Ollies Bargain Outlet Holdings Inc

Previous wording

We operate on a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday nearer to January 31 st of the following year. References to “2024” refer to the 52-week period of February 4, 2024 to February 1, 2025. References to “2023” refer to the 53-week period of January 29, 2023 to February 3, 2024. References to the “second quarter of fiscal 2024” and the “second quarter of fiscal 2023” refer to the thirteen weeks of May 5, 2024 to August 3, 2024 and April 30, 2023 to July 29, 2023, respectively. Year-to-date periods ended August 3, 2024 and July 29, 2023 refer to the twenty-six weeks of February 4, 2024 to August 3, 2024 and January 29, 2023 to July 29, 2023, respectively. Historical results are not necessarily indicative of the results to be expected for any future period and results for any interim period may not necessarily be indicative of the results that may be expected for a full year.

Current wording

We operate on a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday nearer to January 31 st of the following year. References to “2024” refer to the 52-week period of February 4, 2024 to February 1, 2025. References to “2023” refer to the 53-week period of January 29, 2023 to February 3, 2024. References to the “third quarter of fiscal 2024” and the “third quarter of fiscal 2023” refer to the thirteen weeks of August 4, 2024 to November 2, 2024 and July 30, 2023 to October 28, 2023, respectively. Year-to-date periods ended November 2, 2024 and October 28, 2023 refer to the thirty-nine weeks of February 4, 2024 to November 2, 2024 and January 29, 2023 to October 28, 2023, respectively. Historical results are not necessarily indicative of the results to be expected for any future period and results for any interim period may not necessarily be indicative of the results that may be expected for a full year.

Previous wording

Since the founding of Ollie’s in 1982, we have grown organically by backfilling existing markets and leveraging our brand awareness, marketing and infrastructure to expand into new markets in contiguous states. We have expanded to 525 stores located in 31 states as of August 3, 2024.

Current wording

Since the founding of Ollie’s in 1982, our principal growth strategy has been the opening of new stores. Historically, we have grown organically by backfilling existing markets and leveraging our brand awareness, marketing and infrastructure to expand into new markets in contiguous states. More recently, we have expanded through acquiring former 99 Cents Only and Big Lots stores through a bankruptcy auction process. As of November 2, 2024, we operated a total of 546 stores located in 31 states.

Previous wording

We opened 9 new stores in the second quarter of fiscal 2024 and opened 6 new stores in the second quarter of fiscal 2023. We opened 13 new stores in the twenty-six weeks ended August 3, 2024 and opened 15 new stores and closed one store in the twenty-six weeks ended July 29, 2023.

Current wording

We opened 24 new stores and closed three stores, two closures where the Company chose not to renew the leases and one temporary closure related to Hurricane Helene, in the third quarter of fiscal 2024 and opened 23 new stores in the third quarter of fiscal 2023. We opened 37 new stores and closed three stores in the thirty-nine weeks ended November 2, 2024 and opened 38 new stores and closed one store in the thirty-nine weeks ended October 28, 2023.

Previous wording

We derived the condensed consolidated statements of income for the thirteen and twenty-six weeks ended August 3, 2024 and July 29, 2023 from our unaudited condensed consolidated financial statements and related notes. Our historical results are not necessarily indicative of the results that may be expected in the future.

Current wording

We derived the condensed consolidated statements of income for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 from our unaudited condensed consolidated financial statements and related notes. Our historical results are not necessarily indicative of the results that may be expected in the future.

Previous wording

Net sales increased to $578.4 million in the second quarter of fiscal 2024 from $514.5 million in the second quarter of fiscal 2023, an increase of $63.9 million, or 12.4%. The increase was the result of a non-comparable store sales increase of $34.9 million and an increase in comparable store sales of $29.0 million. The increase in non-comparable store sales was driven by new store unit growth.

Current wording

Net sales increased to $517.4 million in the third quarter of fiscal 2024 from $480.1 million in the third quarter of fiscal 2023, an increase of $37.4 million, or 7.8%. The increase was the result of a non-comparable store sales increase of $39.8 million, partially offset by a decrease in comparable store sales of $2.5 million. The increase in non-comparable store sales was driven by new store unit growth.

Previous wording

Comparable store sales increased 5.8% in the second quarter of fiscal 2024 compared with a 7.9% increase in the second quarter of fiscal 2023. The increase in comparable store sales primarily consisted of an increase in average transaction size and an increase in the number of transactions.

Current wording

Comparable store sales decreased 0.5% in the third quarter of fiscal 2024 compared with a 7.0% increase in the third quarter of fiscal 2023. The decrease in comparable store sales was due to a slight decline in the number of transactions and average transaction size.

Previous wording

SG&A increased to $145.7 million in the second quarter of fiscal 2024 from $134.6 million in the second quarter of fiscal 2023, an increase of $11.1 million, or 8.2%, primarily driven by higher selling expenses related to new store openings. As a percentage of net sales, SG&A decreased 100 basis points to 25.2% in the second quarter of fiscal 2024 compared to 26.2% in the second quarter of fiscal 2023, primarily the result of leverage of fixed expenses on the increase in comparable store sales and disciplined expense control.

Current wording

SG&A increased to $154.5 million in the third quarter of fiscal 2024 from $141.7 million in the third quarter of fiscal 2023, an increase of $12.8 million, or 9.0%, primarily driven by higher selling expenses related to new store openings. As a percentage of net sales, SG&A increased 40 basis points to 29.9% in the third quarter of fiscal 2024 compared to 29.5% in the third quarter of fiscal 2023, due to deleverage of fixed expenses associated with the decrease in comparable store sales.

Previous wording

Pre-opening expenses increased to $4.6 million in the second quarter of fiscal 2024 from $2.9 million in the second quarter of fiscal 2023 due to costs associated with the startup of the Company’s fourth distribution center in Princeton, IL as well as the comparative number of new stores. We opened 9 and 6 new stores in the second quarters of fiscal 2024 and fiscal 2023, respectively. As a percentage of net sales, pre-opening expenses increased to 0.8% in the second quarter of fiscal 2024 from 0.6% in the second quarter of fiscal 2023.

Current wording

Pre-opening expenses increased to $7.2 million in the third quarter of fiscal 2024 from $6.3 million in the third quarter of fiscal 2023 due to increased costs associated with the recently acquired former 99 Cents Only and Big Lots store locations, as well as timing of our planned new store openings. We opened 24 stores and closed three stores, two planned closures and one temporary closure related to Hurricane Helene in the third quarter of fiscal 2024 and opened 23 new stores in the third quarter of fiscal 2023. As a percentage of net sales, pre-opening expenses increased to 1.4% in the third quarter of fiscal 2024 from 1.3% in the third quarter of fiscal 2023.

Previous wording

Income tax expense increased to $15.7 million in the second quarter of fiscal 2024 compared to $13.8 million in the second quarter of fiscal 2023. The effective tax rates for the second quarters of fiscal 2024 and fiscal 2023 were 24.3% and 24.6%, respectively. The decrease in the effective tax rate in the second quarter of fiscal 2024 was primarily due to an increase in discrete tax benefits related to stock-based compensation. Discrete tax benefits totaled $0.8 million in the second quarter of fiscal 2024 compared to discrete tax benefits of $0.5 million in the second quarter of fiscal 2023.

Current wording

Income tax expense increased to $12.7 million in the third quarter of fiscal 2024 compared to $11.2 million in the third quarter of fiscal 2023. The effective tax rate for the third quarters of fiscal 2024 and fiscal 2023 was 26.1%, respectively. The effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes and discrete tax benefits primarily related to stock-based compensation. Discrete tax benefits totaled $0.3 million in the third quarter of fiscal 2024 compared to discrete tax benefits of $0.1 million in the third quarter of fiscal 2023.

Previous wording

As a result of the foregoing, net income increased to $49.0 million in the second quarter of fiscal 2024 from $42.2 million in the second quarter of fiscal 2023, an increase of $6.8 million or 16.1%.

Current wording

As a result of the foregoing, net income increased to $35.9 million in the third quarter of fiscal 2024 from $31.8 million in the third quarter of fiscal 2023, an increase of $4.1 million or 12.8%.

Previous wording

Adjusted EBITDA increased to $74.5 million in the second quarter of fiscal 2024 from $64.0 million in the second quarter of fiscal 2023, an increase of $10.5 million, or 16.4%.

Current wording

Adjusted EBITDA increased to $59.8 million in the third quarter of fiscal 2024 from $51.1 million in the third quarter of fiscal 2023, an increase of $8.7 million, or 17.0%.

Previous wording

Net sales increased to $1.087 billion in the twenty-six weeks ended August 3, 2024 from $973.7 million in the twenty-six weeks ended July 29, 2023, an increase of $113.5 million, or 11.7%. The increase was the result of a non-comparable store sales increase of $70.7 million and an increase in comparable store sales of $42.8 million. The increase in non-comparable store sales was driven by new store unit growth.

Current wording

Net sales increased to $1.605 billion in the thirty-nine weeks ended November 2, 2024 from $1.454 billion in the thirty-nine weeks ended October 28, 2023, an increase of $151.0 million, or 10.4%. The increase was the result of a non-comparable store sales increase of $110.6 million and an increase in comparable store sales of $40.4 million. The increase in non-comparable store sales was driven by new store unit growth.

Previous wording

Comparable store sales increased 4.5% in the twenty-six weeks ended August 3, 2024 compared with a 6.3% increase in the twenty-six weeks ended July 29, 2023. The increase in comparable store sales primarily consisted of an increase in average transaction size and an increase in the number of transactions.

Current wording

Comparable store sales increased 2.8% in the thirty-nine weeks ended November 2, 2024 compared with a 6.5% increase in the thirty-nine weeks ended October 28, 2023. The increase in comparable store sales primarily consisted of an increase in basket and an increase in the number of transactions.

Previous wording

Gross profit increased to $428.4 million in the twenty-six weeks ended August 3, 2024 from $375.3 million in the twenty-six weeks ended July 29, 2023. Gross margin increased 90 basis points to 39.4% in the twenty-six weeks ended August 3, 2024 from 38.5% in the twenty-six weeks ended July 29, 2023. The increase in gross margin in the twenty-six weeks ended August 3, 2024 is primarily due to favorable supply chain costs as well as higher merchandise margins.

Current wording

Gross profit increased to $642.8 million in the thirty-nine weeks ended November 2, 2024 from $569.4 million in the thirty-nine weeks ended October 28, 2023. Gross margin increased 90 basis points to 40.1% in the thirty-nine weeks ended November 2, 2024 from 39.2% in the thirty-nine weeks ended October 28, 2023. The increase in gross margin in the thirty-nine weeks ended November 2, 2024 was primarily due to favorable supply chain costs as well as higher merchandise margins.

Previous wording

SG&A increased to $288.1 million in the twenty-six weeks ended August 3, 2024 from $264.9 million in the twenty-six weeks ended July 29, 2023, an increase of $23.2 million, or 8.8%, primarily driven by higher selling expenses related to new store openings. As a percentage of net sales, SG&A decreased 70 basis points to 26.5% in the twenty-six weeks ended August 3, 2024 from 27.2% in the twenty-six weeks ended July 29, 2023. The decrease was primarily the result of leverage of fixed expenses on the increase in comparable store sales and disciplined expense control.

Current wording

SG&A increased to $442.6 million in the thirty-nine weeks ended November 2, 2024 from $406.6 million in the thirty-nine weeks ended October 28, 2023, an increase of $36.0 million, or 8.9%, primarily driven by higher selling expenses related to new store openings. As a percentage of net sales, SG&A decreased 40 basis points to 27.6% in the thirty-nine weeks ended November 2, 2024 from 28.0% in the thirty-nine weeks ended October 28, 2023. The decrease was primarily the result of leverage of fixed expenses on the increase in comparable store sales and disciplined expense control.

Previous wording

Pre-opening expenses increased to $7.3 million in the twenty-six weeks ended August 3, 2024 from $6.2 million in the twenty-six weeks ended July 29, 2023 primarily due to the costs associated with the startup of the Company’s fourth distribution center in Princeton, IL as well as the comparative number of new stores. During the twenty-six weeks ended August 3, 2024, we opened 13 new stores. During the twenty-six weeks ended July 29, 2023, we opened 15 new stores and closed one store. As a percentage of net sales, pre-opening expenses increased 10 basis points to 0.7% in the twenty-six weeks ended August 3, 2024 from 0.6% in the twenty-six weeks ended July 29, 2023.

Current wording

Pre-opening expenses increased to $14.5 million in the thirty-nine weeks ended November 2, 2024 from $12.4 million in the thirty-nine weeks ended October 28, 2023 primarily due to the costs associated with the startup of the Company’s fourth distribution center in Princeton, IL as well as the comparative number of new stores. During the thirty-nine weeks ended November 2, 2024, we opened 37 new stores and closed three stores, two planned closures and one temporary closure related to Hurricane Helene. During the thirty-nine weeks ended October 28, 2023, we opened 38 new stores and closed one store. As a percentage of net sales, pre-opening expenses remained flat at 0.9% in the thirty-nine weeks ended November 2, 2024 and October 28, 2023, respectively.

Previous wording

Interest income, net increased to $8.2 million in the twenty-six weeks ended August 3, 2024 from $6.1 million in the twenty-six weeks ended July 29, 2023, primarily due to favorable interest rates and higher average cash and cash equivalent and short-term investments balances.

Current wording

Interest income, net increased to $12.3 million in the thirty-nine weeks ended November 2, 2024 from $10.1 million in the thirty-nine weeks ended October 28, 2023, primarily due to favorable interest rates and higher average cash and cash equivalent and short-term investments balances.

Previous wording

Income tax expense in the twenty-six weeks ended August 3, 2024 was $30.2 million compared to income tax expense of $24.0 million in the twenty-six weeks ended July 29, 2023. The effective tax rates for the twenty-six weeks ended August 3, 2024 and July 29, 2023 were 24.0% and 24.7%, respectively. The decrease in the effective tax rate in the twenty-six weeks ended August 3, 2024 was primarily due to an increase in discrete tax benefits related to stock-based compensation. Discrete tax benefits totaled $1.9 million in the twenty-six weeks ended August 3, 2024 compared to discrete tax benefits of $0.7 million in the twenty-six weeks ended July 29, 2023.

Current wording

Income tax expense in the thirty-nine weeks ended November 2, 2024 was $42.8 million compared to income tax expense of $35.2 million in the thirty-nine weeks ended October 28, 2023. The effective tax rates for the thirty-nine weeks ended November 2, 2024 and October 28, 2023 were 24.6% and 25.1%, respectively. The decrease in the effective tax rate in the thirty-nine weeks ended November 2, 2024 was primarily due to an increase in discrete tax benefits related to stock-based compensation. Discrete tax benefits totaled $2.2 million in the thirty-nine weeks ended November 2, 2024 compared to discrete tax benefits of $0.7 million in the thirty-nine weeks ended October 28, 2023.

Previous wording

As a result of the foregoing, net income increased to $95.3 million in the twenty-six weeks ended August 3, 2024 from $73.2 million in the twenty-six weeks ended July 29, 2023, an increase of $22.1 million or 30.3%.

Current wording

As a result of the foregoing, net income increased to $131.2 million in the thirty-nine weeks ended November 2, 2024 from $105.0 million in the thirty-nine weeks ended October 28, 2023, an increase of $26.2 million or 25.0%.

Previous wording

Adjusted EBITDA increased to $143.9 million in the twenty-six weeks ended August 3, 2024 from $113.4 million in the twenty-six weeks ended July 29, 2023, an increase of $30.5 million, or 26.8%.

Current wording

Adjusted EBITDA increased to $203.7 million in the thirty-nine weeks ended November 2, 2024 from $164.6 million in the thirty-nine weeks ended October 28, 2023, an increase of $39.1 million, or 23.8%.

Previous wording

Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility. Our primary cash needs are for capital expenditures and working capital. As of August 3, 2024, we had $89.0 million available to borrow under our Revolving Credit Facility and $353.1 million of cash and cash equivalents and short-term investments on hand. For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to Unaudited Condensed Consolidated Financial Statements.”

Current wording

Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility. Our primary cash needs are for capital expenditures and working capital. As of November 2, 2024, we had $92.1 million available to borrow under our Revolving Credit Facility and $303.9 million of cash and cash equivalents and short-term investments on hand. For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to Unaudited Condensed Consolidated Financial Statements.”

Previous wording

Our capital expenditures are primarily related to new store openings, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers, and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems. We spent $38.3 million and $26.2 million for capital expenditures during the second quarters of fiscal 2024 and fiscal 2023, respectively. For the twenty-six weeks ended August 3, 2024, we spent $65.2 million for capital expenditures compared to $45.2 million for the twenty-six weeks ended July 29, 2023. Included in capital expenditures in the thirteen and twenty-six weeks ended August 3, 2024, is approximately $14.6 million for the acquisition of ten former 99 Cents Only Store locations. Of the ten store locations, three of these are owned properties and seven are leased properties with favorable rent and leasing structures, located in key markets across Texas. With the acquisition, we expect our total capital expenditures to be approximately $104 million, which includes the $14.6 million purchase price and build out costs for the newly acquired locations.

Current wording

Our capital expenditures are primarily related to new store openings, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers, and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems. We spent $31.0 million and $36.1 million for capital expenditures during the third quarters of fiscal 2024 and fiscal 2023, respectively. For the thirty-nine weeks ended November 2, 2024, we spent $96.2 million for capital expenditures compared to $81.4 million for the thirty-nine weeks ended October 28, 2023. Included in capital expenditures in the thirty-nine weeks ended November 2, 2024, is approximately $15.8 million for the acquisition of ten former 99 Cents Only Store locations and fifteen former Big Lots store leases. Of the ten 99 Cents Only store locations, three of these are owned properties and seven are leased properties with favorable rent and leasing structures, located in key markets across Texas. With the acquisition, we expect our total capital expenditures to be approximately $104 million, which includes the $14.6 million purchase price and build out costs for the newly acquired locations.

Previous wording

We expect to fund capital expenditures from cash on hand generated from operations. We opened 13 new stores during the twenty-six weeks ended August 3, 2024, and we recently completed the construction of our Princeton, IL distribution center, which provides an additional 615,000 square feet of distribution capacity. We expect to open approximately 50 stores during fiscal 2024. We also expect to invest in store-level initiatives at our existing stores, and general corporate capital expenditures, including information technology. We have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects.

Current wording

We expect to fund capital expenditures from cash on hand generated from operations. We opened 37 new stores and closed three stores, two closures where the Company chose not to renew the leases and one temporary closure related to Hurricane Helene, during the thirty-nine weeks ended November 2, 2024, and we recently completed the construction of our Princeton, IL distribution center, which provides an additional 615,000 square feet of distribution capacity. We expect to open approximately 50 stores during fiscal 2024. We also expect to invest in store-level initiatives at our existing stores, and general corporate capital expenditures, including information technology. We have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects.

Previous wording

During the twenty-six weeks ended August 3, 2024, we repurchased 418,274 shares of our common stock for $31.4 million, inclusive of transaction costs, pursuant to our share repurchase program. During the twenty-six weeks ended July 29, 2023, we repurchased 492,280 shares of our common stock for $29.0 million inclusive of transaction costs, pursuant to our share repurchase program. These expenditures were funded by cash generated from operations. As of August 3, 2024, we had $54.2 million remaining under our share repurchase authorization. There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any repurchases.

Current wording

During the thirty-nine weeks ended November 2, 2024, we repurchased 587,633 shares of our common stock for $47.3 million, inclusive of transaction costs, pursuant to our share repurchase program. During the thirty-nine weeks ended October 28, 2023, we repurchased 634,733 shares of our common stock for $39.8 million inclusive of transaction costs, pursuant to our share repurchase program. These expenditures were funded by cash generated from operations. As of November 2, 2024, we had $38.4 million remaining under our share repurchase authorization. There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any repurchases.

Previous wording

Net cash provided by operating activities was $84.1 million for the twenty-six weeks ended August 3, 2024 as compared to $109.8 million for the twenty-six weeks ended July 29, 2023. The decrease in net cash provided by operating activities for the twenty-six weeks ended August 3, 2024 was primarily due to changes in working capital, most notably the timing of inventory receipts and payments, including tax payments, partially offset by higher net income year over year.

Current wording

Net cash provided by operating activities was $79.7 million for the thirty-nine weeks ended November 2, 2024 as compared to $110.9 million for the thirty-nine weeks ended October 28, 2023. The decrease in net cash provided by operating activities for the thirty-nine weeks ended November 2, 2024 was primarily due to changes in working capital, most notably the timing of inventory receipts and payments, including tax payments, partially offset by higher net income year over year.

Previous wording

Net cash used in investing activities was $159.4 million for the twenty-six weeks ended August 3, 2024 as compared to $113.6 million for the twenty-six weeks ended July 29, 2023. The increase in cash used in investing activities is primarily due to an increase in capital expenditures in the current year related to the completion of the Company’s fourth distribution center in Princeton, IL and the acquisition of ten former 99 Cents Only Store locations, in addition to increased net investment of short-term investments twenty-six weeks ended August 3, 2024 as compared to the twenty-six weeks ended July 29, 2023.

Current wording

Net cash used in investing activities was $183.4 million for the thirty-nine weeks ended November 2, 2024 as compared to $125.3 million for the thirty-nine weeks ended October 28, 2023. The increase in cash used in investing activities is primarily due to an increase in capital expenditures in the current year related to the completion of the Company’s fourth distribution center in Princeton, IL, the acquisition of ten former 99 Cents Only Store locations and the acquisition of 15 former Big Lots store leases, in addition to increased net investment of short-term investments thirty-nine weeks ended November 2, 2024 as compared to the thirty-nine weeks ended October 28, 2023.

Previous wording

Net cash used in financing activities was $20.3 million for the twenty-six weeks ended August 3, 2024 as compared to $25.4 million for the twenty-six weeks ended July 29, 2023. The decrease was primarily due to an increase in the repurchase of common stock, partially offset by an increase in proceeds from stock option exercises in the twenty-six weeks ended August 3, 2024 as compared to the twenty-six weeks ended July 29, 2023.

Current wording

Net cash used in financing activities was $33.8 million for the thirty-nine weeks ended November 2, 2024 as compared to $36.6 million for the thirty-nine weeks ended October 28, 2023. The decrease was primarily due to an increase in the repurchase of common stock, partially offset by an increase in proceeds from stock option exercises in the thirty-nine weeks ended November 2, 2024 as compared to the thirty-nine weeks ended October 28, 2023.