Ollies Bargain Outlet Holdings Reports Strong Second Quarter Financial Results Raises Fiscal Year Ou
Intellectia.AI Updated: 2024-08-29
Ollie's Bargain Outlet Holdings Reports Strong Second Quarter Financial Results; Raises Fiscal Year Outlook
Harrisburg, Pa., August 29, 2024 — Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) today announced its financial results for the second quarter ended August 3, 2024.
Key Financial Metrics:
| Metric | Q2 FY2024 | Q2 FY2023 | YoY Change (%) | Consensus Estimate | Beat/Miss |
|---|---|---|---|---|---|
| Total Revenue | $578.4M | $514.5M | 12.4% | $560.92M | Beat by $17.48M |
| Earnings Per Share (EPS) | $0.79 | $0.68 | 16.2% | $0.78 | Beat by $0.01 |
| Adjusted EPS | $0.78 | $0.67 | 16.4% | ||
| Operating Income | $60.8M | $52.5M | 15.6% | ||
| Net Income | $49.0M | $42.2M | 16.1% | ||
| Gross Profit | $219.0M | $196.7M | 11.4% | ||
| Gross Margin | 37.9% | 38.2% | -30 bps |
Interpretation: Ollie's posted robust financial gains with a significant year-over-year revenue increase of 12.4%, driven by new store openings and a comparable store sales growth of 5.8%. The EPS of $0.79 surpassed Wall Street expectations, underscoring effective cost control and operational efficiency improvements.
Segment Revenue Performance:
| Segment | Q2 FY2024 Revenue (M) | Prior Guidance | Variance (%) |
|---|---|---|---|
| New Stores & Comparable Sales | $578.4 | Not provided | Not applicable |
Interpretation: The robust sales were fueled primarily by the cumulative effects of new store openings and a healthy increase in comparable store sales. The actual revenue performance exceeded analyst expectations, demonstrating the company's strength in execution and market penetration.
Key Developments and Operational Highlights:
- Comparable store sales increased by 5.8%.
- Nine new stores were opened, bringing the total store count to 525, marking an 8.9% increase year-over-year.
- Operating income increased by 15.6% with an operating margin improvement of 30 basis points.
- Adjusted EBITDA improved by 16.4% to $74.5 million, with an adjusted EBITDA margin increase of 50 basis points to 12.9%.
- Inventory levels rose by 6.6% to support new store openings and broader product assortments.
Comments from Company Officers:
John Swygert, CEO, stated, "We are pleased that our great deal flow, disciplined expense control, and strong execution have led to better-than-expected sales and earnings this quarter. We continue to invest in our people, supply chains, stores, and marketing, which is contributing to better productivity and strong financial performance. Our fiscal 2024 outlook remains positive as we anticipate opening 50 new stores and maintaining a 40% annual gross margin."
Share Repurchase Program:
During the second quarter, Ollie's repurchased 81,340 shares of its common stock for $6.4 million. The company has $54.2 million remaining under its current share repurchase program.
Dividends:
No dividends were announced in this quarter.
Forward Guidance:
Ollie’s has updated its fiscal 2024 outlook, raising its revenue and earnings expectations. It plans to open 50 new stores, achieving a 40% annual gross margin and an adjusted EBITDA margin in the low-teens.
| Fiscal 2024 Guidance | Updated | Previous |
|---|---|---|
| Store Openings | 50 | 50 |
| Gross Margin (%) | 40% | 40% |
| Adjusted EBITDA Margin (%) | Low-teens | Low-teens |
Stock Price Movement:
Following the earnings release, Ollie's stock saw a 5.03% decline.
Summary: Ollie’s Bargain Outlet Holdings reported a solid second quarter, with robust revenue and EPS growth exceeding expectations. The company’s disciplined cost control and focused operational performance contributed to these strong results. The fiscal year outlook remains optimistic with planned expansions and consistent financial targets.
