Ollie’s Bargain Outlet (NASDAQ:OLLI) executives told investors the company capped fiscal 2025 with a “strong” fourth quarter and said both comparable store sales and earnings came in ahead of expectations, supported by customer acquisition gains, merchandising changes, and expense discipline.
President and CEO Eric van der Valk said the company delivered on its strategic objectives during the year, highlighting record store growth, expanded loyalty program initiatives, and investments intended to support future growth. Executive Vice President and CFO Robert Helm added that fourth-quarter results reflected “solid comp growth, healthy margin, and disciplined expense control,” even as severe winter weather disrupted operations late in the quarter.
Record store growth and an expanded customer file
The company also framed loyalty expansion as a major lever for customer acquisition. Van der Valk said Ollie’s enhanced the Ollie’s Army program with initiatives such as an “Ollie’s Army Night,” making the Ollie’s Days event exclusive to members, giving members advanced notice of special events, and rolling out the Ollie’s Credit Card. He said those efforts contributed to stronger customer acquisition throughout the year, with new memberships up 23% and the total customer file up more than 12%.
Helm reported the loyalty base reached 17 million members, up more than 12% for the year.
Fourth-quarter results and weather disruption
For the fourth quarter, Helm said net sales increased 17% to $779 million, driven by new store openings and comparable store sales growth. Comparable store sales rose 3.6%, which he said was driven by increases in both basket size and transactions.
Category performance was led by seasonal, consumable, hardware, stationery, and sporting goods, according to Helm. He also noted that seasonal decor investments and changes to the company’s approach to toys “resonated with our customers” and were “big wins” in the quarter, echoing earlier comments from van der Valk about actively steering assortment and category mix.
Management repeatedly pointed to weather as a meaningful headwind. Helm said major storms around Black Friday weekend, the weekend of Ollie’s Army Night, and the end of January led to “a significant number of store closures and disruptions to the business,” adding that the company’s geography made it “particularly hard hit.” In response to an analyst question, he said January’s “exit rate would’ve been the strongest comp of the quarter” if not for winter storm impacts that forced hundreds of store closures for multiple days in the final week of the quarter.
New-store performance in the quarter was “slightly below” plan, Helm said, contrasting with outperformance earlier in the year. He attributed part of the dynamic to the soft-opening approach flattening the “reverse waterfall” of first-year sales, which he said proved more impactful in the fourth quarter due to higher holiday engagement levels among Ollie’s Army members.
- Gross margin: 39.9%, above plan but about 80 basis points lower than last year, which Helm said was largely due to planned price investments.
- SG&A: Excluding a $5 million one-time expense tied to an equity award modification in the prior-year fourth quarter, SG&A as a percentage of net sales decreased 40 basis points to 24.2%, driven by fixed-cost leverage and marketing optimization benefits.
- Pre-opening: $2.3 million, down 53% due to earlier timing of store openings versus last year.
- Adjusted net income: $85 million, up 16%.
- Adjusted EPS: $1.39, up 17%.
- Adjusted EBITDA: $127 million, up 16%, with adjusted EBITDA margin down 10 basis points to 16.3%.
Balance sheet, buybacks, and capital investment
Helm said cash and investments rose more than 31% year-over-year, or $134 million, to $563 million, and that the company ended the quarter with “no meaningful long-term debt.” Inventories were up 18% year-over-year, which he attributed primarily to new store growth and “strong deal flow.”
Capital expenditures were $18 million in the quarter, largely directed toward new store openings, improvements of existing stores, and supply chain investments. Helm said some stores were pulled forward into early fiscal 2026, which pushed capex and pre-opening costs “a little higher” than expected.
The company repurchased $34 million of stock in the quarter and $74 million for the full fiscal year, Helm said, and ended the year with $259 million remaining under its current repurchase authorization. He also said management is “stepping up” buybacks in fiscal 2026.
FY2026 outlook and a new long-term “algorithm”
Looking ahead, van der Valk said the company plans to open 75 stores in fiscal 2026, continuing contiguous expansion across new and existing markets. He noted the company entered its 35th state with an opening in Austin, Minnesota, and said Ollie’s expects to enter New Mexico later in the year. With 658 stores in 35 states, van der Valk said the company is “only at the halfway mark” of its long-term goal of more than 1,300 stores.
Both van der Valk and Helm described what they called an “inflection point,” driven by the company’s larger scale and retail consolidation improving access to merchandise and deals. Management said it now believes a 2% comparable sales target and a 40.5% gross margin target are sustainable longer term, describing them as a balance between price and margin.
Helm also addressed tariffs, calling the situation “very fluid,” but said tariffs represent another form of disruption and that the company expects it would mitigate any margin pressure.
In addition, Helm said Ollie’s is targeting returning approximately 50% of free cash flow to investors through share repurchases going forward, while reiterating that reinvesting in the business remains the first priority. When asked about potentially larger repurchases, Helm said the $100 million repurchase level embedded in fiscal 2026 assumptions is viewed as “a conservative target,” and that the company would aim to stick to the 50% free cash flow return framework if operating cash flow increases.
For fiscal 2026, Helm provided the company’s initial outlook, as presented in its earnings release, including:
- New stores: 75 openings
- Net sales: $2.985 billion to $3.013 billion
- Comparable store sales growth: around 2%
- Gross margin: around 40.5%
- Adjusted EPS: $4.40 to $4.50
- Capital expenditures: $103 million to $113 million, including nearly $20 million for expansions at Texas and Illinois distribution centers
Management also discussed initiatives for fiscal 2026, including improving the in-store shopping experience, refining marketing through a dynamic media mix model, expanding IT application development, integrating technology and data analytics (including “proven AI” where appropriate), growing planning and allocation capabilities, and increasing distribution capacity while planning for a fifth distribution center.
About Ollie’s Bargain Outlet (NASDAQ:OLLI)
Ollie’s Bargain Outlet is an American discount retailer specializing in closeout merchandise and surplus inventory across a broad range of categories. The company operates a no-frills retail format that offers branded and private-label products at significant markdowns. Its merchandise mix typically includes housewares, electronics, health and beauty items, food products, beauty supplies, books, toys, and seasonal goods.
Founded in 1982 by Oliver E. “Ollie” Rosenberg, the company is headquartered in Harrisburg, Pennsylvania.
