Ollie's Bargain Outlet (OLLI) Q1 2025 earnings summary

Executive summary

• Net sales rose 10.8% year-over-year to $508.8 million in Q1 2024, driven by new store openings and a 3.0% increase in comparable store sales.

• Net income increased 49.6% to $46.3 million, with adjusted EPS up 49% to $0.73.

• Four new stores opened in Q1, bringing the total to 516 locations across 30 states, up 8.4% year-over-year.

• Acquisition of 11 99 Cents Only Stores in Texas and key executive promotions, including a planned CEO transition in early 2025, support future growth.

• Investments in people, supply chain, stores, marketing, and systems have driven execution, productivity, and long-term growth.

Financial highlights

• Gross margin expanded 220 basis points to 41.1%, aided by favorable supply chain costs and higher merchandise margins.

• Operating income increased 47% to $56 million; operating margin rose 270 basis points to 11.1%.

• Adjusted EBITDA increased 40.3% to $69.4 million; adjusted EBITDA margin up to 13.6%.

• SG&A expenses decreased 40 basis points to 28% of net sales, despite a 9.3% increase in dollar terms.

• Cash and short-term investments totaled $342 million at quarter-end, with no outstanding revolver borrowings.

Outlook and guidance

• Full-year 2024 guidance raised: net sales of $2.257–$2.277 billion, comparable store sales growth of 1.5%–2.3%, gross margin ~40%, operating income of $250–$258 million, adjusted net income of $196–$202 million, and adjusted EPS of $3.18–$3.28.

• Targeting 50 new store openings (less 2 closures), with 11 from 99 Cents Only acquisition; some planned openings shifted to early 2025.

• Capital expenditures projected at $90 million (excluding $14.6 million for store acquisitions); pre-opening expenses ~$17 million.

• Fourth distribution center in Princeton, IL, expected to be operational in the second half of fiscal 2024.

• Sufficient liquidity is expected to fund capital needs over the next 12 months.