Ollie's Bargain Q3 Earnings Beat Estimates, Comps Decline 0.5% Y/Y

Core Viewpoint - Ollie's Bargain Outlet Holdings, Inc. reported mixed results for Q3 fiscal 2024, with net sales missing estimates but adjusted earnings exceeding expectations, both metrics showing year-over-year improvement [1][3]. Financial Performance - Adjusted earnings were 58 cents per share, surpassing the Zacks Consensus Estimate by one cent and increasing from 51 cents in the prior year [3]. - Net sales reached $517.4 million, a 7.8% year-over-year increase, although it fell short of the consensus estimate of $518.6 million [3]. - Comparable store sales decreased by 0.5%, contrasting with a 7% increase in the same quarter last year, and missing the expected growth of 0.3% [4]. Margin Analysis - Gross profit increased by 10.5% year over year to $214.5 million, with gross margin expanding by 100 basis points to 41.4%, driven by favorable supply-chain costs [5]. - Selling, general and administrative (SG&A) expenses rose by 9% to $154.5 million, with SG&A as a percentage of net sales increasing by 40 basis points to 29.9% [6]. - Operating income surged by 14% to $44.5 million, and the operating margin expanded by 50 basis points to 8.6% [7]. Store Expansion - The company opened 24 new stores and closed three, resulting in a total of 546 stores across 31 states, reflecting an 8.1% year-over-year increase in store count [8]. Financial Snapshot - At the end of the quarter, Ollie's Bargain had cash and cash equivalents of $128.7 million, with no outstanding borrowings under its $100 million revolving credit facility [9]. - Capital expenditures for the quarter were $31 million, with a projected total of $104 million for fiscal 2024 [9]. Future Guidance - Management revised fiscal 2024 net sales guidance to between $2,270 million and $2,280 million, up from $2,102.7 million in fiscal 2023 [11]. - Comparable store sales are now expected to grow between 2.7% and 3%, down from the previous guidance of 2.7% to 3.2% [11]. - The company anticipates a gross margin rate of 40% for fiscal 2024, with operating income projected between $251 million and $258 million [12].