OLLI - Earnings call transcript Q1 2019 | Ollie's Bargain Outlet Holdings, Inc.

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Operator

Good afternoon and welcome to Ollie’s Bargain Outlet Conference Call to discuss financial results for the First Quarter of Fiscal 2019. 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 reproduction of this call in whole or in part is not permitted without written authorization from Ollie’s.

As a remainder, 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

call ma'am. I ahead, Fontana, Investor Please to Relations, will over Jean get to turn started. the go

Jean Fontana

Thank you,. everyone. Good afternoon,

found Relations press covering the that results of afternoon this issued copy website. release Company's of financial Investor A and release press in the Company's be can was section first quarter the a XXXX

XXXX the want management’s from I performance, materially including remarks statements this call and that considered predictions, to forward-looking mentioned limited of of expectations, Reform and differ meaning be future including not could today’s those on Any fiscal such statements, should forward-looking on actual within remind everyone call. Private results XXXX. items, Act estimates or that may but to Securities the Litigation for our outlook contain

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

closely important investors our income release. GAAP financial diluted as financial included adjusted to may non-GAAP measures believe measures financial and share most are We such that measures operating our comparable of EBITDA, call adjusted certain we will in income, be non-GAAP to Reconciliations the assess earnings to today's referring adjusted these to performance. per net net on be

over the to Mark. said, I call turn will that With

Mark Butler

sales top our joining deal to outstanding everyone. this expectations. Thanks, first strong Thanks start with Jean, call with increase comparable bottom for our year new another our our off Strong comps stack today. comp and in drove top hello, store and a positive XXth an exceeding line. line top was X.X% quarter We're and results increase consecutive increase performance flow of a of sales store This quarter X.X%. on of two-year growth XX%

We our broad merchandise half with our across based strength categories over of comping departments saw positive.

we included than electronics new our categories sales performing best floor impacted Tough beauty many it. toys. weather seasonal Our business, and were and but in markets to crushed health as able deliver aids, of stores our our better line coverings, top

and our we always business beat. another earnings delivered successfully As results and controlled strong

XXXX balance our amazing strategies, As expanding base, leveraging of growing remain and our focused and we look deals, we to of offering key execution army. Ollie's the on the store

Our has for our success now proven almost track of offering record years. driven good stuff XX cheap

from amazing our you resonate vendors. Our continue tell I'll customers. And and to seeking clearly existing bargain deals get incredible deals with new we

we as the on disruption scale never relationships. key better, and our landscape vendor capitalize to ability in to continue has Our been the leverage retail growing

we continued This get, for stores. bigger will more absolutely even the The support to us to even opportunities fuel more great the our land deals the be greater for growth.

the busy. expectations New demonstrating model. strength of again the further been stores once above our performed our quarter, in We've

former stores "R" Toys this locations. far year we've including opened XX Us So XX

XX with line the XXXX to in stores algorithm. Ollie's growth driver opportunities footprint be stores the to to continue successful to expand we in XX our our a as on new existing and We target long-term stores markets. in new see expect new with great significant We're to of open growth

states. have two enter these reached with will and Oklahoma to we additions XX Massachusetts to and mark new states; planning the We're halfway

network move we our tripling investments than construction infrastructure. our our store made We've DC. XXX investing distribution our we're toward the significant of in in to our stores base goal including nationwide, more of As third

are We on budget.

on first of and the operational quarter are to during be XXXX. schedule We expect

will stores. three new the to capacity we with distribution centers DC over serve total have With XXX

We grow The year-over-year. XX% our of Battalion active members Ollie's over are continuing now is to our as expand members, retail loyal nearly we Army million presence. base increase Bargain X.X

mind army Our mobile XXXX both the designed members us program enhancements, new top and members. ranks to attract Army to were of the app with keep current and Ollie's

straightforward keep Our Army initiative, of and every reward the goal the tremendous coming with remains them loyalty back.

and profitable and coupled will almost is and new Our hard cheap We've over do their with continue store and sticking are we're tight and the than it. organization buying driven philosophy with expense like their got members selling business us the dedication. working XXXX has so. experience that here that our to Ollie's model successful I'd cheap It's ever. openings the team center support thank control our for makes and store of work centers, combined and harder years grown who for commitment XX everyone in This stores, their distribution and the to

with So XXXX I to it good and strong we to up, feel wrap about the are our very pleased business. start

me. X% Our comp Stick our including to long-term guidance has algorithm, not X% annual with changed.

and to our overall in stronger driving ever ability like the new the in for support are pleased I'd continue growth Our of the year business. very thank we're We're and confident you Ollie's. stores with trends and your future. profitable into sales to this opportunities than the and

call the through our to more I'll turn you now financial take XXXX the to Jay and detail. results in over outlook

Jay Stasz

adjusted share, and pleased very estimates. expenses afternoon growth, another in resulting $X.XX $X.XX of with management per topline margin, good and great EPS tightly Mark delivered Thanks diluted of the of effective We're controlled quarter consensus strong gross to ahead have everyone.

by million. offset a partially store by in Net transactions. comp our decrease sales of sales store The X.X% comps. in increased positive increase an XX.X% resulting average consecutive was to $XXX.X sales XXth Comparable in quarter increased in increase driven basket

quarter, within our managing elements but throughout delivered see control As we some strong Mark related we did mentioned, by results. weather headwinds the

During XX.X% of year-over-year. in we ending states, with XXX the in opened an XX new store quarter count XX stores stores increase

perform above Our our our and and pleased new of we store productivity continue markets are stores across both base. very existing new entire with expectations the to

Gross gross with and million costs chain to flat last settlement. selling XX.X% SG&A net a reported in margin expenses was gain result primarily profit to our the at included of and our $XXX.X existing SG&A expenses XX.X% insurance increased supply $XXX,XXX from margin year. increased for from prior sales as additional a the million of and of as percentage stores new consistent to store base. merchandise quarter year $XX.X the the volume sales an were increased XX.X% both as

Excluding this basis XX.X% of points gain net we leveraged SG&A expenses by sales. XX to

to year points eight basis store last Preopening expenses million year. $X.X quarter compared of XX.X% openings to stores million. Operating opened XX We first to new the deleveraged timing and and income $XX.X to the number increased increased this stores year-over-year. XXX due in

increased the Excluding adjusted of points preopening and gain from the to XX of $XX.X operating the deleveraging XX.X% settlement, XX.X% decreased to margin expenses. basis income insurance adjusted as operating million a result

our year the tax income $X.XX. settlement and which had the in increased and $X.XX. is $XX.X At benefit last increased first Net and we $X.XX $X.XX stock-based after-tax to loss revolving benefits benefits this income adjusted share debt to the income from first related to of increased in excludes on credit quarter XX.X% of extinguishment cash under quarter net borrowings the Included income per increased quarter year share Adjusted diluted million. net $XX.X no $XX.X the increased end to EBITDA compensation. the and the per the these in to XX.X% the insurance to XX.X% facility. diluted million of XX.X% Adjusted net in and gain million $XX.X million XX.X% outstanding from

million or we conditions As facility for total commitments of subject for providing previously agreement revolving capacity recently amended $XXX announced, five-year additional million $XXX an incremental term loan of a million. our certain credit revolver and borrowing to our credit $XXX

XX completed also that to last sale-leaseback the Us locations pursuant were million. Toys store approximately We sold “R” acquired for we the year former $XX recently which transaction

increased increased year million quarter prior the our due year and new investments third period at of quarter in center, over distribution compared XX.X% growth Capital the timing primarily the expenditures prior the $XX.X in $X.X Inventory stores due of and deal to to flow. new to end maintenance the in store to the million capital.

Turning reflect quarter our to to guidance first full we year raising our outlook are results.

a we strong, deal the quarter believe we business we in year. and While are strong operate the plan very we was first remain we in given lapping driven environment how prudent a that

increase XX%. said last to maintain unit quarter, our store in and As comp X% net our income are which we to growth line long-term drives adjusted with approximately growth target X% annual sales of plans

XX.X% income stores of no $X.XX, benefits to the the which to of million We $X.XXX million and X%, net both of of from now the million, of $X.XXX of settlement. income of to insurance of $X.XX the adjusted sales store to at $XXX range, of midpoint compensation operating to billion, with relocations related $XXX increase sales $XXX comparable the income adjusted and to million diluted net $XXX per adjusted growth after-tax to share XX exclude tax billion the expect closures, XX net new stock-based gain or X% opening an planned total

of additional A to modeling. your in you couple help points

we the of in which point of quarterly back anticipate want change the to year. store up an XX the The XX.X%, and our We no XX% front the remains pick to XX we in full compared cadence half our year back basis new half. year approximate margin XX% in decrease XQ to prior is there will the approximately gross in to While forecast our of half clarify guidance. openings

were the resulting the million $X.X be of $XX in million million QX expected our in spent incurred in approximately to during $X.X expenses year. preopening remainder of

XX% of incur expenses QX. and We to in QX, the approximately XX% QX XX% in preopening remaining in expect

new new outlook center the million same $XX build and Texas in CapEx of to in stores. driven million the and out $XX our construction at and Our existing investments distribution remains by

now back session. start I'll to call the Q&A to operator the over Operator? the turn

Operator

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

please? question Your

Matthew Boss

in your year? exceeded on plan Mark, maybe any and tougher comping May versus by on internal comparisons [ph] the your the of what quarter, just category, comments remainder in first the for the confidence [tap] missed

Mark Butler

isn’t well last up, very, for covering, big three floor electronics performers this year. were a us but we that get very Matt, to so mover doesn't very everybody toys quarter, wound well did in toys, toys, the departments and top compared HBA, Yes, the and

a really very and a got deals covering. product. great have in of great floor of doing well we So We've been lot lot

exciting So that that I have is on right the now. we would thing most say going

to been not America favorable. The be has As good to We're we're and of with far going where about is we that, weather is the and loaded we're warm that we well. a know are. in little retailer weather I -- corrected feel are speak not locked May, in all bit performing saying which that obviously can't products and as anything only but we feel warm weather seasonal we

in any when in retail of and were Air night we year all got patio loaded. real long, and roundup. conditioners I'm come really with QX a discussed and to QX been kind to lawn We've And your got we're QX warm like at putting that in. kick plenty them We've together that. locked garden great of QX our our pop about expecting buys. And them. buying we much we expecting We've were so excited were going and are

Matthew Boss

your XXX% sales then recent between the stores the can talk to remains Perfect. the followup are almost openings? model. today for low-end of given just a I raising despite in at And are revenues comps target new stores, same-store guess your new and seeing store above the most on just And pretty what you you interplay far so you the productivity quarter?

Jay Stasz

are Sure can are the extremely is right, as well, the strong, class prior and Jay stores mean performing talk the productivity this as I and well new store this to classes. I extremely Matt, you

right like has So an we've I standpoint strong well a versus of and several we to planned do part little we those that last very it our the as above that basis from cadence and a reverse on with some But seeing a frontloaded standpoint. seeing stores comp as we've seeing mentioned the cannibalization stores and enter and talked think year standpoint, from been being something waterfall We're annual new about, we're of are are now this base. our XXX% headwinds year. those as the bit. have stores classes comp It's

Mark Butler

a the know, to well, Matt deliver impact are the from the think XX our obviously as Jay You able still very new performing stores in I perspective and we're quarters positive row. comps said, strong reverse as but waterfall

we're So comp excited sales. these grow to we're very continuing growing about store being as rapidly as to deliver able and

Matthew Boss

guys. best of great, luck That's

Mark Butler

Matt. Thanks

Operator

you. Thank

Our Brad from KeyBanc next Thomas the Markets. from question Capital line of comes

please? question Your

Brad Thomas

Hey, good afternoon, guys.

Mark Butler

Hey Brad.

Brad Thomas

for just us retail be and financial that impact First would broadly, guidance? your the tariffs on three the more industry react XX% around and latest broadly you then tariffs current give could how you on question your all the one, thinking more and tariffs how see change if with of in to the you And great?

Jay Stasz

Brad, that. start Sure I'll with and is Jay this

move margin, imports imports to the so of we impact as is very we major guidance, which And far a our If our are XX% annual margin the XX% that XX% baked keep for of do that is if up really what tariffs are impacted embedded the on And from follow XX we'll list an prices actually we along we're gross that X. margin, As tariffs to talks about, more price thinking in are into basis. the intact. like will right that then moves the is will model maybe material. up our XX.X% but and sticking supply is XX with because think have react the part retail on are wouldn’t will just tariffs that list, have we Mark drive not the they costs, a from are which by margin actually on and third what to chain level follower, our the we that the we one, importantly tariffs market us,

Brad Thomas

what's Got the And way picking pressure that back I the what's margin of and think had you in Jay, you quarters about talked XQ, it you half year, up being gross in changed then you. originally? the down forecast the in versus driving XQ

Jay Stasz

actual Nothing our product actualizing on cleaning it. a good It's changed. supply QX and shift has mix cadence, costs Brad, call it actual of is actualizing and up, but that no really and our This is just kind there just with kind Yes our question. model refining chain. it to of bit and little major of outs in

Brad Thomas

you you, thank very Got much.

Jay Stasz

Thanks Brad.

Operator

Thank you.

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

Your question please?

Elizabeth Suzuki

thanks Great, guys.

you deals have the question, you following of that opportunities the in are? of for on maybe sort than the Just fallout any impacted up tariff environment other interesting retailers seen tariff are for more

Mark Butler

haven’t might to any of that because we willing that's that seen and able are some come more to been XX% appears a and at navigate with accentuated Liz. flow there great seen through additional the question a goes that a lot or but while little a might Yes, I and it believe be with have in ready, and if the But there able the XX% orders. waters is bit through, people advantage that take able XX%, most be to of disruption, we deal mitigate become the have not major more because canceled we that possibility and when relation

Elizabeth Suzuki

And that out store any been in close environment retail want and out? you general, great. call just to closures noteworthy drive to the helping recent opportunities strong Okay, have would any

Mark Butler

year, the and procure the but by been opening smaller benefit "R" last Toys Obviously on based have that from take of recently able over some we've not been most we no. Us and most apparel were of to the leases this side side, with footwear Not the and/or year retail buy able and merchandise of the in or sites liquidation on large because them to based.

Elizabeth Suzuki

you. thank great, Okay,

Mark Butler

Thank you.

Operator

you. Thank

Our Jefferies. from line Konik comes next from Randy the question of

question Your please?

Randal Konik

scaling about where you of more, the Mark, lot. about in are us are occur Give unfolding were you I the you see term, the where the you direct. you or long the wanted if direct chessboard things getting if you, how, maybe to you today, you potentially as bigger, you're -- more Hey, Just pieces next ability of ask do where to business years, opportunity thanks do are you're some vendor more vendor you going the of over can in think kind think perspective areas just long trying think a the to five term? and in you biggest think you the if the of where go? at looking about over see, past,

Mark Butler

Yes, manufacturers, on but approximately - well are at we of relationships direct, and exact with think getting the brokers past obsolescence. deal the think and think product got venture distributors, the this at recently positioned our and men certainly our ICR, of middle percentage these public I still that and that, breeds march out I seeing what and we increase that when even through I started has and our Jay had close we we're we're company in great a most said had I that innovation the

love do out great years margin not we only any we've going new new and and on slowdown. over the happen product, made old So take with other we're thing we to to the that to let in certainly particular gross advantage Randy, the But to have because closeouts. lower a that's that able consumables of operate Certainly organization last the in to be comes see consumables manufacturer when it able are going mix don't the we a our hard because product, we that. within is few we besides CPG on upset goods than careful our strides and product cake

we to certainly beat day last in not toys toys toy business our and meet, can we're appropriately The and of And I buying to incredible plentiful, the last been where that looking we're are, Our on the overbought. a it. deals I forward and we and is very speak each year. but said I've phone very, on call ringing. that results keeps love previous have category had the only every to particular, as buying anxiously we're

I - that's of area So this that year. growth an expect to we think be will

Randal Konik

in in Got it. you're stores past, half seems end past now in of levels? It the recent when concept to what's as quicker be more improved this the new think year next of XXXX terms new versus year, you or going in has states, let's something of past. say, changed awareness brand guess, the awareness pace the years And at gotten about than of the almost I if or markets, has to up in from

- I’m different think seeing strategies there? you amazing, some us uptick of the is different said curious on just because concept? perspective so, and think give different Just it’s you report news of in levels What the awareness with what you’re the

John Swygert

Yes, Randy With scale is what brand. the just and of we’ve think [indiscernible] regards to John. stores, is I new being obviously with this awareness public there's more seen our the

some We we been, – to stores in up when to come Florida planned opened it’s a well-received. truth entered up been and in markets great results that's have that’s be new going be us there. we've for open the market was just believe every seen up to continue we we what and be in But hot market to the we've

it want. what think says continue wants is a to give America they bargain them we what to I and us

Jay Stasz

I John Randy, what think we Yes, excited, - another out and we're Florida. that see pointed just thing

related don't that intimate the vacation time. I Florida that might be did I with Texas only have Although and of to knowledge

going state. four right now. then is And in to up told year a to big growing a Texas. in - we're open in bunch area the and Texas We're that's very, year open of to very pretty stores us. good it's next we stores for to excited one more a And be have think two going Texas going Texas. to going or is I We're open there up major and be going we're this be

get have the you and And we're stores. we can up it so we - really aren’t going we now, get That’s to to when course similar DC our one results think get That's why open pressing thing. start really Texas. of to could open the Randy. I we've main but see DC to So, got the Texas, to the goods say doing

Randal Konik

Thanks, guys Perfect. helpful. very

Jay Stasz

Thanks, Randy.

Operator

you. Thank

comes Ciccarelli the RBC line Capital. of Our next question from from Scot

question please? Your

Scot Ciccarelli

questions. Two Hi, guys.

from the on size guess I'm foot is locations, with look would those the typical former XX% we calculate stores your Toys is than first for square instance, to at basis, much NSP would Us prototype? look way your in wondering about openings to of if it? your "R" store that XQ relative The like different I we like the coming a are what of

John Swygert

With sites open. square and normally John. the were is average, TRU than sites. this to on would are total our we historical Scot, XX% they probably larger They're in regards than bigger footage

In early probably terms square that. to on too comment per of for sales foot, us

Let far, pleased maybe and time belt out. They gates see a enough our the these come per I really thus square bit more with we that overall we're But little going to have see to yet to our we strong how compared get you results don’t should of under - pretty guys we the very the lighter today. tell sales come little us think very out in it have information be be but the mature it's a foot boxes overall chain. comparable, to when

Scot Ciccarelli

of just Just it. I'm for trying that out figure because guess more Is the stores XXX. be of I comment to Us you size the to is bigger to planning because or function north the frontend Toys of a it that NSP deltas. loading? Got "R" those are are Jay's trying

John Swygert

cadence it's anything. driven and by yes, more the the loading really than Scot, frontend

Scot Ciccarelli

it. Got

us you Okay. waterfall reverse while, I lot heard have secondly, know about And of help a a help impact before? cannibalization the don't of reverse can if talked color that? and about you quantify on impact. little a so waterfall could wondering Thanks. provide think just I've guys whole you kind in level cannibalization higher I then you cited that the that of

John Swygert

hard of which ready this specific Yes, great, of very the it's so something - isolate impact are strongly, just is stores and not it's these we're see where we're of impact. calculate kind ready we’re that headwinds. We're But give that there, that. we point, But we to but we things quantify it. the specifically, to not to can Scot. general, onion opening it. see quantification on can the at peeling those In generally, out That's those one seeing still

Scot Ciccarelli

kind idea call it of just a then So some of Jay, the as like opening? faster stores number the because citing bigger of store out of

Jay Stasz

as these we generally that we've strong about before something XXXX internally, and compounds XXXX it's - mix. It's in it part with discussed of cake Yes. talk XXXX just and it classes and but is the

Mark Butler

- and Scot, just Yes want we it bring up we're tell and us about it to we it was to for you guys seeing we prudent thought because it.

Scot Ciccarelli

Got it.

Okay. Thanks a lot, guys.

Mark Butler

Thank you.

Operator

Thank you.

Our the next line Judah Frommer question of from Suisse. comes from Credit

Your question please?

Judah Frommer

see taking private Maybe we getting for limited questions to Thanks just first the you my impact the second, label of are help just close some kind a and different tariffs within us for questions. XX-ish that are, your out? the business? product back to you Do the of drivers percent impact areas sourced Hi. tariffs of is on of of the business? Can with in get different kind

Jay Stasz

close domestically. out all that is sourced bulk of the product No, Yes.

our that. we from but seen the have call impacted by right, to impacted. portion impact direct what might on there's you come is That about that a factory no and are from of there's it XX% some label So that do of said are overseas, Really, only XX% then tariffs, purchases private that historically. XX% be deals we've

purchases day impacted amount the end is to X% tariffs the of of the about So by X%. at

look is are if one, would buy and to change box - with his suppliers. buyers retails always stores if big on to the try if get tariff we there's pushing always change again, we our market moves so not in look retail price we’re impact And the the would a retail lookout. followers to better price Mark a setters

Judah Frommer

kind help spring maybe, kind what talking pop and of of weather? historically merchandise can terms And when us of in seasonal you rainy about Perfect. specifically in weather Mark, hot that for QX late garden have seen Okay. lawn maybe you you some have then you’re that

Mark Butler

at it a couple we Yes, of I things. think look

For lawn patio pool furniture us garden, it chemicals. conditioners more is and and and air

too pattern, We many to and that their nice. were been shock furniture favorable less have up the So able lawn not hasn't people to open when be fully We fully We weather expect their opening chlorine. sell you to expect than a them pools. just pools. there's

lawn of furniture. plenty have We

locked. We're going have and a nights weather of We're we to tough we a need that's when it's if couple down ready. up off of little to take sleep performing fine and come. south, just then We're They've loaded really good the expecting conditioners that that is really, north just but really conditioners bit better central and systems. air of fully been we're because heat sell air the air

and where calls like But know look season July been QX don't we and we five on, this or look take and do right we've we think, four I as selling QX we before together really at the August. merchants it and through as

Judah Frommer

a lot. Thanks Great.

Mark Butler

you. Thank

Operator

you. Thank

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

Your question please?

Rick Nelson

new to like Thank merchandise some, are pets an you. company the Can pursue you categories? apparel categories you any to newer adding just buyers provide update the on of and some other

Mark Butler

have categories announce. that coming after trend would in see was going other no and any There's positive one Yes. in comping a we're nice QX QX. buyers any we don’t and departments or apparel new that other onboard we the of We

additional have, Rick. categories, don't additions, other we than that XX any we see as far the As other

Rick Nelson

Okay. Got you. And…

Mark Butler

been been And by we've pet - on, Pets, doing and continues and performing do way, the focusing it's well. in to very, well just very

Rick Nelson

hear. Great. to Good

You’re big pile million. $XX a cash, sitting around of

You've leaseback. that from got another sale came the million $XX

do if to the need cash think to business? sort should speak see do of the grow, and run you level to could you say, of you you that where continue absent cash what position buybacks If I’d

Jay Stasz

Jay. chunk that. right, of companies our even to we're balance that coming this spending of Rick, going overall also is right, we're going this and cash of in pay related from lot to think coffers a is million, having that's our so cash $XXX we're - a million third point, to speaking, Sure. your have leaseback. sheet Texas, to going fine generally To I the $XX incremental $XX capital DC $XXX building million and mean, out we of there's finance on of take And capital million year But million to have sale in we're our books. to more the a chunk the than and $XX off of going for

quarter. again, announced we'll on the buyback we're last of stock comfortable, $XXX right, again, million, we're our But at. So cash books. where We $XXX have million maybe

the standpoint. - get from just So We're that's off an operating rushing we sheet. cash we're that level our not to right to have not balance think

Rick Nelson

right correct. good all Thanks and Right. luck. Okay. I undThat’s

Jay Stasz

Thank you, Rick.

Operator

you. Thank

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

please? question, Your

Edward Kelly

guys. Hi, Good afternoon.

a wanted - So, ask follow-up I to wanted I to toys. just Mark, on

guess, Can bit market You what how mentioned this on beat. as out looks you of more what this industry where much part year? are confident you toys last where your I saw like, tone a your to year? we inventory provide just toys buying color this is particularly the And packing you cycles of that of you part disruption on the around - sounds away get as then toy this, and of comp sort were

Mark Butler

we went I feel toys. and purchase. about We've you this of at. obviously after feel our We the Yes. hard number, Christmas the been year Obviously even anticipation good but won’t I we're before about give in year good of last where

be outs widen assortment that is and breadth, our you I as perhaps our widen don't will quite of deep. our to try maybe tell close to philosophy

toys and in Our to preschool a a our focus this toys little philosophy year. lot bit you're think going see stores on preschool more is of to I

beating and toys a again, have not plenty to that results we have arrive. will there's is meet merchant, going our intention year, that we done sensational and job phenomenal we every had last the continue has to that. once only are confidence But Scott, the arrived of I think of

Edward Kelly

beyond strong of were despite allowing about to you model to I a just I a relative bigger less drive that's ask what about guidance. how played leveraged was you expense that unique such you Okay. on robust about could of leveraged costs it just to and to points. by you that, growth? SG&A the things about And I hoping and how what the could you full-year a talk talk about just picture, wanted you comp leverage is sort better then maybe is expectation. thinking out It's SG&A start mean, I store than was you continuation hoping and than, And X% XX basis then than leverage?

Jay Stasz

Jay, lot good had back the in is the comp I It perform. a what But from It and said, there, quarter. address new basis points. but in this didn't I'll side And have start can I'll XX on the but leverage. was have we'll there. questions And you and the you stores was Sure. it and you of really go like we

So expectations. the total beat our sales

leverage some insurance which on saw get as So where SG&A the we well quarter leverage We did to by the some in just utilities quarter benefit were we our the We the quarter got we the side in so that's maybe the is as G&A lot a selling G&A in overall news. side. costs had on driven versus lever we rate able of levered great labor. which

That and just never points comes points also leverage And expenses maybe our focus with change. had to on if last constantly John of Mark On in money, spend of have don't from that basis, goodness or spend that and change. now leverage on basis from and don't an we call basis culture planned doesn't a and on it so XX we about all top probably XX we XX the and QX, closer SG%A. with to the the will standpoint, annual we're the we

That's we as I and have a we way stores to our that's continue don't as And far then the expense it We high-touch don't think environment to grow it. culture. ability have don't just again if our lever the do just gets we to That's and go-to-market. spend back.

Edward Kelly

to on comp the point multiyear Just a leverage basis? about over the think way

Mark Butler

Yes.

understand when and to again, stays take lean people management so try And want we to as out think it think but four going there to over if we other which or in we grow run X.X. tight, we're to X I up going I things as it that to I times look run two, be years. when three, invest are that, at we

anything XX than XX of So, wouldn't XX leverage basis model more each points, points basis year. basis points, I

Edward Kelly

you. Thank Okay.

Mark Butler

Thank Sure. you.

Operator

Thank you.

of mind the Paul from comes from Citigroup. question next Our Lejuez

please? Your question

Paul Lejuez

if you heavier second Hey, that a if Mark, categories bit than thanks, there coming use be I'm guys. like little you're there overbought curious are - are a just quarter that term opportunity? you some I'm during have that also if that? the or And are felt missed what And if feel XQ. any cause quarter, of and out you'd follow-up. sales now Thanks. maybe curious there you of first any light I’ll was so, end the to the appropriately

Mark Butler

worry think of any all levels. about don't I the Yes, I at that inventory

get the inventory excited I levels. think about I that

are a we were time in I'm at year about because knowledge. where I toys, where think this excited the more lot we we last vis-à-vis have that

know year. that We flow a ebb coffee didn't last that. this came the about I'm and that more had also have we for we it toys, being deal-related customers deal, that or so to excited have driven year talking major this that is we a about business, didn't of deal the year coffee, coffee have I'm the specific not theirs With a a lot I'm a talking big deal about us

of and So, each they every close business, the up day. ebbs and flows the happen

the that if expected noise was it had to involved weather. seasonal There think QX have fine better tax a couldn't have all was we it QX. about everything. just business Easter. refunds that - weren't in I in noise would of would that the the in be we a lot weather, the We better There's late we was performed and

at. some weather loaded thrilled So, where some and sunshine, performance about just and I we're was hot needs with and I just we're our good feel and locked

Paul Lejuez

the seeing expected curious of it's can It's distinguish equally or you. if the then the performance between both rest better versus Got new the if really locations? you’re you the non-toys on strong performance than at the results. And the locations toys I’m boxes. driver stores, of

Jay Stasz

good those Jay. Yes, out not across we're to both. going And get this splitting well. We're into are is seeing very performing performance both but

Paul Lejuez

that across you Was And more the related can are locations first that or you did to just we remember. board? the cannibalization, seeing toys mention something time

John Swygert

entire We've it about previously. John. related talked the really is to This across board. is this Paul,

about talked it call openings not and we waterfall had impacts, grand in it's have and on we something it's the out backfilling in We to continue it definitely a forever. but We've think reverse existing markets and a proper chain ton quantify it drag necessarily there's have what that's as continue because to strong to we the comps. there grow don't

it we feel felt to to appropriate it don't to it but talk a just it out about call continue remind We was time everyone because we

Paul Lejuez

Got you. Good you. Thank luck.

John Swygert

Thank you.

Operator

you. Thank

comes from Dougherty next of Hamblin Jeremy the Our & question from Company. line

Your please? question

Jeremy Hamblin

And you about think foot about that in Thanks strong unit site or maybe thinking the XX,XXX locations, as on strong XX,XXX for back of wanted potentially of taking going do location? model future larger I target in the square to a of your new type the given come questions. the your forward the to little of new to terms bit locations, productivity. Congrats TRU results. going performance kind

Mark Butler

lease. Toys I "R" to particular us in property not Well, very, provided to buy sites participate think opportunity that the whether we and/or to very Us for could the raise hand the to we where and wanted bankruptcy court buy go or unique our a

many up average stores of were several stores, larger been of the the than what Some over most to years. last the have those opening we

of hurt - in said, "R" They’re That it the non-Toys Us the crushing phenomenal. we’re all doing sites stores. being are

it's certainly square a that per we're be, would a going could have us unit know, whole a TRU we the more to opportunistic are ownership we XX,XXX unit and And not probably early at price what main too just were So, value than TRU to be or a The as main sites. on do volume could average that foot more square hoping in the which but us the get totally more - to and on XX,XXX it's in related opportunities to way store sites leaseback. subsequently that foot those for store. sale for rental

about just way, XX a about this open We're excited the that year. we're and XX the the too really it's excited way opening in we're of It's TRUs. we're going think couple year TRU keeping productivity to site to non-TRUs I the excited. that and this early and TRUs more We're mind of up quantify

Jeremy Hamblin

Yes.

Mark Butler

XX,XXX Jeremy makes square the anything depending spot. is XX,XXX move to marketplace. number I that and need - to our foot feel on opportunities the our we definitely overall us been we've seeing store we models, that opportunistic, think new And store in of have off not we we Yes, the believe definitely obviously sweet where change is we

we So to try into we average work foot store. that's the how just and XX,XXX square

Jeremy Hamblin

performed presents history you that a of slate we've by has - TRU got where whole in a clearly which followup on let's in for year it's left excluding them them. has performance. the then, you, vacuum the great. out deals And Okay, we've really how that we've opportunities there's really question toy had of category this and the movies are has and And year category these say year Star as this back strong in there look it probably big a kind the of got that opportunity, licensing how Wars kind of or a years licensing Frozen, whether slate

Mark Butler

got I'm X. I Story X Yes. X And to and probably have going to Jeremy, to going it, Toy but product. Story we're benefit you, have able from look, tell to Toy I'm not

Jeremy Hamblin

Right.

Mark Butler

And closeout that's industry. just the the nature of

again Toy fall. sell out the the - year, in product. to I'm next in is year, And next once Olaf Ball we all X have So comes likelihood Story certainly, going going to Frozen

All Toy store it's the Toy have the or think into stuff bought have released of week to bringing tomorrow we we're product going that be the going be Story this Story and and next year, I in two. to

it's that would be anything driver a not deem So, we to specifically.

a out but we do could year. we However, the the attention the it. We hottest, to close to at latest, we prices the pay greatest usually have current, wish wait get

Jeremy Hamblin

Right.

guys. questions, luck. Thanks the okay. understood, for Now, taking Good

Mark Butler

Great. Thank you.

Operator

you. Thank

from comes line Capital Markets. Our Chukumba next from Loop question of the Anthony

question, Your please?

Anthony Chukumba

Thank question. I my very you on taking Ollie’s just Army. want for to focus quickly

you any in and of over provide X.X that sales of of Army members You color what terms what Ollie’s XX% percentage was for? - sales you just members million your active mentioned Can of account their have that year-over-year. up percentage

appreciate building member that, I I I’d question your just of to going any you sort then the And in will just to ranks terms but had not terms other color I out expectations? numbers, was, give are and us any just provide only the just ranks mean, in Thanks. you’re of see to if of if member how commentary relative want the

John Swygert

north non-members as XX% our responsive Sure, now very we with. spend most than which are of Army, overall Anthony. about the total members very, than well. of the With makes They non-Ollie’s obviously just XX% store up more our frequently visit our regards This members is to They John. and more have. sales that we’re pleased Army

So the been and than getting stronger. keeps it’s Army stronger is ever

we to programs and I the think onboard it doing opportunity to been the to path us as pleased The making track growth very that. that right quarter, speak is enhancements we're easier expected into have them and stronger in better of and on than well. we're give with them that folks have make We to for try to we’d the so

the would very want we With tell we're ranks are to regards and the three balances reset I Obviously about the but that the are even ranks, what with we we the to at of the two talk of as we're with seen, the our the year necessary we report the very program call far. don't thus performance early. percentage we've the changes so happy far, pleased beginning stars, are within go, we out seeing them. more won't ranks, rank in you we'll and I overall and

Anthony Chukumba

you. Thank helpful. very That's it. Got

John Swygert

Thank you.

Operator

you. Thank

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

please? question, Your

Christopher Prykull

my I quick margin. questions. just Good taking evening, on gross Thanks guys. followup a for had

basis I what was excess about you in that if XX from then that XX to guided was points you XQ down markdown basis risk related product? any correctly. guess XQ to heard you think seasonal points I and there see I

Jay Stasz

models just there Jay. disconnects. we Yes, - we cadence saw clarify to is some we that Chris do in were this the the And

basis then we and decrease So, wanted of say get that basis the in that to the year. back just point clarify to XX QX and year-over-year in right back XX points we half

year XX.X%. the we're right full a at on So, basis

the doing fundamental no of really housekeeping in changes the business clarifying and there's just So, or some kind model there.

Christopher Prykull

Got for throughout it. of rest then and freight costs year? the the And expectations distribution

Jay Stasz

about had on XX was supply chain we of basis be XX basis comprised points - about margin points XX.X% of basis points we're increase points. of well an on and basis kind basis would merchandise increased planned Yes which costs to by annual of XX that an the in offset to XX

seeing well the chain so come trucking spot out the as front, full our our related seeing on guidance we follow and costs they costs. of longer at when the of year rates as inventory But increased on not increased investments DCs are just and in the labor Those supply or both inbound seeing or cost primarily of hauls, margin in costs because are much primarily are it's to costs outbound, in diesel We fuel. what less. inventory wages embedded we of to increased so turns the But more XX.X%. due

Christopher Prykull

Then Great. if just I could squeeze last one one in.

maybe you get the fifth Us looking you I to Just of on sort real the and chance? with those locations term, estate Are main existing Toys "R" better sites are you strategy mentioned longer locations. more upgrade if sites guess, your

John Swygert

or that store John. in and if really that. our want tell stores. stores a our our very of it's is you, profitable luxury, performance very, this ourselves a regards With say hard find to would stores, have change to you overall store when We I you to upgrade Chris,

not our looking right can history, and available, space are tell are at always big - were right we relocations. consider So, we on you in become it. not to the actively But we if would the look - as we're

today retailers out most have a and continuing Our available marketplace payback are we're to sites stores and is so the out of issues there the had plenty of existing get at TRU well. are it. hard availability there profitable, them that out on look there But of that in to there's a recent that have look in stores as moving very are years quite some at other to bit still couple

continuing to to continue at we're to good So, estate. take take the a real opportunities a look

Christopher Prykull

the and year. luck much the of so Thanks Great. rest good

Jay Stasz

Thanks, Chris.

Mark Butler

you. Thank

Operator

for This any back Thank the today's Butler to the does program. question-and-answer further program remarks. of hand I'd Mark session like to you. conclude

Mark Butler

in of for everyone, Thanks, and support call Ollie's. Great. participating your for our

forward with very a for we're in quarter have much excited you growth results year Thank to a we on in great heard, and call day. second look our We you had As just great early continued and our you the September. start XXXX. the to sharing

Operator

you, Thank for gentlemen, and This conclude ladies today's the program. does in your participation conference.

now may disconnect. day. Good You

Ollie's Bargain Outlet (OLLI) 6 Jun 192019 Q1 Earnings call transcript