Ollie’s Bargain Outlet Earnings: Growth, Expansion, and Market Opportunity
- Hardik Shah
- Mar 20
- 3 min read
TL;DR
Steady Growth: Q4 comparable store sales rose 2.8%, with total net sales reaching $667.1M.
Aggressive Expansion: Plans to open 75 new stores in 2025, leveraging bankruptcy-acquired locations.
Financial Strength: Adjusted EPS of $1.19; strong balance sheet with $428.7M in cash and no outstanding borrowings.
Financial Results
Ollie’s Bargain Outlet operates as a leading closeout retailer, offering deeply discounted brand-name products. The company benefits from disruptions in the retail landscape, acquiring excess inventory and store leases from struggling competitors.
Ollie's Q4 Earnings:
Net Sales: $667.1M, up 2.8% YoY (8.5% excluding the impact of the 53rd week in 2023).
Comparable Store Sales: Increased 2.8%.
Gross Margin: 40.7%, a slight improvement due to lower supply chain costs.
Net Income: $68.6M ($1.11 per diluted share), down 10.4% YoY due to one-time executive equity awards.
Adjusted Net Income: $73.4M ($1.19 per diluted share), a 3.8% decrease YoY.
Adjusted EBITDA: $109.4M with a margin of 16.4%.
For fiscal 2024, Ollie’s reported total net sales of $2.272B, an 8.0% increase YoY, with net income of $199.8M ($3.23 per share).
Management Outlook for Fiscal 2025
Projected Net Sales: $2.564B – $2.586B
Comparable Store Sales Growth: 1% – 2%
Adjusted EPS Guidance: $3.65 – $3.75
Planned Capital Expenditures: $83M – $88M
CEO Eric van der Valk stated, “With so many retailers closing stores or going bankrupt in the past year, there are a considerable number of abandoned customers, merchandise, real estate, and talent in the marketplace. We think there is a unique opportunity to take on some of these assets in a manner that strengthens our competitive positioning.”
Operational Performance
Industry & Market Trends
Ollie’s capitalizes on consumer demand for value-oriented shopping, benefiting from:
Retail bankruptcies (e.g., Big Lots store closures), creating opportunities for store expansion.
Tariff disruptions, which increase the availability of closeout merchandise.
Economic pressures, driving consumers to discount retailers.
Key Business Milestones
Opened 13 new stores in Q4 and 50 total stores in fiscal 2024, bringing the total to 559 stores across 31 states.
Expanded Ollie’s Army loyalty program to 15.1M members, with over 80% of sales from members.
Acquired 40 additional store leases from Big Lots, with below-market rents and long-term leases.
Challenges & Risks
Higher SG&A expenses due to store growth and earlier store openings.
Dark rent expenses (~$5M) associated with the Big Lots store acquisitions.
Macroeconomic uncertainty, including consumer spending patterns and potential tariff increases.
Strategic Initiatives
Mergers & Acquisitions
Ollie’s continues aggressive expansion, acquiring Big Lots store leases to accelerate footprint growth. These stores, already serving value-conscious shoppers, are expected to generate outsized profitability over the long term.
Investments & Infrastructure
Opened a new Princeton, IL distribution center, enhancing supply chain efficiency.
Continued investment in automation and store infrastructure to support growth.
Plans to open 75 new stores in 2025, prioritizing first-half openings to optimize performance.
Operational Improvements
Improved inventory management, with a 9% YoY increase in inventory driven by store growth.
Enhanced process efficiency to offset rising labor costs.
Capital Allocation
Share Buybacks
In Q4, $5.7M spent on share repurchases; total $53M for fiscal 2024.
Announced a new $300M share repurchase authorization effective through 2029.
Debt & Liquidity Management
$428.7M in cash and short-term investments.
No outstanding borrowings under the $100M revolving credit facility.
The Bottom Line
Ollie’s delivered solid Q4 and full-year 2024 results, maintaining sales growth and profitability despite economic headwinds. The company is aggressively expanding, leveraging retail bankruptcies to accelerate store openings while maintaining a strong balance sheet and strategic focus on value-driven retailing.
As CFO Robert Helm summarized, “While accelerated growth is our primary focus in the short term, we remain committed to returning capital to our investors through share repurchases while balancing our strategic growth opportunities and working capital needs.”
With 75 new stores set to open in 2025, continued inventory availability, and an increasing loyalty base, Ollie’s is positioning itself as a dominant force in the closeout retail market.
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