Ollie’s Earnings: Record Unit Growth Fuels Double-Digit Sales and EPS Surge
- Hardik Shah
- 2 days ago
- 4 min read
TLDR
Revenue Strength: Net sales +18.6% YoY to $613.6M, driven by record store openings and +3.3% comparable-store growth.
Margin Trends: Gross margin stable at 41.3% despite tariff pressures; SG&A leverage improves 50 bps.
Forward Outlook: FY25 sales and EPS guidance raised; pipeline set for 75 new stores in FY26 and strong momentum into holiday season.
Business Overview
Ollie’s Bargain Outlet is a leading U.S. off-price retailer focused on “Good Stuff Cheap”—national brands across consumables, household goods, toys, hardware, and seasonal categories priced up to 70% below traditional retailers.
The business operates 645 stores across 34 states as of Q3 FY25, supported by a flexible closeout-driven buying model that prioritizes opportunistic purchasing of excess inventory, abandoned order books, and vendor closeouts. Ollie’s customer base is centered around value-seeking households, increasingly skewing younger and higher-income, as its Ollie’s Army loyalty program grows toward 17 million members.
Channels:
100% brick-and-mortar retail
Marketing transitioning from print to an increasingly digital-first ecosystem
National distribution network being expanded (Texas and Illinois)
Ollie’s Earnings
Revenue
Net sales: $613.6M (+18.6% YoY), beating internal expectations and driven by:
Record 32 new stores opened during the quarter
Comparable-store sales +3.3%, led by mid-single-digit transaction growth
Top-performing categories: food, seasonal, hardware, stationery, lawn & garden.
Management commentary reinforced that customers are prioritizing necessity categories, and Ollie’s ability to source compelling consumable deals strengthened traffic.
“We delivered industry-leading sales growth… all while driving significant improvement on the bottom line.” — CEO Eric van der Valk
Margins
Gross margin: 41.3%, down 10 bps YoY due to higher supply-chain and tariff costs, partly offset by higher merchandise margins.
SG&A: 29.4% of sales, a 50 bps improvement YoY, driven by lower professional fees, lower stock-based compensation, and increased marketing efficiency.
Adjusted EBITDA: $72.9M (+21.8%), margin of 11.9% (+30 bps).
“October was our strongest month… even as we meaningfully reduced our print campaign.” — CEO Eric van der Valk on marketing leverage
Profitability
Net income: $46.2M (+28.7% YoY)
Adjusted EPS: $0.75 (+29.3% YoY)
Interest income: remains a tailwind given strong cash balance
Operating margin: 9.0%, up 40 bps YoY.
Cash, Liquidity & Balance Sheet
Total cash & investments: $432.2M (+42% YoY)
No meaningful long-term debt
Inventory +16% YoY due to accelerated store growth and strong deal flow.
CFO Rob Helm emphasized the strategic advantage:
“We remain committed to a fortress-type balance sheet as it helps drive our business.” — CFO Rob Helm
Forward Guidance
Ollie’s raised its full-year 2025 outlook:
Net sales: $2.648B–$2.655B (previous: $2.631B–$2.644B)
Comparable sales: +3.2%–3.5%
Operating income: $293M–$298M
Adjusted EPS: $3.81–$3.87 (previous: $3.76–$3.84)
Store openings: 86 (vs. prior guide of 85)
For FY26, Ollie’s targets 75 new stores, heavily front-loaded, driven by continued real estate availability—especially second-generation “warm box” sites vacated by distressed retailers.
Risks & Opportunities
Opportunities:
Secular trade-down and value-seeking consumer behavior
Enhanced digital marketing ROI
Expansion of consumables and seasonal categories
Increased availability of high-quality closeout inventory
Market-share capture from Big Lots closures
Risks:
Ongoing tariff volatility impacting supply chain costs
Weather sensitivity, particularly in seasonal categories
Potential softening in lower-income consumer segments
Labor and medical cost inflation
Inventory balancing amid accelerated store growth
Operational Performance
Store Growth & Productivity
Q3 FY25 marked Ollie’s largest quarterly opening in company history with 32 stores. Year-to-date openings reached 86, exceeding initial plans.
85% of new stores opened this year are beating plan.
Soft opening strategy has reduced operational strain and delivered more consistent comp trajectories.
Supply Chain & Marketing
Texas distribution center undergoing a 150,000 sq ft expansion to support ~800 stores.
Illinois DC expansion to begin late next year.
Marketing shifting aggressively from print to digital as ROI improves.
Segment Snapshot (Not Formal Segments)
Consumables: Strongest traffic driver; increased mix lowers AUR but accelerates transactions.
Seasonal: Significantly expanded assortment; one of top-performing categories.
CPG partnerships: Vendor relationships strengthen as consolidation leaves excess order-book inventory.
Market Insights
Consolidation across retail and ongoing bankruptcies have created a high-quality real estate pipeline and robust closeout inventory availability.
Rising consumer value-seeking behavior disproportionately benefits off-price retailers.
Ollie’s widened price gaps to “fancy retailers” while still expanding merchandise margins.
The market for closeouts remains unusually favorable, and CPG companies increasingly turn to Ollie’s for rapid liquidation of excess inventory.
Consumer Behavior & Sentiment
Transaction strength driven by low AUR deal flow and aggressive pricing on consumables.
Younger shoppers (18–34) and higher-income households ($100K+) are the fastest-growing cohorts.
Lower-income shopper softness noted, potentially tied to government shutdown disruptions.
Ollie’s Army loyalty program +12% YoY to 16.6M members.
Customer acquisition remains one of the strongest in company history:
“One of the strongest from an acquisition standpoint we’ve ever experienced as a company.” — CEO Eric van der Valk
Strategic Initiatives
1. Accelerated Unit Growth
Long-term target: 1,300 stores
Near-term: 10%+ annual unit growth
Heavy emphasis on second-generation real estate (Big Lots conversions)
2. Digital-First Marketing Transformation
Reallocating print dollars into digital channels
Improved targeting, higher engagement, and better spend efficiency
Shared Mail remains part of the mix, but the digital replica is becoming the primary delivery mechanism
3. Category Mix Optimization
Steering buying toward high-velocity consumables
Expanding seasonal & gift categories
Continued push to develop deeper direct relationships with CPG vendors
4. Supply Chain Investments
DC expansions designed to improve throughput and enhance buying flexibility
Capital Allocation
Share repurchases: $11.6M in Q3; $293M remaining authorization
Capex: ~$88M FY25, driven by store openings and DC expansion
No dividend—capital remains focused on growth and buybacks
Balance sheet remains conservative to maintain negotiating strength with vendors
The Bottom Line
Ollie’s delivered a high-quality quarter characterized by robust unit growth, strong customer acquisition, and disciplined cost management. The company enters the holiday period with accelerating momentum, strengthened vendor relationships, and a clear path to sustained double-digit top-line and mid-teens earnings growth.
Key themes for investors:
Store growth flywheel remains firmly intact with 75+ new stores for FY26.
Gross margin resilience demonstrates pricing power and buying capability even amid tariff noise.
Digital transformation is unlocking new efficiency in customer acquisition and marketing leverage.
Ollie’s continues to be one of the most structurally advantaged players in off-price retail, with a long runway and an increasingly diversified customer base.
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