Ollie's Bargain Outlet (OLLI) 5 Jun 182018 Q1 Earnings call transcript

Company Profile

Participants

Mark Butler	Chairman, President and CEO
John Swygert	EVP and COO
Jay Stasz	SVP and CFO
John Rouleau	IR
Matthew Boss	JP Morgan
Dan Binder	Jefferies
Peter Keith	Piper Jaffray
Scott Ciccarelli	RBC Capital Markets
Rick Nelson	Stephens
Judah Frommer	Credit Suisse
Chris Prykull	Goldman Sachs
Elizabeth Suzuki	Bank of America Merrill Lynch
Vincent Sinisi	Morgan Stanley
Edward Kelly	Wells Fargo
Patrick McKeever	MKM Partners

Call transcript

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Operator

Good afternoon and welcome to the Ollie’s Bargain Outlet Conference Call to Discuss Financial Results for the First Quarter of Fiscal 2018. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. Please be advised that the reproduction of this call in whole or in part is not permitted without written authorization from Ollie’s. And as a reminder, this call is being recorded.

Stasz, from Officer; Mark President John Operating and today and Chairman, and call and Officer; Executive President Chief Swygert, Jay the management Officer. Butler, are President, Chief Chief On Financial Vice Senior Executive Vice over I’ll Investor Relations, John to turn to Rouleau, started. get the call Please go sir. ahead,

John Rouleau

Investor today’s of press found Thank results afternoon, this call was A the section that release first but results be be release Relations copy items, can press and of the Litigation Company’s contain including call. may that and you, limited want not everybody. year quarter the the Company’s on expectations, predictions, issued our that remind outlook and including covering forward-looking for to this hello, Securities of management’s website. could fiscal or financial of and a should from XXXX XXXX. actual on materially remarks the performance, I fiscal our future everybody estimates, within meaning Private on Act Any statements, differ XXXX considered such to mentioned statements forward-looking Reform those

reports to to quarterly should in our and or any place future factors. filings, You these review including detailed you may Form Factors SEC these our Form description as obligation of them our reliance a encourage XX-K forward-looking revise more be not report these We control and in today, that not and XX-Q, on are affect filings. of annual on new no for discussed on undertake information speak future results which for we statements, undue or might only events. undertake

the investors measures income, that I’ll such operating EBITDA, that financial to net release. comparable per of Reconciliations and referring adjusted may way, in to certain to assess EBITDA, share -- on call this today, Mark. net most are be financial to as over measures measures out earnings to And believe important diluted call will non-GAAP of GAAP adjusted with income be turn the these adjusted we non-GAAP performance. included financial our We closely metrics our

Mark Butler

And hello us very on XXXX. strong us for solid joining last and Strong giving on start We John. building a and store Thanks, consecutive Thanks deal our to our Comparable to sales momentum had increase a in year call. new flow on sales a everyone. performance from another top quarter basis. drove quarter, stack our increase two of XX% X.X% increased positive XXth a and X.X% store comps. year of on today

departments positive. was Our comping sales broad-based again strength over once our of half with

were operating income. net margin XX% a automotive. Some improvement and furniture, our tight best basis-point in expense sales and margin categories housewares, Strong seasonal and increase in a drove performing of combined the with XXX controls adjusted

continue XXXX are are believe to in very pleased underlying beyond. trends and we well-positioned We deliver in results we and strong business with our the to

many remains that a years growth deals, Army. base, our the clearly strategy bargain on success and key idea on XX based leveraging Ollie’s these ago almost proved store Our centered growing and years expanding founded Ollie’s everybody three drivers, We our offering over and loves and great that.

important more merchandise. increasing ever access better to visible size makes gain as to and us to continue manufacturers Our we major

brand we more able our they reduced to these what of at are relationships, grow we offer want, drastically As direct customers merchandised prices. name

the two opened our first our continued the quarter eight teams. great in quarter, new during execution expectations the in Our Arkansas. locations perform first We by above to from stores our stores benefiting including

since We quarter end. have one opened additional store

with XX growth right including location scheduled next for our to openings in year, stores between expectations. in open long-term XXnd We track Louisiana, week have line grand our remain We our and state. three first on XX this

in both opportunities our prospects markets. We for leasing excited are and we have of stores and a strong additional about existing pipeline new

for Bargain with Ollie’s runway now better growth. to Army tremendous ever. expand growth to bigger outpace is almost in over The the across potential and a country. than store store Battalion the with our to XXX have continuing levels our X.X locations base We strong membership growth million

spend the Army more and significantly now our XX% than around Importantly, members’ makes average non-members is of up sales.

about are initiatives As rolling key out we Army. some for talked before, we the

are We the for rewards will launch on to the to communicate allow deals. track Ollie’s it mobile This latest their in the app quarter. greatest make and easy to us target app second and members

will improvements ranks and rewards reward program one, Bargainauts. see loyalty out receive or members of relationships different lasting to two spending. the build their We generals Ollie’s of level where will and surprise based are three-star on become designed also with Army roll These and Army offers the our

wrap it up. to So,

marks of our our We on all industry. the in hit continue presence we growing and remain laser-focused to closeout

quarter the really results first were and I quarter. to about Our good start strong, feel second the

we momentum of we’re a We Believe and see lot not have lots of opportunity slowing down. ahead. me,

tight consistency of take success store bargains, day. to for the successful more members X,XXX detail. our their and your support the control It’s to over call runway moment I’ll that their Thank driven financial gives Ollie’s. you new strength continued now you outlook each appreciate expense to that team reinforce the Our model the efforts is of results and through of business work, much thank and hard how and of like us. have again I’d this us dedication their our and openings. Jay XXXX take I really long to turn a every for great our ahead in confidence by we to

Jay Stasz

Thanks, Mark. good And everyone. afternoon,

of quarter. store The delivered by Comparable X.X average increased We’re increase quarter a on in Net our million. a two-year X.X% by store was with quarter in on in basis. sales the very offset sales transactions. X.X XX.X% pleased increased XXXX and stack first we increase increase partially last basket, top solid strong to start reduction as $XXX.X increase to of driven in comp sales an another

the base XX.X% our year-over-year. ending during quarter, period said, Mark with stores an in we states, As XX the XXX of store stores in opened increase eight

in which continued quarter our Gross XX million in EBITDA benefit this $X.XX base. and excludes in both Adjusted stores and $XX $XXX.X our XX.X%. of margin increase loss $XX.X to the profit remain of margin $X.XX XX.X% adjusted expectations by share or to per and driven and quarter as operating per tax across for points existing the markets, related million XX an $XX to the perform we leveraged to store sales. extinguishment XXX to increased productivity expenses income in of was net increased new primarily margin increased XX.X% to very to increase well increased partially million to The Operating entire million increased to expenses and above increased per gross from increased to after-tax the income base in with new offset sales $XX.X basis on XX.X% pleased prior new points gross Our basis income million of share by to cost our higher additional merchandise of increased and points first diluted diluted percentage increased debt, selling XX.X% net by and net XX.X% income result XX.X%. margin share $X.XX diluted supply XX.X% investments the remaining benefits XX to $X.XX. expenses $XX basis excess Adjusted to basis to chain points year. Net net is Included XX.X% million, in EBITDA stock-based SG&A of increased SG&A support growth. $X.XX We store from to sales. the stores, volume our margin continued as $XX.X million personnel a XX.X%. compensation. XX.X% as in increased or the

in period, prior the and $X store had at XX.X% period in expenditures quarter borrowings loan we the deal the were end quarter during to prior in to timing Turning of At the compared million million the $XX.X revolving ended under we continued end We in total no primarily the store the down the debt to first the cash year, year paid and balance invest sheet. and credit increased $XX in new Inventory quarter million new $XX.X of Capital borrowings million growth. first as growth million. flow. the facility. of due to of the with our term $X.X over outstanding

fiscal updated Turning XXXX. to outlook our for

and the in quarters the first our guidance upside the quarter leaving full raising sales remaining for earnings are We to unchanged. account and year

such now for income per excludes debt, net to million sales sales outstanding of growth and to to adjusted the the excess million $XX $X.XXX benefits one of store which to $XXX of stock-based million, million, $XXX compensation, which and comparable $X.XX expect adjusted billion, tax the diluted diluted of we total of rate income exclude of an net of benefits year, million, XX X% $X.XXX million. As XX relocation, income of to capital average of $XXX opening $X.XX, new billion to loss compensation tax X%, net stores shares on to to share million of $XXX XX%, operating of related expenditures excess XX also and weighted $XX related and stock-based the effective tax after-tax both to extinguishment

increase Operator? of mentioned the will are increase at and end call, call last the sales now low in our session. total second on we a as forecasting I the addition, over the back to the store a operator our the In to guidance. to Q&A we for X% start comp X% quarter, low sales digits turn double

Operator

Boss Morgan. [Operator line Instructions] of Matthew Our first the question comes from of JP

is line Your open.

Matthew Boss

Mark. Thanks,

garden cadence anything be in between loyalty monthly So, in I the color be lift of seasonal the taking would first be you could if May on as in will shift first second can helpful. helpful Any to quarter? the have trends launch terms the lawn and would finally, some embedded second and the I any place the that then, what color that think, you weather in you And saw quarter. of of speak quarter? trends from in know

Jay Stasz

embed Jay on that. and we Matt, to lift with loyalty. with Yes. first, last with And start this can didn’t is really your I anything the the start question Stasz,

for in nothing bake that. we So,

We are we and going crawl very to conservative walk then we run. like are and said

during the Easter plan got we it a the on. was the the speak shift the within to funny right and in cadence We months. sales I grow with holiday we shifts as as the line quarter. our went the year, throughout don’t stronger line ad the as mean, for we XX-week of But month. our were a quarter They did because quarter, month comp see the specific had with to shift quarter comp right the well back we some of by terms in guidance of In quarter. were

was So, get it course stronger. pretty over the of did comp progressively those months, the lumpy. But,

Mark Butler

the asked Yes, choppiness the weather had our overall will like Matt. are to on quarter. basis, progression of an we generally be the else. about certainly, now. the everybody expecting certainly I on we stores And the don’t in And chime on we weather. focus But

going We’re to in be states. XX

are west in and the all up way, Coast down on we’re the one the store. East Mississippi We of the side

we major, So, we don’t and as that and up think line. any right major that and expected did well down had the impact

Matthew Boss

it. about best to second quarter of up how a quarter. in versus How Got margin. much the supply the think just And on follow-up the gross margin costs And in as was the half chain about merchandise guess, year? margin I higher then, think merchandise opportunity we back

Jay Stasz

Sure, were points. The Matt. XX costs up supply and margin basis basis quarter which merchandise points is offset in up by was was about the that Jay. XX increased the by This chain

and are haven’t that’s So, we about margin gross year. as really talked you We our XX.X% call had know, target annual this the on still targeting. what changed last we

with So, we got having we that we are good merchandise side we’re a also increased strong margin. chain supply going margin. to increase expecting that. But to And in that merchandise think costs to offset be margin knew XX chain And we to focus to going and expect bps we’ve continue. that was be performance. improved Certainly QX to on anticipated are we’ve that up the able supply a merchandise is start

Gross again, So, XX.X. at overall. we’re flat at looking is margin margin year-over-year

Operator

you. Thank

Our next comes question from Jefferies. of Dan the Binder of line

open. line Your is

Dan Binder

a source in been work of any thoughts the on slight management? did question, was of Binder. that noted price And just proposition all curious the you the you’ve then, With And side. sort better any Matt’s simply question change the way just Dan is I attack was that result? just was to or better decline. merchandise given question. the around second around as doing the I a good to buying margin, value Two-part It’s buying regard on transactions? first think, Hi.

Mark Butler

I case think it’s both. as Dan, mix that a it was Yes. bit obviously little the of

to some we that to never leverage to what those of quite change. really we As try going the and I buying We said give situations. to to And has environment do continues to paramount bargain. vibrant, be able were up any able the and and That’s going I’m were leverage America margin bit plate able we increase and get where to you possible. to them. situation were which to some greater of little deals a And the step about not of to tell that when is

part go. boys second of the the On I’ll the question, let

Jay Stasz

I Dan, comp was Sure. X.X, the talk can basis to basket about points. XXX the was that. average

to sales that tickets. we was an driven down Obviously manage about in try Mark to those byproduct to of we something we XXX deals the I the comp that’s higher about, It’s furniture, transactions, basis going try the average, a not And the any and metrics talked housewares, points. before, average the So, mix and quarter. manage were are at by departments top given said don’t have that to. with mean Really, business look those to those metrics. like

that the So, we’re surprised And with of again, quarters XX happy driver. that we’re the positive consecutive was pretty not comp.

on versus but focused of those more the metrics understand deal some need talk those. We’re through to we

Operator

Thank you.

Peter next Jaffray. question comes Keith Our Piper of from

question please? Your

Peter Keith

in in Hey. with strong. weather. know newer new it our I new a like shift were blame some guys. it’s to there due to I if The But metrics bit. least wondering quite of not And quite Good that Refreshing And productivity store looks ticked at don’t reporting and the your up have was company afternoon, stores. is to if store model, anything the week sales.

Jay Stasz

we is But, of to basis. it’s XX back even the this the on there tailwind the little the shift the shifted is productivity certainly the shift calc, at still And in weeks way and week, north because bit performing calc on Peter, a store a Jay. new of sales of it. Yes. least XXX,

John Swygert

thing QX. of see kind expect One, to And the one in of you’ll we’ve And of of in in new in to mind, overall on see those call today. as the that. keeping we sales bit and headwinds John, total stores earlier have well just that end Peter, kind as that’s little this a lower is alluded why what we spectrum to add probably the

Peter Keith

maybe and always curious little opportunities around trending. give just good. might whole of business food us shaping I’m consumables Okay, broken very how But some then, are know And the separately. and that a color as bit how a there I consumables isn’t the be up? out on of

Mark Butler

buying the Yes. opportunities very, We be strong. very to find

expectations. Our time major, continues some pleased strong. with very we our position the it. moment doing And We’ve are at quite of is very, major very been for Coffee it’s a to perform and piece at our business. it

our Peter. So, about, the the everything offerings, our I margin, availability, level, the buying, the feel good inventory, stock

John Swygert

continues as the Peter, deflationary on That to be And food this with. marketplace definitely just that prior. Yes. very coffee color dealing we little There’s John, on category. a a pressures is more sitting are k-cups alluded the competitive to we’ve

overall the in pressures some having food definitely category. are we So,

where We’re holding our at. own, we’re we’re comfortable with

Jay Stasz

has this consistent late. and little really couple in It’s like of XX, bit quarters. of The penetration overall whole about, north the as a changed lot Peter, is we’ve of consumables stayed Jay. talked of last hasn’t a And

Peter Keith

John, Okay. And Very follow-up deflationary Is manage can pressures strategy? may or good. your food beyond with that. category that your a you pricing through just on coffee guys there in be

John Swygert

and little very categories, that in coffee through I with that’s The to can many headwind we to we is we too here a but think can think manage is have manage stay. very think through There I definitely that very, I issues. that. Peter, specific deal without

Operator

you. Thank

Ciccarelli of Our Capital Scott Markets. question next RBC comes from

Your question, please?

Scott Ciccarelli

when typically, up historically? to on see point to the new have not that the What guys and productivity. has different mathematically a you of NSP why actually as way reasons, comps angle, mean, really it Peter��s, bit would metric you that’s we’ve sort it guess picked little a what slide, I key would NSP higher trend has? I seen than slide but store I of the follow-up to guys. Hi, just yet continues has

John Swygert

think John, is this. I first take I the of Scott, this will -- slice

what in to in at comp, past, against productivity up you look our against regards seen and the number. our store last be strong if going lot the four a over years, continue we nature of the that’s deal-driven with over which, the comp to increasing we’ve own to new comps we’re So,

numbers increased the as substantially have average So, per basis on a store well.

us name, I and think, that stronger brands on to a what to I the are in attracting the these attachment the are And see. I to and [ph] people we the had think carrying markets visibility in basis past. that’s the we than they continue new think

Scott Ciccarelli

of the on terms by is many all And than so more any other being done? repurposing estate of there shift in have abandoned estate with guys you what real kind historically just real retailers, going

John Swygert

bit, say, I a there wouldn’t I say but significantly would little is more.

cases certain for We’ve bit much been capitalize model. stores. pretty better to getting real sites true some overall, estate. bit a has a little been sites, in little our are Hhgregg better able been which We on and real estate typically But our the of to some tried we’ve of

our really stepped pretty we part comfort estate for real of haven’t consistent. normal We are spot the -- strategies outside most our and remain

Operator

you. Thank

of from next of the Stephens. comes Our Rick question Nelson line

is line open. Your

Rick Nelson

that So, of your Can stores, their might to your more little traffic sales. a and macro impact retailers to you better seeing business better buys? that overall the little backdrop, speak and are how quality

Mark Butler

Well, I think, twofold. Rick,

feel equation there are opportunity And -- the that in to we both greater are new business seeing money that of about us on feel certainly we new the We of we pockets. a that them at. new we when sell or if product on more think we vibrancy, and more product with there is though obsolescence where with think perhaps I their good win We customer a bargains. as creation create creates down obsolescence. gives sides or sides is we that think product win both goes that

So, an there to offer, money, buying anytime increase is that’s make disruption really in a too. direct anytime by them the the that’s or a customer deals. deals we how opportunity When get bigger, and has better, we the to manufacturer And can we good more broader brighter, have is living customer. from business, selling

and So, we had about great we’re really we’re quarter. it’s good We a -- at performing. where feel how

Rick Nelson

merchandise might there seeing what Speaking the of you maybe could store too? available be toy if that and opportunistic of to sites speak buys, for you’re terms in holiday category, availability

Mark Butler

toys, are we the on Toys"R"Us certainly the about excited Well, opportunity.

in We’re active the market.

We’re opportunities the buying a themselves. been many for toy certainly many, many, when And this We’ve present in living. the years. what do business we is for

to really, So, to a that. to but is able we be expectations. I that toys. us my going we feel to there think be sell demand be able just really demand buy And is think good we’re to for within to And going there be toys, also a fine doing about

As are while marketplace many takes sites able And this the to a some far as situation we as we whole itself possibly in can. advantage bit little for instances, to we best it expecting as take come instances, be -- get to actively have opportunities In always of out. the as sites to well. trying do real hopefully locations, those estate up; flush we’re be the to in are of we able the

John Swygert

on is we’re Rick. there. on work our we’ll not about we a lot area taking of work. handful don’t the regards And that doesn’t June them doesn’t handful sites -- are where at little into auction pretty situation, With or XXth. will fit a we’re look But currency peak going locations we’re we presence. or attention box us most of there the a a them, here be real of that is on Let and the have a right there a think geographic Toys"R"Us focusing to add on And location at estate, of taking taking the that size the them of at for heavily look we’re of pay XXX the me a to north color out a that

Operator

comes Suisse. next Our of Thank question line of Credit you. Instructions] Judah the from [Operator Frommer

is line open. Your

Judah Frommer

Maybe follow-up estate. Hi, guys. just the a for the first Thanks real taking question. on

that previously, the that think what’s give And the the us any I that said I of still if first you a in stores Is you’d going year store? third case? color relocation about can on, half. open in guidance, on this would think with

Mark Butler

two Pennsylvania that comfortable believe still that as with since previously that it the to issues have of we’ve about to in was cadence to of It in regards we’re the to It’s here, stores our opportunistic the there. to from went second cadence call. of this changed. perspective Hhgregg third our might that and in be street are XX There to or half happens At that with and back first some right thirds up Judah, that our need time, store without the be that the any happens across two the half. obviously issues the well. With can a ever first timing maneuver we point store not has to the an right half Sure. we guidance week discussed But which There business the came out deal a or was we we’ve here opened. XX-store slip the situation think here literally year from a in we discuss. relocation, that last backyard.

feet going we’re a that about it, So, box, larger look away it. XX and to about probably excited we’re to brighter, newer to relocate store

So, it’s right here our in backyard.

be good thing will it So, to do. a

Judah Frommer

historically you’ve more the able and you guys little in the comp given mean know beyond and I have on don’t -- said guys next change much Has process? internal public. it basically buying been a has comp anything your high level, one release, are been there called or to clearly availability? that current have you the the you’re And planning but changed the -- since said, do any coming you visibility out to you John I comping quarter,

John Swygert

it when buy, how next how seasonally a you, for market Judah, the for and or market I and go this long John. is of to really of be process we of overall whether season, season period has time. the in we process very go changed nothing tell out to our we would very,

So, see quarter visibility the after of same. the present It’s the feel themselves and we we remains deals momentum model, really continue quarter. we do what the can strong scalability the and about very to

would our change planning in market anything go or we not we process how So, to either.

Operator

you. Thank

next Our comes Chris Goldman from question the Prykull line of Sachs. of

open. is line Your

Chris Prykull

How are you position table? capital because allocation of growth, of thinking would a Any share now color structure cash helpful. given like your buyback it about you’ve net to there’s the the swung looks capital, be you potentially accelerate store on

Jay Stasz

can Jay guys these Yes. But allocation this terms in our is changed really yes, might Chris, we and and I strategy. capital of start chime in. anything haven’t

going aim means the a do that be of going end what we down first, debt so we of And pay debt that later this then, to said, the or the to million in and year. are so, position year. pay cash you back to so have And $XX step another to like probably is down, at our is we’re

are going We options. to assess our

going do are from been accelerate something We standpoint. think this to years. thing That’s the pace out for we of to many, we do. right and Mark business growth. that’s have the churning team And don’t not many growth

Board late We the an the ‘XX, when more ‘XX, the at would to an were open advisors we to look that. But look to acquisition sense, keep would viable those they our the or buybacks are answer about options down are cash before is look at some if we and are But buyback. the we looking We economics we going -- is, opportunistic typically we’re made talk the might using not to going for road at do buy time short to of and our and lease like we’ve going we look right. going at like that. we talked at would anything with and are

Chris Prykull

Great. the like? rollouts the on look was any Army. you’d guidance show or Have look across retail at I changes program. to opportunity app That’s lift then to you to there said loyalty just Ollie’s either or the might what program mobile mobile for real And past restaurants embedded know within helpful. done revamps app no the work a or question potential

John Swygert

Chris, The Army. do our we reality necessarily That’s this that currently sales how things. no, from the XX% and But, John. the have come style is answer not Ollie’s is, of is, our not. on

of see where we’ve shattering from Army back, front when told to So, really already you the everyone let’s results on expectations to any We it expect you’re done the don’t or from the always consumers. digital kind goes. sit anything just the driving change XX%, haven’t

There continue everyone, think their do to that necessarily visits customer. the can is be overall going to something to the let on we’re year. each way nice a we stay ourselves. told a get to to addition And the a every the process we the the app hope customers model comp us, don’t that not trying the need So, to we’re embed is the incremental And now, do. we’ll if same based change right higher right view We run think always we ranks driver. the But and more, getting with get more. of can But no as we is drive and that��s business. us that way sales from The ranks from the drive Army. as business. ahead We we’ve plan we

it, will the were see the to and deliver. we changes do we able we’ve shareholders that we bottom if the get put in results from So, made the line more

Chris Prykull

price there in. apparel to opportunity if to I off Great, players certain appreciate sneak packaways degree one one And do? high leverage level greater Is any of it color. could last categories an the in the like some

Mark Butler

talking buying you of season, about out Are Chris?

Chris Prykull

Yes.

Mark Butler

for have day day, Yes. all that long and We do every XX years.

buying geographically had northeast. conditioners August buy stores we or of I in So, I the pool same then the air chemicals amounts. end when We September would at only be would when perhaps have the

what of to all manufacturer. most referred deal the we’ve buy Because be time us as to opportune packaways just season get we to and ago out moments the best So, time. the for the the meaningful most that’s

Chris Prykull

season of over is percentage out of sense or that generally time? looked has Any how what for inventory total, the and what as a packaway

Jay Stasz

basis. on distribution of Yes. year barometer. XX%, in about seasonal But the of at. we’re the the based sits this of changes Chris, XX% at we time that use probably overall inventory seasonal on the kind centers a the point looking given in time, It’s any

Operator

you. Thank

the of Lynch. America next comes Suzuki Merrill question from of of line Elizabeth Bank Our

Your line open. is

Elizabeth Suzuki

Great. Thank you.

Were that or your back on question. a Just any it being earnings impact the quarter to a half the opportunities comps of do follow-up on extent Rick’s that the in selling the you or horizon on had for Toys"R"Us inventory first of the most year? you see measurable

Mark Butler

certainly -- what happened what surprise toy with Toys"R"Us, no Yes, to came as the industry. we had

So, it and we do. going impact sold side. will And it’s and And both you toys. notable. year have out. toys certainly, This know we been we is last just the to don’t a it anything win, to how this the hardware that for that last no selling a do procurement and shake want year. whatsoever thing But, last had might year, first might the living. entire would not housewares we this what lot is we of toys what be There have We be and on to win it’s remind quarter, this been a we year, was think

excited coffee rates been be or just like to think going happen Ray on perhaps we Sunbeam might it maker. be So, to We the is Rachael about it. excited they have about customer

Elizabeth Suzuki

had SG&A SG&A the versus the of XX year? in deleverage on that looks we like was it XX last were your expecting first this you just given Are I had regarding the the at to my expecting beat side notes. And still thanks. investments. what that you points I fact think basis least? Great, a And about quarter, in point

Jay Stasz

we from strong this quarter And XX the may the deleveraging good say. expecting We reinvestment quarter yes, exceeded good in yes, that that of a XX SG&A Certainly the front. investment is the of second that a little We modeled bit got is remember performance SG&A we’re I’d a a Elizabeth, benefit sales the have of did be a the overall had. that But had given we function year-over-year. to points, related And first to Jay. on have forward. about we’ve a decrease basis-point embedded in tax that still basis

Operator

Thank you.

the of Morgan next Sinisi Vincent from comes question Stanley. Our line of

is open. line Your

Vincent Sinisi

in costs, a be bit Just have or with that that said going today just for Would there? of the the sight kind for more thoughts freight core outlook the of in line know what sense seeing that in year, you any kind And this of your of you chain are may is that with supply is may the to given you you your say a expectations? then, be little I specifically flexibility embedded for of freight costs. rest higher nature line what

John Swygert

in right is be line Yes. This headwinds continued to don’t planned. the With regards part headwinds our John. with We costs expect expectations. the quarter, first much significant supply the pretty in the year. remaining we were overall have chain to And do any of

-- in present merch on baked come challenge order fuel at continuing got sufficient we numbers order a continues the now We’ve are XX% year-over-year. today, up for if full in supply right XX.X% on we margin margin. a offset to the that to chain it’s pretty us always gross could in we’ve year to increased still in said, goes So, more where think the But basis. XX% at the or than pressures

get that last year. to the they of But you as later in year the year. in were see part start lessen I obviously latter we think the will increasing them

moderate changes. continue good see remainder any so in to of domestic should the of and import So, the We to us but on we get we that pretty year. side the front, we expect now able big that business, the shape towards are you QX, right QX significantly be barring should think

Vincent Sinisi

just follow-up. maybe one then, And

rollout app XQ, and of the the the for Army. ranks mobile the For

past the end be said in think, and would I you that done by XQ. start would XQ, in

rollout still during something quarter? for just we So, the is and a those at should that flip case across that all kind like how the both think of of things that or base on about the quickly, is that once

John Swygert

now, in part are of by the out Vincent, we QX. looking their Right app rolled the pretty Yes. mobile the ranks much the QX, at very end to of be entirety and early

of more traction. the getting So, be testing we part app here at mobile actual doing latter some looking be we’d QX, will

just to and at in working today here it. and applications. have rollout X,XXX-X,XXX to in geographic July about here July with of a that ready it off and the going we’re Soft it testing a launch people do that are bugs the using go later prior we’re ranks, of on month end The of they’ll the those both

early it being when both they’ll think will I So, used and consumers. by in and be QX be running up

Mark Butler

excited I the be up us Don’t Stick really mobile letting more exciting; me. of to be is deals ahead this with tip more am. than going -- But in it’s Mark. sense about just the than Nobody me. is got app It’s everybody stick comps. me. really, we Hey, a nobody get is wound with know going people on Vince, to with

Operator

you. Thank

Kelly comes next of question Wells from Our the line of Edward Fargo.

Your is open. line

Edward Kelly

is positive week. new a trying number QX. there in there store calendar Was just better My I on the just QX? through productivity in was coming I first am shift to the any that’s know question understand in model. shift

So, the taking I am just something got forward what number, wondering there? or and we’ve here is that going just we be there unusual extrapolating NSP should

Jay Stasz

QX QX the This to mean function was and there total is being certainly, a is sales end shifting in -- back shift lower and at I’ll the higher talked year. QX. the of QX start. I about of XX-week and Jay And that and we calendar

mean, is do when number a basis. from my So, I shifted XXX store there new in productivity on something that math, is QX. I about impact certainly rough the my an or

we I been exceeding If running. we from probably basis, how XXX, XXX%. been the we about closer that’s we’ve exceeding year, to running. we’ve And been XXX you to it’s it the been as to what That’s think plan away but of I we’ve all than -- go haven’t -- higher Last north normalized to that’s historically -- the just reported we back as how it. of XXX. XXX. on low think been about haven’t were We reported business business. think I the planned apples-for-apples shift mid-XXs that But what mean we an closer exceeding north of moving that’s

Edward Kelly

ask traffic your two fastest and growing has driver. wanted about Great. That’s far been then, health by category Clearly, beauty question just aids. to a helpful. years. over the I And it’s a last been This

just quarter. stand the category you in You this about didn’t in performance you where in terms mention the of could hoping I’m category talk adding expected of XXXX? assortment,

John Swygert

is new a hadn’t We access a HBA, And it any past. that we to lot performer of This as of the is regard Yes. obviously in us. had to With last year for strong real -- product had HBA John. part business, deal-driven. our was

still our fine. in move and out we all to just top but positive categories the compared performing It’s So, is one of year of time. comping wasn’t HBA five. last just

HBA in items -- our categories direction. move to was last expect again. and to introduced against new number and forward we year a good right But we’re So, continue new up own now the new we

and guidance that kind the continued in So leveled has just to move off right direction.

a wrong nothing is basis. means, positive we’re there with that something seeing there any and on So, it’s it sitting by annualized it but

it. excited about we’re So,

Mark Butler

bigger continues and CPGs are to to meaningful get availability offerings from our the better, just And consumer. really these The main that really, stronger. and brands are

consumer. have at, product in we’re selling where excited and the rate it’s the the about we’re excited about we to that the store really we’re So,

Edward Kelly

just one one you. last for And Mark,

we there of function to next ask as out loyalty, there a It about -- you’re So, we’re things that. years the of years, thinking is overall like seeing always is consumables the last also a about, going pretty in about if a think role are obviously the of lot that next a really driver seemed, few you’re of just the today big or terms played it driver. of other traffic, that. couple And Is we that traffic then, think cycling about? the K-cups, HBA,

Jay Stasz

right, with Jay mean, we we have can start I measure This have certainly, -- we traffic is counter. don’t I that. traffic, don’t and don’t

So, use if go comps strong, ‘XX mean, spot guide. back, numbers. look transaction mean, we strong by and the that quarter. as strong first we those and And you’re in had and transaction are especially look we I I and at a on. ‘XX

coming we’re that. So against no is there up doubt,

Mark Butler

it think now. years we’ve three And Yes. been that nearly for I has as our increasing -- public

overall we’re at, goes Company and up, additional just of visibility the the we’re centers in And the throughout both the persona more in offerings. as ourselves we the geographic make and locations country. distribution and bigger to available getting So, take that more general

us. centers open the same we think for when happen. we will for when eventually we before, distribution Commerce, the southeast opened And third talked we’ve more as many distribution center, Georgia of So, the that for CPGs and our thing made viable them

quietly. we’re and We or these and a and high strengthening So, product headaches with relationships a make and we’re all just maintaining of can lot a marks, can developing of CPGs. sell lot operating take their have at go and it very of level we we hitting we the away operating product, that

Operator

Thank you.

Our MKM next Partners. McKeever from of of line Patrick question comes the

Your line is open.

Patrick McKeever

of a things And and Just the you across a benefits good a bit question where I are those seeing employees. store we pressure redirecting of fair wages portion labor some on of are and retail. tax and know for savings

for year. for and it’s in early the release to like or the additional trends but that would second think and the turnover, any there sales X% also recent question of guidance, you’ve in about for is then guidance X% guidance in might manager embedded enough reaffirmation on that’s the quarter the the what low of comments So year? turnover changes things indicate is, same-store area seen range positive it’s to pressure even beyond my understand more So, quarter. end that just And my do first you reconcile some trying reaffirmation the press into have employee the just second question with that the you the the store I the question. be the the

but with the your especially quarter. more is on So, guiding for that the function know well a year spinner of I is second the the X% toward in the as quarter, the more comparisons -- last that comparison second fidget difficult

be So would any helpful. color around just that

John Swygert

let Jay Patrick, I comp piece, Yes. the I take labor take John. this the will store is sales piece. will

And to I last attract turnover business. not we So, the to of the reduce there year it’s deal since work and in new regards and reinvestment and the seen than so pressures It’s a we has mentioned guess, dealing warehouse we function and but are savings and we’re more several overall something tight order in labor on. in we with part labor and in anywhere that, that we people of else to been to accordingly last tax That’s that -- need continue the continue we’ve our it’s have market have workers boxes. centers distribution with labor, the of for material with increased. adjusting calls, those real. the

that dollars benefit on We employees world that them some for benefit July and we’ve put of in the work for really And the tax in hourly level, workers. the for then changes the at base. invested part savings effective the be the Xst importantly, be reinvestment aside would that on the are employee set of will the most have store made side side dollars some for

talked what Our in turnover the management not, has our teams have past. consistent as or very we remained

on front. turnover are We increase not the an seeing in management the

hourly that workers set macro level. be on adjust to at would to overall dollars So, react or situation a an we to aside store been the have issues have may basis market-by-market any the

seen in a fair we already work pressures We today. believe there significant have it We provide in. the ways not markets

the employees. good importantly for discount We environment, have a a have a package we good work employee benefits and most nice

flow why And address have With continue regards it that right. we it, adjust bottom we point think don’t and coming. react is we let into use flow use shareholders. it’s that monitor line. basis use have everyone But the the trying you. we’ll it this I’ll won’t time a to at the to comps, Jay need very in if we with we’re to. back don’t when That’s serious and we’ll So -- time to to accordingly. on We’ll to we If

Jay Stasz

second X And comps, in as mean to always outlook. the to of you’re on. the know, did you on Patrick, quarter. conservative X We our I kind going of remain reaffirm for Yes. we’re that spot

You said of your to of had just two-point bit a south which against last year, big own success there, coming that right, comp. spinners in a our numbers. And we’re was own up point, the our QX victim little on impact

way we’ve deal strong year want QX in to it’s getting that we in comp business, spinners. last We business the nature right of plan appropriate. make the the sure got to So, the and think the that the

registers to a do than in but Of better that. can off we’ve that’s of go -- got long not we if the course quarter. we’re thing up going far, to good start shut way the a to But we’re kind so the

Patrick McKeever

Did the the quarter last spinners have year? gross margin material impact on in

Jay Stasz

No, did they not.

Operator

to like you. time, closing any Thank turn I’d the At this over Sir? call Mark for to remarks. Butler

Mark Butler

profitable our our and by you second of and ability We to Ollie’s. start good September. and for a call in in have sales year continue with our our and forward day. growth. quarter early Thank driving encouraged current the our call you We look Thanks to confident are feel support and on Okay. your to everyone sharing great results results participating about our in trends

Operator

Thank gentlemen. you participation your you, This And wonderful you, and day. conference. for sir. have ladies and today’s concludes a Thank thank

disconnect may time. this You at

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