Ollie's Bargain Outlet Holdings, Inc.

Previous wording

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Previous wording

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and related notes of Ollie’s Bargain Outlet Holdings, Inc. included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 26, 2025 (“Annual Report”). As used in this Quarterly Report on Form 10-Q, except where the context otherwise requires or where otherwise indicated, the terms “Ollie’s,” the “Company,” “we,” “our,” and “us” refer to Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries.

Current wording

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and related notes of Ollie’s Bargain Outlet Holdings, Inc. included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025, filed on March 26, 2025, as amended by Amendment No. 1 to the Annual Report on Form 10-K for the fiscal year ended February 1, 2025, filed on April 11, 2025 (as amended, the “Annual Report”) with the Securities and Exchange Commission, or SEC. As used in this Quarterly Report on Form 10-Q, except where the context otherwise requires or where otherwise indicated, the terms “Ollie’s,” the “Company,” “we,” “our,” and “us” refer to Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries.

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 “2025” refer to the 52-week period of February 2, 2025 to January 31, 2026. References to “2024” refer to the 52-week period of February 4, 2024 to February 1, 2025. References to the “first quarter of fiscal 2025” and the “first quarter of fiscal 2024” refer to the thirteen weeks of February 2, 2025 to May 3, 2025 and February 4, 2024 to May 4, 2024, 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 calendar year. References to “2025” refer to the 52-week period of February 2, 2025 to January 31, 2026. References to “2024” refer to the 52-week period of February 4, 2024 to February 1, 2025. References to the “second quarter of fiscal 2025” and the “second quarter of fiscal 2024” refer to the thirteen weeks of May 4, 2025 to August 2, 2025 and May 5, 2024 to August 3, 2024, respectively. Year-to-date periods ended August 2, 2025 and August 3, 2024 refer to the twenty-six weeks of February 2, 2025 to August 2, 2025 and February 4, 2024 to August 3, 2024, 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

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects,” and similar references to future periods, prospects, financial performance, and industry outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, capital market conditions, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including, but not limited to, supply chain challenges, legislation, national trade policy, and the following: our failure to adequately procure and manage our inventory, anticipate consumer demand, or achieve favorable product margins; changes in consumer confidence and spending; risks associated with our status as a “brick and mortar” only retailer; risks associated with intense competition; our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all; fluctuations in comparable store sales and results of operations, including on a quarterly basis; factors such as inflation, cost increases and energy prices; the risks associated with doing business with international manufacturers and suppliers including, but not limited to, potential increases in tariffs on imported goods; our inability to operate our stores due to civil unrest and related protests or disturbances; our failure to properly hire and to retain key personnel and other qualified personnel; changes in market levels of wages; risks associated with cybersecurity events, and the timely and effective deployment, protection, and defense of computer networks and other electronic systems, including e-mail; our inability to obtain favorable lease terms for our properties; the failure to timely acquire, develop, open and operate, or the loss of, disruption or interruption in the operations of, any of our centralized distribution centers; risks associated with our lack of operations in the growing online retail marketplace; risks associated with litigation, the expense of defense, and potential for adverse outcomes; our inability to successfully develop or implement our marketing, advertising, and promotional efforts; the seasonal nature of our business; risks associated with natural disasters, whether or not…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects,” and similar references to future periods, prospects, financial performance, and industry outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, capital market conditions, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market, and regulatory conditions, including, but not limited to, supply chain challenges, legislation, national trade policy, and the following: our failure to adequately procure and manage our inventory, anticipate consumer demand, or achieve favorable product margins; changes in consumer confidence and spending; risks associated with our status as a “brick and mortar” only retailer; risks associated with intense competition; our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all; fluctuations in comparable store sales and results of operations, including on a quarterly basis; factors such as inflation, cost increases, and energy prices; the risks associated with doing business with international manufacturers and suppliers including, but not limited to, potential increases or changes in tariffs on imported goods; our inability to operate our stores due to civil unrest and related protests or disturbances; our failure to properly hire and to retain key personnel and other qualified personnel; changes in market levels of wages; risks associated with cybersecurity events, and the timely and effective deployment, protection, and defense of computer networks and other electronic systems, including e-mail; our inability to obtain favorable lease terms for our properties; the failure to timely acquire, develop, open and operate, or the loss of, disruption or interruption in the operations of, any of our centralized distribution centers; risks associated with our lack of operations in the growing online retail marketplace; risks associated with litigation, the expense of defense, and potential for adverse outcomes; our inability to successfully develop or implement our marketing, advertising, and promotional efforts; the seasonal nature of our business; risks associated with natural disasters, …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Since the founding of Ollie’s in 1982, our principal growth strategy has been the opening of new stores. Historically, we have expanded our store base by opening new stores organically. More recently, we also have opportunistically expanded our store base through acquiring former store locations of distressed or bankrupt retailers through the bankruptcy auction or similar process. Our growth strategy continuously evaluates the best opportunities in the marketplace and combines organic new store openings with the acquisition of store locations through alternative means. We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner. As of May 3, 2025 we have grown to 584 stores in 32 states.

Current wording

Since the founding of Ollie’s in 1982, our principal growth strategy has been the opening of new stores. Historically, we have expanded our store base by opening new stores organically. More recently, we also have opportunistically expanded our store base through acquiring former store locations of distressed or bankrupt retailers through the bankruptcy auction or similar process. Our growth strategy continuously evaluates the best opportunities in the marketplace and combines organic new store openings with the acquisition of store locations through alternative means. We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner. As of August 2, 2025, we operated 613 retail stores in 34 states.

Previous wording

While we are focused on driving comparable store sales and managing our expenses, our revenue and profitability growth will primarily come from opening new stores. The core elements of our business model are procuring great deals, offering extreme values to our customers, and creating consistent, predictable store growth and margins. In addition, our new stores generally open strong, immediately contributing to the growth in net sales and profitability of our business. We plan to achieve continued net sales growth, including comparable stores sales, by adding stores to our store base and by continuing to provide quality merchandise at a value for our customers as we scale and gain more access to purchase directly from major manufacturers. We also plan to leverage and expand our Ollie’s Army database marketing strategies. In addition, we plan to continue to manage our selling, general, and administrative expenses (“SG&A”) by continuing to make process improvements and by maintaining our standard policy of reviewing our operating costs.

Current wording

While we are focused on driving comparable store sales and managing our expenses, our revenue and profitability growth will primarily come from opening new stores. The core elements of our business model are procuring great deals, offering extreme values to our customers, and creating consistent, predictable store growth and margins. In addition, our new stores generally open strong, immediately contributing to the growth in net sales and profitability of our business. We plan to achieve continued net sales growth, including comparable stores sales, by adding stores to our store base and by continuing to provide quality merchandise at a value for our customers as we scale and gain more access to purchase directly from major manufacturers. We also plan to leverage and expand our Ollie’s Army database marketing strategies. In addition, we plan to continue to manage our selling, general, and administrative expenses (“SG&A”) by continuing to make process improvements and by maintaining our standard policy of leveraging our fixed costs.

Previous wording

SG&A is comprised of payroll and benefits for store, field support, and support center associates. SG&A also includes marketing and advertising expense, occupancy costs for stores and the store support center, insurance, corporate infrastructure, and other general expenses. The components of our SG&A remain relatively consistent per store and for each new store opening. The components of our SG&A may not be comparable to the components of similar measures of other retailers. Consolidated SG&A generally increase as we grow our store base and as our net sales increase. A significant portion of our expenses are primarily fixed in nature, and we expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales. We expect that our SG&A will continue to increase in future periods with future growth.

Current wording

SG&A expenses are comprised of payroll and benefits for store, field support, and support center associates. SG&A also includes marketing and advertising expense, occupancy costs for stores and the store support center, insurance, corporate infrastructure, and other general expenses. The components of our SG&A remain relatively consistent per store and for each new store opening. The components of our SG&A may not be comparable to the components of similar measures of other retailers. Consolidated SG&A generally increases as we grow our store base and as our net sales increase. A significant portion of our expenses are primarily fixed in nature, and we expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales. We expect that our SG&A will continue to increase in future periods with future growth.

Previous wording

We derived the condensed consolidated statements of income for the first quarter of fiscal 2025 and the first quarter of fiscal 2024 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 twenty-six weeks ended August 2, 2025 and August 3, 2024 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 $576.8 million in the first quarter of fiscal 2025 from $508.8 million in the first quarter of fiscal 2024, an increase of $67.9 million, or 13.4%. The increase in net sales was the result of new store unit growth in addition to a comparable store sales increase of 2.6%.

Current wording

Net sales increased 17.5% to $679.6 million in the second quarter of fiscal 2025 from $578.4 million in the second quarter of fiscal 2024. The increase in net sales was driven primarily by new store unit growth and an increase in comparable store sales.

Previous wording

Comparable store sales increased 2.6% in the first quarter of fiscal 2025 compared with a 3.0% increase in the first quarter of fiscal 2024. The increase in comparable store sales was driven by an increase in the number of transactions.

Current wording

Comparable store sales increased 5.0% in the second quarter of fiscal 2025 compared with a 5.8% increase in the second quarter of fiscal 2024. The increase in comparable store sales was driven primarily by an increase in the number of transactions.

Previous wording

SG&A increased to $164.8 million in the first quarter of fiscal 2025 from $142.4 million in the first quarter of fiscal 2024, an increase of $22.4 million, or 15.7%, primarily driven by higher selling expenses related to new store growth. As a percentage of net sales, SG&A increased to 28.6% in the first quarter of fiscal 2025 compared to 28.0% in the first quarter of fiscal 2024 driven primarily by higher medical and casualty claims.

Current wording

SG&A expenses increased 20.5% to $175.5 million in the second quarter of fiscal 2025 from $145.7 million in the second quarter of fiscal 2024. As a percentage of net sales, SG&A expenses increased 60 basis points to 25.8% in the second quarter of fiscal 2025 from 25.2% in the second quarter of fiscal 2024. The increase in SG&A expenses as a percentage of net sales was primarily driven by higher medical and casualty claims, as well as slightly higher store labor expenses.

Previous wording

Pre-opening expenses increased to $6.7 million in the first quarter of fiscal 2025 from $2.7 million in the first quarter of fiscal 2024 primarily driven by new store growth and $1.8 million of dark rent associated with the bankruptcy acquired stores. We opened 25 new stores in the first quarter of fiscal 2025 and opened 4 new stores in the first quarter of fiscal 2024. As a percentage of net sales, pre-opening expenses increased to 1.2% in the first quarter of fiscal 2025 compared to 0.5% in the first quarter of fiscal 2024.

Current wording

Pre-opening expenses increased 95.3% to $9.0 million in the second quarter of fiscal 2025 from $4.6 million in the second quarter of fiscal 2024. The increase in pre-opening expenses was primarily driven by new store growth and dark rent of $2.3 million associated with the bankruptcy acquired stores. We opened 29 stores in the second quarter of fiscal 2025 compared to 9 stores in the second quarter of fiscal 2024. Of the 29 store openings, 22 were bankruptcy acquired leases that carried higher levels of dark rent.

Previous wording

Net interest income was $4.8 million in the first quarter of fiscal 2025 compared with net interest income of $4.3 million in the first quarter of fiscal 2024. The increase in interest income in the first quarter of fiscal 2025 is primarily due to higher average cash and cash equivalent and investments balances compared to the first quarter of fiscal 2024.

Current wording

Interest income, net was $4.5 million in the second quarter of fiscal 2025 compared with net interest income of $3.9 million in the second quarter of fiscal 2024. The increase in interest income in the second quarter of fiscal 2025 is primarily due to higher average cash and cash equivalent and investments balances compared to the second quarter of fiscal 2024.

Previous wording

Income tax expense decreased to $13.4 million in the first quarter of fiscal 2025 compared to $14.5 million in the first quarter of fiscal 2024. The effective tax rates for the first quarters of fiscal 2025 and fiscal 2024 were 22.0% and 23.8%, respectively. The decrease in the effective tax rate in the first quarter of fiscal 2025 was primarily due to an increase in excess tax benefits related to stock-based compensation. Discrete tax benefits totaled $2.3 million in the first quarter of fiscal 2025 compared to discrete tax benefits of $1.1 million in the first quarter of fiscal 2024.

Current wording

Income tax expense increased to $20.2 million in the second quarter of fiscal 2025 compared to $15.7 million in the second quarter of fiscal 2024. The effective tax rates for the second quarters of fiscal 2025 and fiscal 2024 were 24.8% and 24.3%, respectively. The change in the effective tax rate was driven by the impact of higher non-deductible compensation as well as lower discrete items recognized, primarily excess tax benefits related to stock-based compensation.

Previous wording

As a result of the foregoing, net income increased to $47.6 million in the first quarter of fiscal 2025 from $46.3 million in the first quarter of fiscal 2024, an increase of $1.2 million or 2.6%.

Current wording

As a result of the foregoing, net income increased to $61.3 million in the second quarter of fiscal 2025 from $49.0 million in the second quarter of fiscal 2024, an increase of $12.3 million or 25.2%.

Previous wording

Adjusted EBITDA increased to $72.2 million in the first quarter of fiscal 2025 from $69.4 million in the first quarter of fiscal 2024, an increase of $2.7 million, or 3.9%.

Current wording

Adjusted EBITDA increased to $93.8 million in the second quarter of fiscal 2025 from $74.5 million in the second quarter of fiscal 2024, an increase of $19.3 million, or 26.0%.

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 May 3, 2025, we had $91.9 million available to borrow under our Revolving Credit Facility, $369.5 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 August 2, 2025, we had $90.4 million available to borrow under our Revolving Credit Facility and $317.1 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.”

Previous wording

Our capital expenditures are primarily related to new store openings, lease acquisitions and related build-out costs, 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 $26.7 million and $26.9 million for capital expenditures during the first quarters of fiscal 2025 and fiscal 2024, respectively. We opened 25 new stores during the first quarter of fiscal 2025.

Current wording

Our capital expenditures are primarily related to new store openings, lease acquisitions and related build-out costs, 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 $26.4 million and $38.3 million for capital expenditures during the second quarters of fiscal 2025 and fiscal 2024, respectively. For the twenty-six weeks ended August 2, 2025, we spent $53.2 million for capital expenditures compared to $65.2 million for the twenty-six weeks ended August 3, 2024. We opened 29 stores during the second quarter of fiscal 2025.

Previous wording

Capital expenditures in 2025 are planned to be approximately $83 to $88 million, primarily for the opening of 75 new stores, store-level initiatives at our existing stores, as well as 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

Capital expenditures in 2025 are planned to be approximately $83 to $88 million, primarily for the opening of 85 stores, store-level initiatives at our existing stores, as well as 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

Between December 15, 2020, and November 30, 2023, the Company’s Board of Directors approved and authorized the repurchase of up to $400.0 million of shares of the Company’s common stock through three separate approvals, set to expire March 31, 2026. On March 19, 2025, the Company’s Board of Directors approved a new share repurchase authorization of an additional $300.0 million of the Company’s outstanding common stock, effective through March 31, 2029. The shares to be repurchased may be purchased from time to time in open market conditions (including blocks), privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, issuer self-tender offers or any combination of the foregoing. The timing of repurchases and the actual amount purchased will depend on a variety of factors, including the market price of our shares, general market, economic and business conditions, and other corporate considerations. Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow us to purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Repurchases are expected to be funded from cash on hand or through the utilization of our Revolving Credit Facility. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by our Board of Directors at any time.

Current wording

Between December 15, 2020, and November 30, 2023, our Board of Directors approved and authorized the repurchase of up to $400.0 million of shares of our common stock through three separate approvals, set to expire March 31, 2026. On March 19, 2025, our Board of Directors approved a new share repurchase authorization of an additional $300.0 million of our outstanding common stock, effective through March 31, 2029. The shares to be repurchased may be purchased from time to time in open market conditions (including blocks), privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, issuer self-tender offers or any combination of the foregoing. The timing of repurchases and the actual amount purchased will depend on a variety of factors, including the market price of our shares, general market, economic and business conditions, and other corporate considerations. Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow us to purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Repurchases are expected to be funded from cash on hand or through the utilization of our Revolving Credit Facility. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by our Board of Directors at any time.

Previous wording

During the first quarter of fiscal 2025, we repurchased 159,757 shares of our common stock for $17.1 million, inclusive of transaction costs, pursuant to our share repurchase program. During the first quarter of fiscal 2024, we repurchased 336,934 shares of our common stock for $25.0 million. These expenditures were funded by cash generated from operations. As of May 3, 2025, we had $315.5 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 twenty-six weeks ended August 2, 2025, we repurchased 257,434 shares of our common stock for $28.6 million, inclusive of transaction costs, pursuant to our share repurchase program. 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. These expenditures were funded by cash generated from operations. As of August 2, 2025, we had $304.0 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 in the first quarter of fiscal 2025 was $28.7 million as compared to net cash provided by operating activities of $40.2 million in the first quarter of fiscal 2024. The decrease in net cash provided by operating activities in the first quarter of fiscal 2025 was primarily due to changes in working capital, most notably the timing of merchandise payments, partially offset by higher net income year over year.

Current wording

Net cash provided by operating activities was $109.4 million for the twenty-six weeks ended August 2, 2025 as compared to net cash provided by operating activities of $84.1 million for the twenty-six weeks ended August 3, 2024. The increase in net cash provided by operating activities for the twenty-six weeks ended August 2, 2025 was primarily due to an increase in net income year over year, partially offset by changes in working capital, most notably the timing of merchandise payments.

Previous wording

Net cash used in investing activities in the first quarters of fiscal 2025 and fiscal 2024 was $18.3 million and $68.5 million, respectively. The decrease in cash used in investing activities is primarily due to reduced net investment of investments in the first quarter of fiscal 2025 as compared to the first quarter of fiscal 2024. In the first quarter of fiscal 2025 purchases of investments were $119.0 million offset with maturities of investments of $127.4 million. In the first quarter of fiscal 2024, purchases of short-term investments were $96.0 million offset with maturities of short-term investments of $54.3 million.

Current wording

Net cash used in investing activities for the twenty-six weeks ended August 2, 2025 and August 3, 2024 was $58.0 million and $159.4 million, respectively. The decrease in cash used in investing activities is primarily due to an increase in maturities of investment securities, in addition to a decrease in capital expenditures. For the twenty-six weeks ended August 2, 2025, purchases of investments were $232.1 million offset with maturities of investments of $227.2 million. For the twenty-six weeks ended August 3, 2024, purchases of investments were $230.7 million offset with maturities of investments of $136.2 million.