Ollie's Bargain Outlet (OLLI)2025-06-03 13:30Financial Data and Key Metrics Changes - Net sales increased by 13% to 46.1 million, with adjusted earnings per share at $0.75 [21] - Gross margin remained flat at 41.1%, slightly ahead of expectations, while SG&A expenses as a percentage of sales increased by 60 basis points to 28.6% [19][21] Business Line Data and Key Metrics Changes - Comparable store sales grew by 2.6%, driven by an increase in transactions [18] - The company opened 25 new stores in the first quarter, a record for any period in its history, bringing the total to 584 stores, a 13% year-over-year increase [17][20] - Ollie's Army membership increased by over 9% to 15.5 million members, with sales to members representing over 80% of total sales [18] Market Data and Key Metrics Changes - The closeout market remains fluid, with significant retail store closures creating excess inventory and strong deal flow [7][9] - Demand for consumer staples was consistently strong, while certain seasonal categories were impacted by weather [16] Company Strategy and Development Direction - The company is aggressively pursuing market share by accelerating store growth, expanding digital marketing capabilities, and enhancing the Ollie's Army customer loyalty program [10][26] - The strategic focus includes investing in people and delivering extraordinary value to consumers [26] - The company plans to maintain its gross margin target of 40% and expects to open 75 new stores in the fiscal year [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current complex environment and reaffirmed the financial outlook for the fiscal year [14] - The company anticipates significant product and market share opportunities due to retail store closures and supply chain disruptions [9][10] - Management expects second quarter comparable store sales growth to be at the lower end of the 1% to 2% range [25] Other Important Information - The company completed the initial rollout of a co-branded credit card, seeing strong spending and shopping frequency [12] - A new private shopping event for Ollie's Army members is planned, enhancing the loyalty program [13][66] Q&A Session Summary Question: State of closeout availability and impact of tariffs - Management noted strong deal flow and access to product pipelines due to retail bankruptcies and store closures, with expectations for increased product availability in the back half of the year [31][33] Question: Traffic trends and confidence in second quarter comps - Traffic has been strong, with core comps running in the low to mid single-digit range, despite some impact from seasonal categories [35][36] Question: Impact of tariffs on supplier negotiations and pricing - Management emphasized maintaining value propositions and price gaps, while reducing reliance on Chinese imports [40][42] Question: Real estate opportunities and store openings - The pipeline for new store openings is strong, with expectations for above-average growth in 2026 [50] Question: Impact of Big Lots closures on comps - The liquidation of Big Lots stores had a minor impact on comps, with some stores seeing a low to mid single-digit lift [54][55] Question: Cadence of comps and Ollie's Army Night - The company expects the Ollie's Army Night to provide a slight lift, though not at the same level as the December event [90][91] Question: Gross margin expectations and tariff impact - Management anticipates gross margin to follow a seasonal flow, targeting 40% for the year, with some tariff impact already included [70][71] Question: Pricing strategy amidst tariff pressures - The company remains committed to maintaining price gaps and is closely monitoring competitor pricing strategies [74][76] Question: Ollie's Army membership growth and performance - Newer stores are seeing higher conversion rates to Ollie's Army membership, benefiting from customer familiarity with loyalty programs [86][88]