Ollie's Bargain Outlet Q1 Earnings Call Highlights

Key Points

• Q1 results topped expectations with net sales up 14% to $659 million, comparable-store sales rising 1.7%, and adjusted EPS increasing 21% to $0.91. Gross margin also improved 80 basis points to 41.9% as lower supply chain costs helped offset higher fuel expenses.
• Management said weather volatility and higher gas prices pressured traffic and weaker seasonal categories like lawn and garden and summer furniture, especially in the South. Consumers are shopping closer to need, with lower-income shoppers more affected by trip consolidation.
• Ollie’s raised its full-year earnings outlook while slightly trimming sales guidance, and it still plans to open 75 stores this year. The company ended the quarter with $526 million in cash, no meaningful long-term debt, and increased its share repurchase plan to $125 million.

Ollie's Bargain Outlet NASDAQ: OLLI reported first-quarter fiscal 2026 results that management said reflected solid sales growth, stronger margins and disciplined expense control, even as weather volatility and higher fuel prices weighed on some regions and categories.

President and Chief Executive Officer Eric Vander Veen said the closeout retailer delivered “strong earnings growth” despite a challenging consumer backdrop. He said sales and traffic were strong early in the quarter, but trends diverged as the period progressed, with unseasonable weather and surging fuel prices pressuring categories such as lawn and garden and summer furniture.

“With our stores being located in more rural and suburban areas, we also think the rapid spike in gas prices led to some trip consolidation which impacted traffic,” Vander Veen said.

First-quarter sales rise 14%

Executive Vice President and Chief Financial Officer Robert Helm said net sales increased 14% to $659 million, driven by new store openings and comparable-store sales growth. Comparable-store sales rose 1.7%, driven primarily by higher basket size. Traffic was positive but only slightly so, which Helm said reflected the impact of trip consolidation.

Top-performing categories included food, general merchandise, hardware, seasonal decor and stationery. Weather-sensitive categories, including lawn and garden and summer furniture, underperformed.

Helm said performance varied meaningfully by region. The East, Midwest and Central markets outperformed their plans by 100 to 200 basis points, while the South lagged by 100 to 300 basis points, with lawn and garden the largest drag. Slower sales of bulky seasonal products also created throughput constraints at the company’s Texas distribution center, affecting the southern region.

Gross margin rose 80 basis points to 41.9%, ahead of company expectations, helped by lower supply chain costs. Helm said higher fuel costs were more than offset by lower tariff expenses, while merchandise margin was slightly higher.

Adjusted net income increased 21% to $56 million, and adjusted earnings per share rose to $0.91. Adjusted EBITDA increased 22% to $88 million, with adjusted EBITDA margin up 80 basis points to 13.3%.

Consumer pressure shifts shopping patterns

Management said consumers are increasingly shopping closer to need, particularly lower-income shoppers affected by higher gas prices and longer drives to stores. Vander Veen said Ollie’s saw stronger trade-down activity among higher-income customers, which he defined as households earning more than $100,000, but also an acceleration in lower-income customers trading out.

“Customers bought what they needed, very close to need,” Vander Veen said during the question-and-answer session. He added that consumables remained very strong, while nonessential purchases, including weather-related seasonal items, were deferred.

Vander Veen said the company has seen “green shoots” when weather conditions improve for several days in specific regions, including stronger traffic and recovery in seasonal categories. Helm said second-quarter comparable sales are currently running below the company’s full-year comparable-store sales target, largely due to continued weather volatility and pressure on lower-income consumers, but the company believes second-quarter comps could look similar to the first quarter.

Store growth and loyalty program remain priorities

Ollie’s opened 27 new stores in the first quarter and ended the period with 672 stores in 35 states. The company reiterated its plan to open 75 stores this year, including its first store in Minnesota, and said it is expanding rapidly in the Midwest.

Management also highlighted continued growth in the Ollie’s Army loyalty program, which Vander Veen said accounts for more than 80% of company sales. Helm said Ollie’s added nearly 500,000 net new members during the quarter, bringing the program to 17.5 million members, up 13% from a year earlier.

The company plans several loyalty events in the second quarter, including Ollie’s Army Night and Ollie’s Army Days. Vander Veen said the company is working to make those events more compelling and to use digital marketing channels to drive urgency around relevant products.

Merchandising and supply chain investments continue

Vander Veen said Ollie’s continues to use data and a test-and-learn process to improve sales productivity across the store. Seasonal decor remained one of the company’s top categories despite the headwind of an early Easter.

The company also reduced its wall-to-wall carpet offering and replaced the space with living room furniture. Vander Veen said the added furniture assortment improved sales productivity by more than 100% in the same floor space. During the Q&A, he said Ollie’s is no longer putting wall-to-wall carpet in new stores, with furniture being added in most new locations.

Ollie’s is also reviewing downtrending categories such as books and flooring. Vander Veen said the company remains committed to both businesses but is evaluating how to rightsize and reposition them.

On supply chain, the company completed a warehouse execution system replacement at its Texas distribution center, the final facility in the network to receive the upgrade. Vander Veen said the Texas distribution center expansion remains on schedule for completion early in the third quarter, and the company plans to begin expanding its Illinois distribution center later this year. Together, those projects are expected to increase network capacity to more than 850 stores.

Guidance updated as earnings outlook rises

Ollie’s updated its full-year outlook, lowering its sales range slightly to reflect current trends while raising its earnings outlook following the first-quarter performance. The company now expects:

• 75 new store openings;
• Net sales of $2.98 billion to $3.00 billion;
• Comparable-store sales growth of about 2%;
• Gross margin of about 40.7%;
• Operating income of $340 million to $348 million;
• Adjusted net income of $271 million to $277 million;
• Adjusted earnings per share of $4.45 to $4.55.

The outlook assumes higher fuel costs for the rest of the year and does not include any benefit from potential tariff refunds. Helm said the company benefited from lower tariff levels tied to a SCOTUS decision and assumes those remain in place through July, while the second half of the year reflects higher pre-SCOTUS tariff assumptions.

Ollie’s ended the quarter with $526 million in cash and investments and no meaningful long-term debt. The company repurchased $53 million of its common stock in the quarter and raised its planned buyback level for the year to $125 million, which Helm said is roughly 50% of free cash flow.

Vander Veen said the company’s closeout deal flow remains strong as consumer pressure and retail consolidation create opportunities. “Simply put, we continue to see an increase in both the quantity and the quality of the deals,” he said.

About Ollie's Bargain Outlet NASDAQ: OLLI

Ollie's Bargain Outlet is an American discount retailer specializing in closeout merchandise and surplus inventory across a broad range of categories. The company operates a no-frills retail format that offers branded and private-label products at significant markdowns. Its merchandise mix typically includes housewares, electronics, health and beauty items, food products, beauty supplies, books, toys, and seasonal goods.

Founded in 1982 by Oliver E. “Ollie” Rosenberg, the company is headquartered in Harrisburg, Pennsylvania.

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