OLLI - Earnings call transcript Q3 2021 | 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 Third Quarter of Fiscal 2021. Currently, all participants are in a listed-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. And, as a reminder, this call is being recorded. der management Jay John and Stasz, Officer; Eric from Chief President Chief call President and Officer; Vice Executive Senior van today’s we Operating Swygert, have and Financial and On Chief Executive Officer. Valk, Vice President turn now to over ICR call Relations Jean get started. the Investor at will I Fontana, to go Please ahead, ma'am.

Jean Fontana

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

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

certain our release. to GAAP the description measures be referring turn our included more comparable in non-GAAP to measures investors operating today's non-GAAP may Reconciliation With for that call be financial earnings of will call assess I’ll most measures we those closely financial the these over factors, detailed are believe we financial performance. of a important on For that to to John.

John Swygert

for you our Thanks, Jean, today. joining call Thank hello, and everyone.

a on ahead this us. and challenging quarter difficult opportunities long-term remain bullish While of was very we the

on imported chain seasonal right leading our chain and below These delays product third delays results greater create in distribution was our supply the causing a performance supply which headwinds, headwinds network, in into product related than turn by in stores quarter, of the in to centers Looking expected to included back expectations. backlogs operating primarily sales the shipping timely fashion. shipping a our impacted

outsized in sudden on on the a also impact our who portion customers an income. had that We a believe of inflation live rise fixed mostly

times, While, team's efforts were I'm these challenging during extremely overcome quarter. of our these to we through headwinds proud unable the

third Compared our quarter XX.X% store decreased store XXXX, comparable X.X%. XX.X% to sales For to last compared a sales the year. increase decreased comparable

are we transitory we believe these the business confident results, of are nature. our disappointed now While factors model and remain that us with right as impacting in as ever in many

So let what opportunities see. me we discuss

to presented see deals very with goods more related and abandoned and delays. And expect even us each day. about remain we First, every cancellations, incredible being shipping deals we order excited to the import to associated

period value driving business as Second, our trade our third, highly down. benefit and continues, customers, made across distribution efficiencies will consumers progress to we believe centers. provide throughput improved and we meaningful increased we have And which exceptional this in inflationary our

detail, these address more me let chain. each the in beginning opportunities Now, supply of with

availability and to our offering Christmas capacity in shipping quarter, third later key challenges the the of categories, chain port expected than to supply containers, This toys, including as by certain and During heaters. constraints such impacted seasonal was were related we reduced deliveries congestion. due

we and cancel see ways product we to available inventory, number designed and are cancelled overruns, capitalize abandoned from that to a package shipments ranging innovation opportunities see generated is or of from what closeout delayed forward, are orders, We excess changes, on. disruption deals incremental expect as Moving this bankruptcies.

as During great measures we for we resizing I packages, strengths, that deal their are opportunities. such inflationary and creates offset environment see beginning opportunities The flow continue to stated for COVID opportunities and into which exciting deal times, market to higher also creates costs us. companies of at current see take the we disruption our Ollie's. pleased that plays

us timing led centers, issues The to distribution than forcing levels receipts with have to out longer Second, room return were anticipated make our in for to and the some the the while closeout deals throughput that marketplace. in arriving. DCs, driving made for all supply we increased push great to it our of progress to challenges in late our optimal took delays imports imports our of chain

typically supply our vastly processes, the In our changes deals and implemented our by certain low flyers. end of of drive the progressed. our addition, improvements in timing the we saw to into best levels the In advertised it our made improved we in as throughput Despite as difficult distribution that leadership challenges, quarter were well chain include the visibility deliveries flyers stores. did as to excitement pleased and throughput significant reflect to our not centers, the have quarter. items Therefore, achieved

Georgia throughput and our needs. levels distribution operating centers desired Pennsylvania to at are Our meet

work more Texas still at we have to DC. newer do our Although

hitting to close very our throughput we're goals. Importantly,

While associates. as attract human worked a our capital to to in hiring have workforce remains made quality process, well retain investments improve challenge, and as our we

was We enabling service in up last end XXX we total XXX due the are pleased compared a stores. additional in at part receipts ended square XX have the heavier decision made and product. XX% near for stores to inventory expand to year. center to with our distribution the share to approximately feet, Pennsylvania quarter import XXX,XXX This to of quarter, the us We increase transit by

as still with previously. to inventory which opportunities current are DC by stores the there pleased I are our both stores, are spoke in of however, and our serviced quantity of We quality our Texas most today,

to outsized capture our customers consumers have base customer creates our value we headwinds, of supply on to economic an that addition reducing to business, base longer-term. a appeal necessities dollars. is this customers our customers impact their grocery uncertainty, of financial extreme income as gas, seen and on are which their periods That food, fixed and allocating we we believe fuel that broader having new opportunity discretionary us to services income of portion offerings chain to a of other in for higher believe in and we said, believe need their percentage expenses. lower stretch our historically inflation related Since pressure a dollar are a is creating further, In income on

sales driver In of will we quarter. maintain proposition. sales members. last year of historical again active addition, continue quarters nearly historical our Ollie's a sorry increased value quarter, ending while the our matching opportunistically Army million saw The XX.X we raise in almost year be the is over high. in Once to our XX% the with XX% strong penetration the prices Army period prior high -- last key

biggest shopping Army Army excited we One events are the and members doors to is in to December our again Sunday evening for XX, Ollie's Night our of and once an year, discounts. exclusively open special Ollie's of

our seasonal deals addition other Our our most with bargainauts product and toys to stores teams great our will loyal be and to are in packed [ph]. welcome eager

still to join hope see in now Army for and an to If there. time you excitement. not, member, night Army If we enlist Ollie's a the of us you're great deals there's and

enhance plan brand store In component customers. a our our as incorporate terms We marketing our to attract to new continue to brand digital increase awareness our marketing base. to we evolve customers, marketing, our spend maintain with loyal our year increase expand of to we next connection strategy to while awareness continue most

the in real stores Illinois, year. opened we including fourth quarter third estate, the state first during we XX entered to Turning new this our

total stores We to bringing one stores XX opening have year-to-date, in with later states, current for January. XX additional opened plan in XXX us new a

have new of current While impacted new base, stores the pleased same with we store remain by productivity been overall. the as dynamics stores level our likely our

between model in we our stores to go basis, support plan are to that stores growth open can a ultimately New of total. on the forward stores believe and XX engine our and XXXX XX sales annually

chain as compared to digit business model confident store our us outlook. our ever long-term Quarter-to-date, supply low growth impacting are the in likely and comparable we single as While down remain XXXX. short-term, in the sales are issues trends

this we While compared expected during than of our more store we seasonal to us X% causing on on of the XXXX. the products flat have out arrived it selling received to comparable sales be down expect Based fourth season. later miss early quarter fourth holiday to to quarter,

announce growth almost pleased an and benefit one repurchase the And a relationships front in company and into high believe are we we significant XXX are to that of growth attractive share in the lines the we extreme we we will as the of the XX-years. board continue and deliver our Reflecting a in us, have have our past authorized strong the program. most retail future In from has XXXX, value. confidence marketplace. for summary, million As and to the we disruption top additional sectors business scale, knowhow we the confident in in we to continued whitespace with bottom look both grow well are

XX,XXX finally, and times. supports We and I the business plans. to communities and value growth these proposition to our support during we other our all customers over of footprint, believe to do team each members have they serve for model runway expand our And our thank want tremendous long-term our challenging

I to the we financial Ollie's. our say, We take to As over call will through you hand results. Are now Jay,

Jay Stasz

everyone. by and afternoon, the teamwork for Ollie's start incredible good want and the John, team throughout quarter. Thanks, their entire I to dedication thanking

Comparable very the Comparable we million, stores to opened late pay additional a from quarter, on $XXX For to gross sales decreased a In margin to wage quarter same XXX point rates These stores ending years. XXX pleased stores our selling themselves points the XXX on due XX chain opening prior a of returns, total percentage XX.X% our in new in productivity than XX.X% primarily the year-over-year. another SG&A and with XX million SG&A XXXX continued XX.X% decreased stores XX% and in for Gross increase including expenses sales X.X% stores and compared an states, $XXX X.X% in primarily ago. profit January. a stores, for XXX due a a year-over-year as margin this basis a totaled decline trucking four in we're new and the due the sales margin growth quarter decreased to to supply XX.X% to declined compared increased of a period store their store was $XXX,XXX in our Since to $XXX.X basis DCs, prior year in to with net X.X%. in settlement higher higher points we've the cash in and year, drive of relocations excluding offset than quarter, sales to end which the two from cash extent a the and import year. very costs one the million, to The costs planned merchandise of year. strong as in with XX.X% result two deleveraging the less decrease basis sales. lesser quarter, compared gain additional store count. increase increased XX in decrease period as new to opened net expenses the insurance more third

Adjusted $XXX.X based tight decreased expense million, totaled operating and operating settlement was which adjusted XXX prior Adjusted with controls a throughout to and share from to XXX operate income and period, compensation income and At under X.X% XX.X% the tax prior the we was for the adjusted organization. million gain decreased decrease basis no insurance X.X%. in which million, This credit insurance gain $XXX quarter. points the basis related net margin benefits excludes diluted $XX compares the Adjusted to per year. new Adjusted in EBITDA for and $X.X earnings the the totaled million, continue stores. in $XX.X stock end $XX.X year. to million the $XX.X outstanding excludes points of Capital $X.XX. We was the was borrowings margin expenditures million revolving had cash. third our facility, primarily quarter million existing EBITDA

to flow of to a our the fund Our of is testament in cash robust strength strategically proven invest share and allowing growth model, track record us our buybacks. generation

our of bringing we repurchase quarter, prior million the share our our During repurchased worth year-to-date share $XXX repurchases $XXX shares to million. under program,

fiscal as our to our level earnings returning program, As in are in levels unprecedented on sale reflecting thoughts of you continue our comparisons directors quarter the continued saw I benefit $XXX year, value meaningful last share perform from repurchase an million challenging the the on fourth the our some an has release, high shareholders. board top-line we given to economic commitment to share authorized quarter. later additional remainder of ‘XX. stimulus Comp will

are XXXX. addition, comps same In headwinds quarter third our continue digits low are versus tracking expected the down Quarter-to-date we to period in results in saw the XQ. single impact

store compared flat X% as comp for be ‘XX. down to expect sales We quarter the to to

For expect we between the to year, to full $X.XXX $X.XXX sales be billion. billion

are anticipating in all continued and ongoing retailers, the import We increased higher trucking due labor gross impacting as costs. costs continued margin well chain headwinds to including pressures supply as

costs. margin the we XX.X% are than to for our gross prior due higher manage what costs. approach anticipating doing strategy higher import heavily the pressure additional disadvantage This year. the operators transportation from has been XX.X% opportunistic are structure gross and we market. between has This guidance be securing is now and we're environment, While in to can resulted to to well in procuring expecting worked mitigate margin higher decrease spot this for and these Historically, and XX% costs, a inbound unprecedented the on capacity expected in us. non-vessel relies transportation In

For of the full $X.XX year, $X.XX. to we expect EPS

While our thought ‘XX, to details fourth some more fiscal to expect we and be provide for guidance are we'll quarter on what we around see. we helpful context it call, not provide might providing

year. stores plan our the XX to we continue First, expand will and XX full for to to footprint open

we of sales, compares. first-half comp anticipate terms store challenging to more of given be year the tough the In

stabilize to the comps expect of year. in We back-half the

costs, pressures We which to This margin pressure capitalized be costs continued first-half for these as gross transportation in of increased recognition in inventory. from ‘XX, we component gross margin expect the as be XX.X% the quarter particularly well to elevated to inbound the of expect reflects a between first as of XX.X%.

MVOs growth and story Going partnerships. long-term to be with with space work forward our securing forward ocean we ‘XX. we and capacity, to have have expanded contract to the we're They carriers directly number working secure fiscal of for found to looking are attractive,

are merchandise and to continue. within expect well our ranges that we Our margins historical

to contracts they return historical as we ‘XX. our the we in shipping As our of restructure to margin back-half level expire, fiscal expect gross starting

of session. excited growth marketplace financial position, for nimble I'll as operator, We to necessary. to operating will continue evaluate us our to keep our start It's the respond effectiveness the always model, plans and that strong the now the future. long-term the call opportunities our Operator? the Q&A and turn back to

Operator

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

Your question please?

Matthew Boss

Great, thanks.

still of XXX John, algorithm? quarter? X.X%, X% how to much if is quarter the we supply fourth relative quarter. would to about sequential you to long-term X.X% about visibility the you confidence think comps tie chain? level that XXX the deceleration, What's of the to second And think just your If what provides the remainder then in we third X% for maybe comp start relative to out, that points XXXX, down to basis So the

John Swygert

would in to at I tell the hard is getting confidence to is Texas and operating the you need we've Matt, really will DCs very confident there at. to we Pennsylvania my get that shortly. worked we levels, and of comes throughput the that Sure, said them we optimal be that, aligned, get DCs be DC on And the the levels the are there at very Georgia newer as call and feel where

of challenge in future. received our to the pressure important and in stores well-positioned lot year. it seasonal basis us the Obviously, probably there. again. on is and algo compounded we puts we'll us in continue fully to so the goods very we'll And believe working when QX start for fashion, -- from toys will long-term long-term need goods focus holidays, goods occurred, late bit shape a expect some compare used are I after don't a the be we’re algo to once we continue to till upload by in as deliveries think believe an to algo. a seasonal an that a numbers deliver be the to this issues we And we're with in and on to bit late will guys that don't a tricky, November, actually forward the the short order will in all the to against. of water we then are us in I the be on the product those have will to ramping still got line be deliver make piece. we are believe very little a prevent back that We're that some XX% timely stores going see a one DCs the against to get you intact. XXXX, We undue I I that that improve the going hit with of we hard to long-term the seeing. on them we and So But that getting for on that timely from offset stimulus comp delays little But they so our them.

Matthew Boss

margin. to Jay, up then And on Great. gross follow

gross quarter I think the help two first on out XX.X margin just the this come behind gave basis we year think assumes to the that some that margin quarter. stack But moderation to relative to drivers will at? quarter. moderation So third to year, that think relative year XXX break you color about it us points Could sequentially? gross a fourth the if on XX.X next about for that you down guide the And level

Jay Stasz

QX margin with line intact being the these and That margin increased gross is costs. I about that mean, really our in right headwind is driven historical in is levels. the by import merchandise driver. so Matt, Yeah, talking we're

the again, costs, So, the that's talked we just ask And of can your you second about. driver like import question? then

Matthew Boss

relative next you year this the Just gross whole margin guide a rate? that have gross margin for for to as year

Jay Stasz

so in in the going back-half, we see said expect going it's right. Yeah, the pressure, would first-half, continued we back we're like to normalize to

So and QX run be the that for and are a But they rate ‘XX. We're if probably be where QX get pressure, see us probably, for under be QX to not ballpark line in we're you right with would in going going normalized better sequentially then QX. say pressure but range. would but QX in bit a XX.X, guidance that and QX, to still and XX.X on it's the in somewhere giving to typical I model with XX.X little you right, going to it that

John Swygert

and with Matt, sure that gross expecting see. our to line that back-half be have make margins been guys understands just accustomed it, the back clarity to you ‘XX, in everyone we're add of to historical

of So we'd if that's to the be you pressure annualize the XX, the close somewhere that in at back the in bring XX%, because us down probably the to but first-half, going to to neighborhood. back-half, XX.X

Matthew Boss

luck. great. of Okay, Best

John Swygert

Matt. Thanks,

Operator

Thank you.

comes Simeon of next line from question Stanley. from Gutman Morgan the Our

Your question, please?

Simeon Gutman

issues? good And also stock store beating up and two talk year Can Obviously, you circular a about across being are transitory may you shows are any chains some chain think a the on time these couldn't -- how issues end position be this negative about supply as dead over. horse the in good could by categories want particular Hi, I be. the that evening. But I the everyone, talk it as know this basis I mentioned is cracks. are. to call supply comps

John Swygert

in certain bring very that's you opinion, in late issues product into on in are heaters, enough. we important toys, us. Yeah, imports time able goods very, where when us supply the and to really get holiday were there's in pressure are transitory our they put didn't timely And Simeon our times important an the arriving, get obviously, the And they to be nature to for chain. when us. the And normal

getting come us and wanted advertise we for something the be pushed those to able to issues to deals that's as be get product behind the able some had And we're focused created We're the make got that to ahead as in. we time. to it. in that the to imports it of we're have, So we organization, and same don't at this an to expect very And on pushing point hard don't have issue to sure repeat. occur

with deals we've some two to we Like size of getting issue them With we've chain them period, through not stores permanent plan. that with with year pleased it bad, with happy we worked In get probably internally availability a carriers then, not there. our perspective. make now, stores, it the doesn't adjustments right are not not the the to what gone got at there's past work so out all not said, and sequential with there, it, So with The got have a of for in here. too it, be contracts to our over supply down X.X% just definitely all the from impressed we regards at meet done. it timely to the we goods to better sales we're our able kind and flowing the to

very that be need here And right late and be. in be we get the feel in we're back But in the manner look back back confident get the we stores. we forward to in to needed stock a inventory we in really holiday the stores the to season. I and to to going start stocks XXXX got So where right flowing we'll for be the position think we'll

Simeon Gutman

is high fixing engine level focus not confidence just pass. of Or, part guess just like you completeness, So pretty confident it that. you wanted supply get you can and wasn't you're ask, thought openings? sounds and the consideration on chain will to the slowing the I down just opening consideration? thanks it's any to I by of for give did have this that distracted or for so It

John Swygert

the on had doesn't didn't to everybody size. our company think part gone a a our contract We before supply not it our all. basis It We does don't we And of way consideration work. was for is I marketplace. think long-term work broken. think a and have we in it chain at we Simeon, Yes, the hiccup

these with our in chain network. we're So having issues structurally nothing supply definitely are wrong center distribution There's nature. transitory or

give thought we have going XX flow shape it anywhere down to hesitation believe in any open we're now. year to to from XX so think to I growth, the a as right is we store, stores, didn't even slow don't continue to the we to XX XX. So good think I next and We're to

So stores we we're year. do good those think well-positioned fill to and next

Simeon Gutman

Great.

Okay. the and Appreciate holidays. the good luck through color

John Swygert

you. Thank

Operator

Thank you.

from line Our of next question comes the Peter Keith from Piper Sandler.

please? question, Your

Peter Keith

good afternoon, Hey, everyone.

did now I to sitting confidence of know people end transit So inventory sitting what for level you right just you is the address the but apart briefly quarter, in at available sale? break maybe on. some you're in that give the wasn't what Could

John Swygert

Yeah, product on was available that the increase water/import us XX% to that the sell. not Peter XX% about of was for of

remaining The was cost the capitalized and the the late is after arriving was got portion third was other XX% And and in completed. the DCs quarter inventory. we the product stores that to

Peter Keith

Okay.

position inventory using if versus And sounds so then my better the just the like be feel question I’m fourth next inventory it you about would this third. quarter position, the correctly, with it reading

not of year two stack guiding You're better. for it out the kind you're of but the But similar seems comp. totally woods,

to you Peter, that of on the the toys that you're I did start just feel at is QX, seasonal we correctly, inventory, we We A better Swygert a where get year late lot water - two So the John feel much we're it conservative? of better about and am holding reading at to a end the but QX. be side. on our inventory had today about

part November. So we lot fourth and would receiving the which the be quarter, a did shipping of of early in

the we got a start. a November, so of bit got during toys seasonal So our stores late of and little lot a of month

good be of So in today. beginning the real would where I'm I today feel liked sitting at where I November. to we're sitting have

about a I'm month So later.

a uphill and no us reason so of we stretch to So there's ahead got ourselves. for little get climb, to

we we going need an today land. If month better. were much will to do where do better where are better, be, I set But we think a we we expectation we we're we ago. think think than positioned to

Peter Keith

luck Okay, Good good. sounds the holiday. with

John Swygert

Peter. Thanks,

Operator

you. Thank

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

question, please? Your

Edward Kelly

kind afternoon. for Good a back I'm guys. hi, just you just us. could Yeah, step curious of take if

of what I'm were then kind QX, looked us Because sort a to when you the you could way what happened comps seven. I on had the was reported to hoping period First, you guided like five timing the third of as it throughout that. And your staff of no you the curious through, understand to quarter. cadence here. the visibility about of after you And help presumably to of some

up kind So this the how of the I'm then, of ends just to think And what into curious worked that its stores. normalization as way all of progressed, looking timing like? and you

John Swygert

four the rates enough we of were wanted pay. at just couldn't have August. into weren't arrival on moving to Ed, the that's Yeah, at a Obviously, week basis, out the where didn't fast we end clear portion earlier we day XX goods, quarter. call XX But expected normal We of and I today. we're would see have weeks than probably we probably a them of the the XX visibility day, moving at

decisions quarter pipeline to shift heater get sales holiday making So gears we moving to had mid to some into the and to the goods sales. start the make be bigger and able the

quite needed earlier, little was we wanted bit many to moving So as the should we we in we just that were as just a to be get were, to moved and the opportunistic where were have something to be level we hindsight, we cans, at moved but we at. trying that be

we next will wanting position. to in be year, to which move a So in earlier I'd hindsight, be better

next terms in in bodes us for year for QX holiday that results. selling confidence well season only QX I think of our for and our the

Edward Kelly

a disruption think your chain way that when And, when up and its working occurring ends sales disruption lot the do supply can of that? opportunity And capitalize your being you that's around the on starts you into opportunity today? when

John Swygert

of you few to opportunities, January opportunities these the these have Ed, them I in after started say bulk of that our merchants arise. season. holiday the would would later a or start probably tell will But

Beach there cancel needs there's didn't think somebody product other on what's XX in they that'll so ships who be who that category some I something the and holiday take order. Long prior It's get they for them season still won't knows out their them. or

So those to cancel capitalize well-positioned I are think on we orders.

tell of happening. take time available become to little But year related would should they to us. a available of this a pretty for will deals XXXX lot to Sometimes supply that a us bit good become that's to disruption be I chain you

Edward Kelly

Thank Okay. you.

John Swygert

Ed. you, Thank

Operator

you. Thank

the from question comes Bank of Jason of Our America. from line next Haas

Your question, please?

Jason Haas

Great. Thanks question. for taking my

addition in So you're you that the may chain mentioned signs supply your pressure. issues, that some customer under be seeing to

some factors. mentioned You inflationary

I'm just regards to more about talk could if curious in you what that. So little seeing you're bit a

John Swygert

Jason less seeing to this obviously about And business a our consumables. less of again. necessarily regards end the income. we mere have XX%, -- they have John consumable XX% are just frequently, disposable we shopping low from customer. customers that we is know not we organization, With have fact that those are a We're

discretionary lot a more have in the side. We

but people the to are are feel is coming level down. good. believe as stop the a have to may food they prices, folks selectively feeling going side, the used income on increased effect are they little inflationary to. the people either still somewhere higher that with right pretty But frequently be crunched not So trading do who making gas continue down they one not And bit feeling now trade coming else, started to -- with and being are or pressures still as we prices,

see than money not So of we're coming, people at down amount have still they're and one crunched that's feeling dealing point, bit getting a more because trade not seeing of our to they and we'd yet. this are little the they're like we're business with them here like decent side just

Jason Haas

Got it. ask also made. sense. some That then makes I And the wanted changes that of you've strategic to about

know talked about I So powder the strategy. dry in we've past, the

call, had of times made. taking changes stores I one think per being week some chain deliveries to you that in to mentioned the were other some last down and the supply

progress curious those just about that I'm made So the on initiatives. you've

Eric van der Valk

Eric Valk. van I'll it. Jason, Sure, is take der this

some at progress ground quarter. and the buildings, Texas of well. upgraded And throughput exceeded and those Texas three which the team, into a We the over really, have general the that's quarter. made progress level of level the historical over make we've hit their last over included primarily facilities, to leadership made the in all as the teams significant continue as the now course and managers, sprint, of achieving course they're in a progress, high. We running indicated, the individuals supervisory Georgia And including the QX, weeks managers John tremendous and several

well, disappointed it as So pretty building QX. the toward though even end headed us is happy of where that

each was stop the terms to deliveries we of each week. change process or each truck what changes, to truck store half just we're two one make which with In delivery took we we did, sure a in remember and what a week store pleased store each delivery two frequency to to truck to consolidated

product, They're two. as they're all they're getting or the same amount simplifies distribution easier rather well sort apart It side the the the delivery as delivery versus than store days same operation. the on on to seven getting one operation in side So four getting work the now simplifies an days. three a task but freight, one every which of on

quickly and get investments. to sort product capital won’t to We some So we're and too that’s taking accommodate making related. But additional progress side the some worked We're talked as investments with on the about equipment happy on the handling operation ensure this constraints improve any how I or primarily capacity possible. the handling on we productivity in as account for last the related and commerce, all we're store to to We're related detail store other material call in relatively there. as that progress We're material flows making well enhancements also side in into additional much there. making make that to to change, merged as are handling material sure also needed that out. making changes into to human throughput

holiday of later we was going expected of us now, and little in in level well in project to probably QX, these throughput for help business. is a now are performing Jason, our that productivity level looking of to this The be enhancements have QX. effectively business QX. already biggest managing of a will beginning the that to us properly new than help time to But buildings will so grow. some a be we We’re We're expected the done manage get more to expense at that us

So gives the those center, but as supporting a growth stores, enhancement, additional John it And about fairly and the significant are mentioned which is company throughput then progressing. expansion well. the us New also throughput, propelling to of distribution York the primarily

be more to QX throughput running up that Jason? well pleased lot support the real will to additional question, standpoint, and us pursuing as give be That we're from as by year, have So answers a that next able to stores. going of we're that capacity a

Jason Haas

Yeah, open Maybe powder in another for longer. John, I on it just the keeping to if one buyers could does. dry squeeze open

move you any curious you Just that strategy, do the to still of environment? chain stuff been the of supply in think or about caused right if it's reconsider this type

John Swygert

than think dry important sector definitely one I that's it. in, that to strategy is very committed we're the so Yeah, we the closeout powder operate

and dry times for and timely to the have buyers gets challenging goods what's getting a manage coming more us to it struggling little confusing and they make in when, During difficult because with to the powder adjustments. gets are

to is right powder full. looking So more back bought flow we're to dry buyers deal The the are stable now. pretty get strong,

inventory the like to sure not to as it. I'd is best powder dry into in see buyers secure the order doing with to So the boxes. get now had challenges the need make the are as they their we've dry all But necessarily we what right

powder we'll right for away concept is XXXX. January. And bought probably they're up and to two get from months back now, pretty here So December dry powder dry in much

Jason Haas

Thanks. That's it. Got color. helpful

John Swygert

Thanks, Jason.

Eric van der Valk

forgot some other Jason, warehouse mention as that the to happy We're investments quickly technology and it. of results management in add enhancing system handheld because just some I very to in system well the to QX. the we continue with We've management in investments, installed warehouse make automation work.

as So we're well. continuing to make IT investments

Jason Haas

you. Thank Great.

Operator

Thank you.

Our the next Lejuez Paul from from line question Citi. comes of

please? question, Your

Paul Lejuez

direct you would sales to also what of on seasonal domestically Thanks. you more this directly Hey, guys, more relative imports fourth guys and sourced in curious than import to I'm curious year there what heaters a relying was do what quarter. normally if toys, your do closeouts? and are percent curious percent And the of decision goods

John Swygert

that's business to regards a closeouts. concerted necessary with more our categories, you Paul, have to that in make more want to more import we light. our concerted to more business, We are heavy not buy effort have we did continuity. make know, effort part And purchases. very we it’s in certain not did of annualized certain in But try Imports of bring XX% imports continuity try seasons to imports. there to is never in important seasons it's annualized, any very imports, it’s But to imports. approximately bring to the of bring certain any definitely run

we coming much in is with on so XX% pressure get products, repeat bring our normally it's don't the did. get want normal of don't to to the continue so it do a in going on in put that push import closer was so we So inventory And arriving XX%, to purchases ability This to want to don't the we we domestic want QX, less on of of right back future, way what some the have closeout, that regards our our we that. that side to to to late around we'll to in XX% year the XX%, or our domestic source basis. definitely XX% of because

a controlled I of very year evenly bit headache we've there. it with the had but a little us causes And delays other it the historically, very, pretty and So consistent, this it forgot. question

Paul Lejuez

of heaters and answered What percent toys, you’ve that. Thought seasonal.

John Swygert

we number not the but I toys for that business sure We normally is, and you the don't don't in break what the breakout seasonal tell looks I'm that out, heaters. like know what would QX, Paul,

Jay Stasz

get I don't in think, about typically can but X%, we X% it, it QX. talk up to

Paul Lejuez

Which seasonal? part

Jay Stasz

No.

So say up X% toys I the and fourth would together seasonal to it quarter, be combined, XX%. ramp can probably in could

Paul Lejuez

Or Got to clear, getting you it. late and you like you're And are those completely? feel I'm margin? sales sure at just just do make missing maybe lower then a them

John Swygert

sales missing not completely. definitely Paul,

just good amount a it and the had of to be. inventory, weren't we we have We levels at want

give at to shipped $XX in of of million you of and in get for to million in November less stores we we to the we end I'll QX, the instance, So the at quarter, about the had inventory wanted out end the month us $XX stock.

in a portion to month us of our at. in what wanted we the it and missing sales obviously because as it’s of So be hurt that, well. But of slowed November just QX really

Paul Lejuez

it. Got luck. Good Thank you.

John Swygert

you. Thank

Operator

Instructions] next line with Craig-Hallum. Our [Operator you. from comes Thank the from question Jeremy Hamblin

please? question, Your

Jeremy Hamblin

it sounds chain And some making ask like supply Thanks. to wanted investments I your in technology infrastructure. you're

don't do some maybe inventory into to thinking have the shipments additional lot staffed? happened think do of you QX the a going the timing and we you and this, potentially given to fact the mismatch timing that flow on terms of Eric, that the of carries you about a much the staffing that have going staffing And, you're way technology in In like, How competitors so here, on maybe what's do? can infrastructure of drag you to your are have forth? given feel and adequately QX, into really like on side that you business, feel do of you're answer

Eric van der Valk

the Sure, some Ollie's. forward. now a from unique continue that's we're Jeremy, challenged human throughput we do meet of the move I’ll mitigate capital needs very to technology are as standpoint. give to answer. we're throughput, business We and to the enhancements have And additional obviously making believe These through where risk even we not as to move environment us to we

was throughput drive I Is should how related at it technology. it as know general? I beyond more your Or of look IT. additional about was to our if that our it's to I it? question specifically business terms in needs So take staffing don't

Jeremy Hamblin

not more staffing you're typically, distribution your staffing QX, downshift level the levels store shelves. at in on of stocking same type have related the No, volume like the because your to handling going even to in centers, you're your and

about. wanted what just to So, I'm get asking really sense a that's

Eric van der Valk

the seeing be we we been our able of levels, front driving the staffing on seasonal maintain with to us. We've moment, risk it's we're it comfortable for more challenge our a should so been business. to although we're a As the hiring challenged fairly as season, certainly to this business. in out continue not moved But holiday

to business. So I’d holiday distribution in the we stores be to study adequately we that also continue appropriately will and we forces answer to out to move the drive question, ensure we're be that continuing wage the to and staffed and react there We're staffed confident market as pressure market through centers. the the

John Swygert

Georgia we've are actually associates, very hiring very with DCs in a great push and the excited hit job at continue issue. new our that levels really Yeah, one think we've our capital I of we're the in about not Texas ability we QX of the operate had and working is through in DC challenge the for takeaways levels Pennsylvania we’re need that of the product the network. getting order the we and close. issue imports imports timing they throughput the to was human hiring well, overall very us the how we affected to big It the and will a done is get on and domestic to to DCs

throughput So out now. the can ship can more handle. stores DCs and process than is much the wiped The issue pretty

the XX% of So we've imports network. the of we to And headache of us has XX% in accomplished just big that number. with a through working last that the that $X.X and the the business accomplish want still DC the caused piece we're now

to So have better. setup we're to we focus on going We better. didn't we got it can And do That's right and we'll to continue all it. get say.

Jeremy Hamblin

taking the wishes. for Great. Thanks Best question.

Eric van der Valk

you. Thank

Operator

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

John Swygert

and continued happy Thanks, earnings support. next call. wish forward you and your safe We on operator. participation you, quarter our results very season, to a everyone sharing for look fourth holiday you and our Thank with

Operator

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

disconnect. You may day. now Good

Ollie's Bargain Outlet (OLLI) 3 Dec 212021 Q3 Earnings call transcript