | Metric | Thirteen weeks ended May 4, 2024 | Thirteen weeks ended April 29, 2023 | | :--- | :--- | :--- | | Stores open at end of period | 516 | 476 | | New stores | 4 | 9 | | Comparable stores sales change | 3.0% | 4.5% |