Ollie's Bargain Q2 Earnings Beat, Comps Rise 5%, Guidance Raised

Core Insights - Ollie's Bargain Outlet Holdings, Inc. (OLLI) reported strong second-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year improvement [1][9] - The company's value-driven model is resonating well with consumers, particularly in a challenging retail environment, leading to an increase in full-year guidance [1][14] Quarterly Performance - Adjusted earnings were reported at $0.99 per share, surpassing the Zacks Consensus Estimate of $0.91, and improving from $0.78 per share in the same quarter last year [2] - Net sales increased by 17.5% year over year to $679.6 million, driven by new store openings and a 5% rise in comparable store sales, exceeding the Zacks Consensus Estimate of $663 million [3] Margin Analysis - Gross profit rose by 23.9% to $271.3 million, with gross margin expanding by 200 basis points to 39.9%, benefiting from lower supply-chain costs [4] - Operating income grew by 26.7% to $77 million, with operating margin improving by 80 basis points to 11.3% [5] Store Expansion and Customer Engagement - Ollie's Bargain opened 29 new stores during the quarter, bringing the total to 613 stores across 34 states, reflecting a 16.8% year-over-year growth [6] - The Ollie's Army loyalty program grew by 10.6% to 16.1 million members, indicating strong consumer engagement [6] Financial Snapshot - The company ended the quarter with $460.3 million in total cash and investments, marking a 30.3% year-over-year increase, and remains debt-light [7] - Capital expenditures were $26.4 million, with $11.5 million worth of stock repurchased, demonstrating commitment to shareholder returns [7] Full-Year Outlook - Management raised the full-year guidance, projecting net sales in the range of $2,631-$2,644 million, up from $2,579-$2,599 million [10] - Comparable store sales growth is now forecasted at 3-3.5%, an increase from the previous estimate of 1.4-2.2% [10] Future Expectations - For the third quarter, comparable store sales growth is projected at around 3%, above the long-term algorithm of 1-2% [13] - The company plans to open most of its remaining new stores in the third quarter, which is expected to provide additional sales support [13]