Financial Data and Key Metrics Changes - Net sales increased by 19% to $614 million, driven by new store openings and comparable store sales growth [18] - Comparable store sales rose by 3.3%, supported by a mid-single-digit increase in transactions, partially offset by a decrease in average ticket price [18] - Adjusted net income and adjusted earnings per share increased by 29% to $46 million and $0.75, respectively [19] - Adjusted EBITDA increased by 22% to $73 million, with an adjusted EBITDA margin increase of 30 basis points to 11.9% [19] - Total cash and investments rose by 42% to $432 million, with no meaningful long-term debt [20] Business Line Data and Key Metrics Changes - The company opened 32 new stores in Q3, totaling 645 stores, representing an 18% year-over-year growth [17] - Membership in the Ollie's Army loyalty program increased by 12% to 16.6 million members, driven by new customer acquisition [17] - The top five performing categories were food, seasonal, hardware, stationery, and lawn and garden [19] Market Data and Key Metrics Changes - The company noted strength in higher-income consumers, particularly those with household incomes above $100,000, while lower-income consumers showed some softness [31] - The company is benefiting from a challenging retail environment, which has led to increased deal flow and customer acquisition [31] Company Strategy and Development Direction - The long-term target is to reach 1,300 stores, with a commitment to a minimum of 10% annual unit growth [7] - The company is focusing on customer acquisition and loyalty through the Ollie's Army program, which has seen a 30% year-over-year increase in new memberships [9] - The marketing strategy is shifting towards a digital-first approach, reallocating resources from traditional print to digital media [14][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning, citing strong deal flow, expanding customer base, and widening price gaps [26] - The company raised its full-year sales and earnings outlook based on better-than-expected Q3 results and a strong start to Q4 [6][17] - Management acknowledged the challenges in the retail environment but emphasized the opportunities for growth and market share capture [15] Other Important Information - The company plans to expand its Texas distribution center by 150,000 sq ft and increase service capacity by approximately 50 stores [15] - Capital expenditures totaled $31 million for the quarter, primarily for new store openings and the build-out of acquired stores [21] Q&A Session Summary Question: Can you frame out the state of your consumer in light of your basket commentary? - Management noted strength in higher-income consumers and some softness in lower-income consumers, potentially due to external factors like government shutdowns [31] Question: Could you elaborate on the components of the third-quarter comp? - Management reported a positive 3.3% comp, with mid-single-digit positive transaction trends and a decline in average ticket price [37][38] Question: Can you talk about customer acquisition trends? - Management highlighted strong customer acquisition, particularly among younger demographics, and noted good retention rates in the Ollie's Army program [46] Question: What are your thoughts on SG&A levers? - Management indicated a focus on leveraging SG&A through operational efficiencies and anticipated benefits from new store openings [53] Question: How are new stores performing, particularly those in bankruptcy locations? - New store performance has been strong, with many stores outperforming expectations, especially those near closed Big Lots locations [71] Question: What are the margin implications of direct sourcing versus closeout? - Management confirmed that seasonal gifts are a mix of direct sourcing and closeouts, with direct sourcing generally yielding better margins [78]