Ollie's Bargain Outlet reported a solid second quarter, with lifts across 70% of its product categories.
Value-seeking shoppers across nearly all income levels drove an especially strong second quarter performance by Ollie’s Bargain Outlet Holdings, Inc. Financial results for the period ending July 29 were positive, as customers sought deals on a range of consumable and non-consumable goods.
“Our second quarter results were ahead of our expectations, driven by strong comparable store sales and margin expansion. This marks our fifth consecutive quarter of positive comp store sales and we are raising our full-year sales and earnings guidance,” President and CEO John Swygert told investors during an Aug. 31 webcast. The retailer expects to return to its long-term algorithm of double-digital sales growth, 40% gross margin and double-digit EBITDA growth, the CEO noted.
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Aligning with the ongoing high-price marketplace, shoppers flocked to extreme value merchandise throughout Ollie's stores. “Our sales strength in the second quarter was broad based, with almost 70% of our categories comping positive,” said Swygert.
The food category fueled many of the Q2 sales gains. Ollie’s stores carry a variety of food and beverage products, such as rice, coffee pods, cereal, energy drinks and snacks sold at up to 50% off traditional grocery prices. Other top-performing categories included candy, summer furniture, lawn and garden items and housewares.
During the second quarter, total net sales at Ollie's rose 13.7% to reach $515.5 million and comp sales climbed 7.9% from the prior year increase of 1.2%. Operating income rose by a whopping 217.5% to $52.5 million, while net income jumped 199.2% to $42.2 million and adjusted EBITDA surged 146.7% in that time frame.
Reflecting consumers’ interest in scoring savings in a closeout environment, the company reported that spending was up across the board. “Our new customer acquisition continues to be very strong, especially in the $100,000-plus income cohort. That seems to indicate that those customers are really looking for and need value,” remarked COO Eric van der Valk during the earnings call.
Ollie’s aims to build on its recent momentum, sharing plans to add another distribution center within the year and open 50 new locations in 2024. The company opened six new stores during the second quarter alone.
Harrisburg, Pennsylvania-based Ollie’s offers extreme value on brand-name products in a variety of departments, including housewares, food, books and stationery, bed and bath, floor coverings, toys, health and beauty aids, and more. It currently operates more than 472 stores in 29 states.