Ollie’s Earnings: Strong Q2 Growth, Raised Outlook on Store Expansion
- Hardik Shah
- 5 minutes ago
- 3 min read
TLDR
Revenue Strength: Net sales up 17.5% to $680M, driven by 29 new stores and 5% comp growth.
Margin Trends: Gross margin expanded 200 bps to 39.9%, with SG&A pressure from medical claims.
Forward Outlook: Raised FY2025 guidance—sales up to $2.64B, EPS of $3.76–$3.84, 85 store openings.
Business Overview
Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ: OLLI) is a leading U.S. off-price retailer operating 613 stores across 34 states as of Q2 2025. The company thrives on a flexible buying model focused on closeout merchandise and excess inventory, offering consumers discounts up to 70% below traditional retailers. Its Ollie’s Army loyalty program now boasts over 16.1 million members, accounting for more than 80% of sales.
“We are driving the business to new heights through improved planning, coordination and execution across the organization. With so many retailers closing stores or going bankrupt in the past year, there's an opportunity to gain market share through expanding our footprint, acquiring new customers and turning these customers into loyal Ollie’s Army members.” — Eric van der Valk, CEO
Ollie's Earnings Q2'25
Revenue: Net sales rose 17.5% YoY to $679.6M, driven by new stores and a 5.0% increase in comparable store sales.
Profitability: Net income climbed 25% to $61.3M, with EPS up to $0.99. Adjusted EBITDA rose 26% to $93.8M, with margin expanding to 13.8%.
Margins: Gross margin improved 200 bps to 39.9%, benefiting from lower supply chain costs, stronger deal flow, and reduced shrink. SG&A rose modestly to 25.8% of sales, pressured by higher medical and casualty claims.
Balance Sheet: Cash and investments grew 30% to $460M, with virtually no long-term debt.
Forward Guidance
Management Outlook: Ollie’s raised FY2025 guidance. It now expects:
Net sales: $2.631B–$2.644B (up from $2.58B–$2.60B)
Comparable store sales: 3.0%–3.5% (vs. prior 1.4%–2.2%)
Adjusted EPS: $3.76–$3.84 (vs. $3.65–$3.75)
Risks & Opportunities: Tariff uncertainty, higher medical costs, and elevated store openings pose short-term risks, while retail bankruptcies, closeout consolidation, and Ollie’s Army expansion present growth opportunities.
Operational Performance
Store Growth: Opened 29 stores in Q2, up from 9 last year. On track for 85 new stores in FY2025, including sites from bankrupt Big Lots locations.
Supply Chain: Distribution center expansions in Illinois and Texas will support growth, extending service capacity to the mid-800 store range.
Productivity: Strong performance in Lawn & Garden, Hardware, Food, Housewares, and Domestics. Seasonal sales rebounded in June–July as weather normalized.
Market Insights
Ollie’s continues to benefit from a consolidating closeout industry. Tariff disruptions and retail bankruptcies created new buying opportunities, allowing Ollie’s to secure better deals and expand supplier relationships. The company is leveraging its scale to maintain value gaps while sustaining elevated merchandise margins.
Consumer Behavior & Sentiment
Loyalty Impact: Ollie’s Army members spend 40% more per visit than non-members. The reimagined Ollie’s Days event, with a member-exclusive shopping night, drove record engagement, new member signups, and contributed ~100 bps to comp growth.
Demographic Shifts: Customer file is trending younger, with digital strategies resonating with new cohorts. Higher-income consumers are also trading down, broadening Ollie’s appeal.
“Ollie’s Army members shop more frequently and spend over 40% more per visit than non-members. They account for more than 80% of our sales and are now more than 16 million strong.” — Eric van der Valk, CEO
Strategic Initiatives
Accelerated Store Growth: Achieved its highest-ever unit growth pace, surpassing prior full-year records in just six months.
Loyalty Revamp: Enhanced Ollie’s Army program, making it a cornerstone of customer acquisition and retention strategy.
Supply Chain Investments: Automation and freight procurement improvements are improving efficiency and cost control.
Capital Allocation
Share Repurchases: Repurchased $12M of common stock in Q2; ~$304M remains under authorization.
Capex: Spent $26M in Q2, primarily on new stores and distribution upgrades. FY2025 capex expected at $83–88M.
Balance Sheet: Maintains a “fortress” balance sheet with no meaningful long-term debt.
“Our financial stability, the visibility of being a public company and our size and scale truly differentiates us in the closeouts and off-price space. We are committed to maintaining a fortress type of balance sheet on the go forward because it helps drive our business.” — Robert Helm, CFO
The Bottom Line
Ollie’s Q2 results highlight accelerated store expansion, loyalty-driven comp growth, and margin gains despite cost headwinds. Looking ahead, investors should watch:
Execution of the 85-store opening plan and its effect on margins.
Consumer response to expanded loyalty initiatives and digital engagement.
Closeout deal flow stability amid tariffs and retail consolidation.
Ollie’s balance sheet strength and scaled buying power position it to capture market share and deliver sustained shareholder returns.
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