OLLI - Earnings call 2 2024 | Ollie's Bargain Outlet Holdings, Inc.

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Operator

Good morning, and welcome to Ollie's Bargain Outlet's conference call to discuss financial results for the second quarter of fiscal 2023. [Operator Instructions] Please be advised that this call is being recorded, and reproduction of this call, in whole or in part, is not permitted without express written authorization of Ollie's.

Joining us on today's call from Ollie's management are John Swygert, President and Chief Executive Officer; Eric van der Valk, Executive Vice President and Chief Operating Officer; and Rob Helm, Senior Vice President and Chief Financial Officer. Certain comments made today may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in our fiscal 2022 Form 10-K and fiscal 2023 periodic reports filed with the SEC and the earnings press release.

company are do the to measures. not statements. On call, today call, of update made referring today's we also and undertake the statements as non-GAAP date of this these to Forward-looking certain be financial will any obligation of I GAAP measures will call to non-GAAP closely turn to our earnings comparable included Mr. measures the are in most press those the Reconciliation financial financial release. With that, over Swygert. ahead, sir. go Please

John Swygert

call today. We Jonathan. trends appreciate our Thanks, you, you are and morning, and in positive a We everyone. had pleased Thank good business. the quarter strong joining with our

second our increased to quarter marks our comparable the strong Our margin and were of results margin comparable XX.X%. This positive quarter, quarter EBITDA ahead doubled X.X%, expectations, driven expansion. In than consecutive and sales. sales of fifth our by store sales comp store adjusted store more

second in year our continued better-than-expected earnings the in our and raising sales quarter Given are business, full our and we performance momentum guidance.

second was with Our sales comping quarter broad-based, of strength almost our positive. categories the in XX%

performing best and furniture, our candy, of some hardware, food, categories categories summer garden were surprisingly, Not air softer and housewares. room lawn furniture. and included Our

in temperatures ] it weaker favorable not for July air sales, first offset temperatures [ sales of enough conditioner to during cooler quarter. the were was from the record months While X

to stores. Today, in their hard-earned partner products more saving than and making of values at for day. Suppliers more budgets bargains compared today for has has their are We extreme money step and they on brands time XX% we name are real every always people of brand-name shoppers XX% to with prices, been XX find customers on the and success products recipe our real years. savings they our and retailers. trusted Our every ever, brand use merchandise. into The for a and inventory been looking and traditional focused know know Cheap selling Stuff lives more between savvy closeouts. their and delivering each of Customers they Good consumer foot business is they drastically are than deals on managing reduced sell need excess great one most can dollars. Ollie's in stretching for

years growth continued are better relationships experience many to in stronger of deals. leading closeout Our and to access buying

We deals both are and vendors. a seeing growing availability from of new existing

about closeout This in to sizes, While sales driving all Manufacturers supply changing which chain of gross today. of margin EBITDA double-digit the new execution are better growth, across strong good made account and products, for costs is our to in realign challenges chains, levels of are created our and and shipping organization, creating in innovative to marketing XX% algo again the more are an And and demand. long-term a we consumer resulted we for made very the ability pandemic retailers very all experience. labor reducing has our increased deals, in our and become more a to feel supply once double-digit growth. environment disruptions, efforts, of performance. are changing which packaging return driving customers people, our the inventory will even speak have strong these environment. Outside investments moment, shopping providing exciting some Eric of our normalized

operating to to initiatives. Eric store let over discuss me call our the pass and Now growth

Eric van der Valk

to count a XXX. during opened quarter, in the store John, stores with good bringing opened us XX an everyone. XXX we states. Quarter-to-date, morning, X Thanks, of additional stores, stores ending and We XX have

construction. We our real are store this in target new continued and tracking year XX to the challenges despite estate

remodels plan during remodel we our our to to of us are on to also date, program, We the XX completing bringing stores pace in and stores achieve year. X quarter, to this completing are making XX progress XX

of throughout deserve an the remodel improvements touched showcases flow, program on driving organization. shopping the which updated forward. equally going to productivity strength focused we committed we deal John customers on the tremendous value, and Our our our are and experience, are

are over the margins is for traditional we closeout full continuously help and process improvements built challenges, business manage and to improve business. any making This costs We retail a inconveniences long of our model are term. Running it. is unlike other and

experience differentiator buying strategic is extensive Our and closeout us. a for operating

allows our best the flyer. many to primary customers the to the flyer a version. were our believe print We an and this X-page only We very transitioned new action. format showcase marketing a updated of back ads front, format to more us of pages call communicate This format deals we on focused On streamlined our earlier and year. the of front from stronger

also easier Our therefore, across prominent makes execution. the our store better and nimble associates is It stores business, flyer supply in product locate. us also to in narrower assortment of more areas our key features for as chain including are It ad and, experience many a simplifies operations. more customers buying, customer and

We a design The shopping and new our make see to great our and respond creative designed and weeks extreme few is new customers a experience. it ago. values of to deals, also to launched easier unique visual ads faster for

first over marketing, who our digital consumer significant and Suss, in Limor to influencers number such media continue major was broaden reach ran even impressions. TV, correspondent of video and markets carried featuring a alternative We that media, and our dozen as a content through broadcast segment online. tour, The on well-known radio of provided generated a forms social

to additional chain. to the XX enable to an distribution recently Pennsylvania stores. Turning our We supply expansion completed XX us of which center, service

we is building supporting target marketing, to are stores XXX This of Illinois, to us Midwest. provide X,XXX stores store These growth are long-term to in continue stores improvements the will our in and network to chain, XXX will the distribution us center position flow, fourth service expected deal enable in business. XXX service supply strong open profitable the of for in of investments of our in our or making growth distribution in scale between us we which and XXX additional leg capacity process our well XXXX. more. The along the with to fiscal as our new from next We an also support stores,

[ thank entire turn over success. a Rob, ] I every to Ollie's It us it like our this each takes and team. make business Before would to I of to one

you We in this winning have appreciate the in hardest Rob? out. committed passionately do. We most and working people who to talented and business, all day are day

Robert Helm

and Eric, good everyone. Thanks, morning,

performance continued momentum are with our We the pleased and in strong quarter business. our in

continued raising earnings our strong our comps guidance the better-than-expected expectations, full Our sales we by results year. solid Based performance margin momentum, for of are and and in and expansion. driven came on ahead our

sales new For increased increase store XX.X% to growth. the $XXX driven unit and quarter, net million, X.X% comparable sales store in a by

store of primarily by sales was Army our comp members, growth transactions. increased over Ollie's XX% XX.X sales. Our X.X% driven to representing million

XXX opened stores, ending with in X we quarter, states. the new During stores XX

the are pleased half We of performance our with first new stores.

While chain a sales performed at higher above early, margin last as our flat points have basis line a to costs XXX expenses group, percentage as merchandise year by with in to plan these as expectations, to was of XX.X%. as stores XX.X%, SG&A improved net favorable supply well margins. primarily date. Gross driven

ago on expense As a a versus not incentive year plan. did performance for compensation reminder, based we accrue

in XX.X% Adjusted increased income Excluding XXX% increased $XX to income points. share quarter. XXX EBITDA compared and incentive Adjusted for XXX $X.XX SG&A year. by to margin points increased increased XX.X% points levered to compensation approximately operating $X.XX $XX increased basis basis the XXX% the $XX earnings expense, million to and adjusted adjusted to we XXX% XX Operating million per net margin last quarter. million was to EBITDA basis and

to balance Turning sheet. the

times expansion on of primarily of center $XX lower Our construction distribution for quarter quarter center under revolving the $XXX end. development with new $XXX and Adjusting Inventories million, normalization cash for of our facility lead position our the at these driven in stores, freight in expenditures existing capitalized and by benefit the costs new between the Pennsylvania the remodeling and million growth, remains and cash our investments partially our Illinois. on increased X% strong, the stores, short-term increased outstanding no primarily new items, and were inventory distribution credit by million totaled completion inventory. offset X%. Capital borrowings store our hand to of of of in-transit

we had $XXX we shares total of a XXX,XXX $XX for common the share During our remaining of back of the stock on quarter, our end million current bought million. quarter, At authorization. the repurchase

our growth needs. We our are to to working capital balancing capital while investors committed through returning opportunities share repurchases, and strategic

full year. the outlook to Turning our for

positive first strong earnings and and raising half business, are XXXX. outlook we our for continued trends in fiscal both performance sales our Given our

Diluted of opening in Comparable Operating now million. new For X.X%. of billion the income $XXX expect range a growth to $XXX XX.X% million Gross million of distribution approximately the to The capital X% margin year, excludes our related net $XXX of week, XXrd to closure. which total left the net for million, $X.XXX stores of sales XX.X%. of rate tax share stock-based fourth benefits per annual construction and of which shares expenditures diluted tax the expansion $XXX adjusted distribution average $XX including center. $X.XX of approximately center $X.XX. XX.X%, and to income million outstanding billion. Adjusted of million we full to weighted to of sales net store $X.XXX includes Pennsylvania An our to XX effective X of the of income compensation. and $XXX XX million,

sales includes quarter impact our on the in terms could we less balance commentary approximately full point. third and the the in Based store sales into fourth out Lastly, underlying of business, X raising in positive our quarter. We quarter let our provide of comparable a trends X our store This negatively flow the X% expectations which the advertising year. flat in shift for confident the of percentage ad estimate me on by to third to some quarterly shifts the X%. third the quarter comp from expectation are flyer quarter,

our product are QX comp assortment, expected With our nature slightly of to X% leaving store for the X%. algo unchanged expectation of than now, we ever-changing for comps higher with sales long-term our

expect open which will preopening stores step-up result third new significant in openings, in store at we the Looking XX new to expense. approximately quarter, a in

We so XX have opened quarter. the in third stores far

in margin pattern the for back gross lower more gross gross slightly and the half calls normal slightly this which for will Gross margin expectations follow year, higher in our margin quarter. seasonal fourth quarter unchanged. third Finally, are a the margin

gross supply back much year. last more the first the margin chain compared we half half for lap more to costs and QX as expansion year-over-year expect modest QX We in of normalized

Now back let the John. over to me turn call

John Swygert

who everything Thanks, a everyone. unique dedicated Rob. Ollie's team hard place business requires for do. they operate that Ollie's like extremely for thank In members closing, special We to team I to the would work a entire very make

Everyone has incredible and are partner we keeping customers team teams stores of Our family than stocked success, an merchandised. and our a our doing to assisting more deals, job and grateful our well are XX,XXX members. buying

As we we are say, Ollie's.

That prepared take concludes Operator? to remarks, your and now our are we questions. happy

Operator

Our Instructions] Thomas question comes of KeyBanc. line Brad from first the from [Operator

Bradley Thomas

Congratulations on you as closeout go quarter the I the second to momentum the the little strong talk just bit have a of availability more year. half and about you the into back wanted here.

we how that course, out XXXX, versus you you're you're think the the into the back as were now announcing seeing Can had most history. buys to of back what record only about some just right thinking and the sort all factor think about company's of there As how help you us of not exciting some you comparisons in momentum half? being

John Swygert

do quarter now seen, to been doing this right pretty able to what about deals to based us buying this X% been quarter. and year. our strong has what and percentage we've been point always for and QX that annualize we been we've know a have quarter. and obviously out Deal long the that sometimes have thus with a -- have of the always that and algo extremely we've ad deal in third the into had long-term Last X% going [indiscernible] relationships we're Obviously, say X%, X% deals develop flow pretty We've is for do. far years, we're with we quarter seen numbers over all that's to But deal out of over flow we and time, time. deal in Ollie's deals for our the that hard and of have Brad. taking we're we year, fancy pretty go where positive. full we're came -- years. We we XX a shift, last for the out comfortable sitting by had are And an up store the flow against not above obviously, we the to and out a it's standard to year-over-year raise QX. We seeing Sure, year

where makes coming. feel the have We're everywhere. today, Brad. seeing pretty the we're we momentum they're So it business are comfortable sitting us broad-based, and in And deals the that

So we're in a good position.

Bradley Thomas

if And you I we the the Rob, half. back a reiterated start follow-up exciting. margin guess gross really margin the think ask on I outlook. to I XXXX, That's about for as just you've can talk little strokes, outlook about how about Eric, getting gross could year? next for a back XX% outlook John, thinking talked margin. that you margin bit the maybe broad In you're to believe Rob, about

Robert Helm

that take I'll It's one. Rob.

than the burdened XX.X% year, think by half higher a you When second of the chain guidance of XX.X%. So certainly yes, the was about to be. we half the will supply rate cost reiterated first

for long-term we XX%. that to year algo and for we'll we'll algo our year, 'XX. believe get during very when to the be So positioned this of on we be close believe that of be next And to year, QX

Operator

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

Peter Keith

I'll quarter as give a congratulations on my well. great

you're you John, next to about type in spectacular It's So predict how think on comp to this you predict? heels but of Do algo returning such possible kind year, returning I kind do or talking algo environment? hard too that's over is think about quarter. the guess this of a business this, the of time. to hard lapping just 'XX to of

John Swygert

to is be there feel Yes. next execute long-term comp long [indiscernible] we deals algo XXXX. The return as be being comp. pretty we The obviously, to -- are Peter, do. we'll going to well. consistently, as about this I year And in our to able think I as good the what able

appropriate grow sales plan how built perspective. I I from are and think model. the long-term comp double-digit algo a of to then store sales EBITDA into is And X% X% think to the growth, we

to where XXXX pretty can feel we sitting I that comfortable going we're So today execute.

Peter Keith

versus follow-up I parse really out improvement. to my specifically And the focusing just the of kind Great. Okay. I probably but know it's do, is to backdrop then trying I'm -- execution you've have that perhaps condensed think hard sales the some Is that or how there interesting just to I way maybe driving on quantify sustainability? any think any change. flyers, benefits about, that's an anecdotally, guess

John Swygert

items to I hard and parse what think down very here. quantify we're in able and be out of to very, that's very, trying break to that difference do the the

positive. impact, that don't I So believe to does I out break not that It able positive do it you. -- a is have for but a I'm

Eric van der Valk

we're I'm have And Peter, for the happy tests traffics ran results. very XXX% the we show change, test best question. date the it's When flyer deals, compelling. Eric. saw and more to or format We've formats. We shown proven in that. flyer absolute joking. deals the I quarters, drives would our this did robust answer our excitement X doing customers this are term, that. ultimately, the is now and difference really great we X The at flyer our we it been results It's certainly, think, between this change. with We execution. I'm long flyer pretty just kidding. change, no to

Operator

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

Edward Kelly

could more you [indiscernible] Buyout. about that the most pipeline. [ it little like in a deal you flyer, talk I bit Coleman your saw had looks recent big ] John

-- to on visibility Just of year of you're think, concern lack half from kind you'll back I this, of question, that sort you, we're how stronger 'XX, on Any buying and teed to this up been holiday. And deal like it's and even environment a the like deal that the into but into of year? part at as right, like sort next for of there investors the curious thoughts in as continued about opportunity longer right, what normalized has then talk cycle seeing retail very been there for more you like related good. flow, is

John Swygert

and think change. be -- Yes. a going still to around the for of to people I it. out ] Ed, there's We've it's there step can been there's you, a been the long those that's left and community, I hard relationships. to day to We time. And don't for tell every when long, becoming very each their foster I with vendor get our opportunity I having hands this we've huge us problem hard and deals that we're to a we're meaningful in know don't [ doing the lapping marketplace. with. work dealing very, But foresee size a and continue scale, lot

merchants This So in, is day and is work we that's the every and we how each what to year-over-year. we their our operate. beat do. This numbers strive model

normalized go So we'll and we'll execute to continue more No. over next for to that to able comp? years. numbers. year, the We've number expect outsized to I be done. against, that I be done a comp expect And we've have and deliver an to have do XX it's up what we'll able

past up So were that where The out years we X believe the rough tomorrow. going very dry just sustainable. had the aren't deals issues to is with there, here very, we model in but the COVID

reason terms it. change don't running But And a QX. XX sitting. ton confident QX, in sure then you of we doing we're to guidance clear days, scale but this we know. out in there visibility, hot terms the QX feel want the are very, at In doing the didn't pretty next of right very if is we'll the for few there's that XXX strong. We the make very today in We now let people world because to you that of we're know have we we're we're where momentum visibility seeing

business. supply our what this, want the -- Eric be traditional it's for and of do, is day, for right This the our built position. and and said, and a this. we're we merchant in And team faint we're retailers is with it's as chain And it to lot team So and deal this in of not is inconvenience every each heart. don't what

Edward Kelly

And been don't most Shrink you there talk retailers. you think Do I just follow-up Okay. for you problematic you do this? shrink. about a on quick it. [indiscernible] what [indiscernible]? you're Can any when has have mentioned seeing

Robert Helm

We did on not mention things the This Rob. There couple in is of call. shrink. it a are

First say. retailers. some a that's is shrink a We're to and think lower I us important just percentage model, other relatively than shrink low for

The second year. of the piece we the throughout course is count

sober in last year. pretty as end So we trend coming has on not shrink mobilizing guidance shrink of our terms It's into a for at got date, us better. year about in well a continue it's read as impacted. efforts. To little those the leveled not growing good were we this We significantly bit. thought we'll of off the when work local basis and a worse, any at it And are but stores that regional to on our

Eric van der Valk

Eric. this is Ed,

contribute Just us. over The half XX% shrink. our stores our hyper is to say, issue local add, for relatively percentage it our that small a under of stores, of

it more helps resource the a So that more a into of makes causing and us retention stores more attention direct to lot direct We little us. it. are our resources and problem, around manageable that can lot which for the bit arms have the a XX% and get

Operator

And our from from Konik Randy of line next the question comes Jefferies.

Randal Konik

how -- are around are color to thinking costs where starting getting give on a front. up It's to Maybe, unit seeing bit? perspective out get want construction the to us just a go things us Or to be about there? a pick on come next real starting just estate be a give to around Eric, commentary are -- little that costs, what of back you're things on little build of easier sense they landscape. I maybe And down? around let's bit maybe And growth we year? should some

Eric van der Valk

time and of the where date, estate we're It processes center. Sure, particular, and real But we not but Randy. the about before bankruptcies of pursuing Ollie's very is bankruptcy first. in seeing balance locations filings. should a we open question we tenant it of a locations with model have up what to good this, active auctions. store bankruptcy sheet very To a estate like real pipeline tight for do vacant estate retailers, takes high-traffic for this out and a the real opportunity take market. strong we're in in any be participating in co-tenants materialized becomes that's This very been bit in terms distressed coming very opportunities. We've of closings, sitting. Typically, great of many out that's let See, But choice. feel have me

time. a continues pushing feel then we are we're bandwidth year. And a good that HVAC, in be is cost, So hard. for We it's very Elevated issues, this terms the positioned. inspection-related not or construction, to we giving challenge, we're as whether guidance We're what giving XX not official guide think It's guidance we a challenging but in of the it all realistic, until can challenge, times but control environment whole about or local where XXXX do control. construction. we're We lead contractors. still at

We have than now a better handle we on lead ago. year a did times

the feel that committed can deliver stores we confident we XXXX. So to in XX we've

Randal Konik

Got you.

the past, DCs just I could have in Okay. in because the there's maybe where a with them pain then And maybe I in opened cost -- then of labor Super perspective bit being Rob, the your some you are remind give with John, around maybe, on past, labor respects. Maybe that of other us a guess, in up. talked up front? away when of particularly helpful. point, taking deleverage been you also about DCs competitors, labor can think the little some we kind us, ramping some costs you of DCs And

DC think in up going the I you is Illinois year. said to next open that

thinking this and much opening we be year think pretty DC understand different just again, -- would around then in next year us year? about and level up guidance, be about but helpful thinking to through locked frame feels is maybe out thinking as Just I things be labor high year's next the market should maybe don't -- the for we like it how obviously, need just to next give

Eric van der Valk

can the second. Eric. take of the the and Rob first I'll it's part question take Sure, Randy,

In DCs, in made have years. X wages past wages. in our all made recently of investments investments over couple DCs actually meaningful we in the We

flow candidate Our is very strong.

remains the days Our high. turnover employment first of in XX

So do still people. we churn

So take yes, want part? you Rob, do second the to

Robert Helm

From was, it points say, when we opened distribution or XX a I Sure. historically, center distribution basis would perspective, lower. centers,

as of business. expect, scale next it, in which the However, basis scale, with be this to terms we of offset we're I'd we to call the getting along of should XX in year, half further XX able points back self-help.

Eric van der Valk

probably investments add It's Yes. made to date assumptions. we've to guidance the budgeted our that are wage important wage investments in included

Operator

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

Jason Haas

you could you drivers that the X? It about over Can are gross you a at beyond. year year sounds -- talk it or this what next and like the get bit from XX% margin be XX% expect little

to there? those So just can are about drivers get you talk what

Robert Helm

a really It's story. chain supply

half XX%. on So and XX% supply being the a front and XX% QX front closer half above year for full below this for year, with loaded basis chain it the to is of sales, being

X% As chain the to we'll to historically able get there. our supply be to X% back cost. call that a back algo, we did anticipate don't We

last we level. back wage made a have fuel discussed to is during investments have the the We impact. an still not that will just Domestic pre-pandemic that question

the us tiny that get a to if to headwind. gross range, margin. gets XX% that's But back bit So the a over all of X.X% we X%

Jason Haas

maybe right? big you've seen on have sounds was areas incentive Do It have a that offset on bit reported, the another think flow-through people comp? some you That's on other strong we'd flow-through that you that like that there I And Got see thought SG&A. any the comp. Is better it. offset in that been maybe would follow-up then, strong investing I margins. for little think comp you I the great. Rob, And given of

Robert Helm

No, this that's point over pressure. XX of comp Incentive about points basis XX would basis by comp In lever every points X%. of estimate for right. was roughly we model, to

So good we about feel pretty it.

Operator

the And of Eric comes from Cohen our from Gordon line Haskett. next question

Eric Cohen

just up on I to answer. want that follow last

XXX -- XX basis historically, X% for or You points above X% a said comp. points can of you least that comp. to every leverage basis X% it's get At been

X% what has the So just now? curious changed to

Robert Helm

I increased But would It say within have closer SG&A, you're to, X.X. closer correct, leverage is was it's wage say, the X. X. that to investments point, as

Eric Cohen

Okay.

So think be X%. new [indiscernible] it going not [indiscernible] than just that That's Is this for I year? forward I the would assume?

Unknown Executive

No.

Eric Cohen

just wanted are you producing like down to you But points. at on you but this quarter. in it just above raised midpoint, looks revised prepared the then X%, also came that new earlier ask XXX sales And by by the store basis Okay. the plan. comp new stores remarks looking the productivity comment And -- raised guidance, did at

how of sort curious to So reconcile that?

Robert Helm

than is by lower quarter way timing was the productivity first openings -- store plans New the as that community. [ the that impacts math new ]. store The of analyst the calculated

we happy group, are As a openings. our above with very XXXX They're performing well plan.

Operator

Craig-Hallum. And our next from question Hamblin comes from the Jeremy line of

Jeremy Hamblin

And XX program. I about on to to you remodels this talked about ask year. remodel XX the Congrats wanted results. the strong

strong $XXX sheet that of a balance have buybacks some million still over you've You done. despite here very the

I to something is that but Just nice you're you quite for those talked And lift? the about think mid-single-digit Is next sales wanted yet, still year sense a there wanted that program. of previously remodels capital not think remodel what that you Are gaining allocation, noted $XXX,XXX. cost of could to looks to up. those to potentially you in any filling get $XXX,XXX understand, XX which of terms And you accelerate? the guide change terms I is like? in of new pipeline to stores ready

Eric van der Valk

We're -- happy It's program. range stores to as expect in our has not date, stores guiding similar remodel to 'XX Jeremy, answer. we're either, weren't $XXX,XXX The in of guiding we on 'XX. new remodel a very will it's we'll like many not I'll do we of -- Sure. in changed. still cost the To stores realistic with Eric. how but range it's what terms 'XX $XXX,XXX. in that

that to XX in has response customer in going terms investment. on been expectations XX it's and very, the return range. positive, So The of very have forward similar we

Jeremy Hamblin

me here. last then one And Great. for

then plans geographically, out after about Illinois terms if are for for So timing the look of what you DC rolling have might in the like? what that? you And you are at next next looking thinking DC of year, in terms that, how

Eric van der Valk

several We're for next X-plus somewhere. to DC have be with will of Sure. to The the going in West close in we the kind DC, DCs limit. We're years place looking the sweat X years. the location of the out the probably assets to that

So we although where, haven't around some done it. we've modeling determined

preparing it. for we're So

much -- We that the DC both that Texas. exactly West. And be, and map takeaway X the well. as expandable DCs the haven't have we of on in our determined somewhere Illinois it we have, one will They're Jeremy, is about don't talk too where do we'll but normally

So we we to York, did can just in them New DC. capacity add like

have, that So is that's at Difficulty] Yes, small said, another whether our sweat little of it's one X,XXX like store avenue still was full network I DC we just maturity [indiscernible] point, asset. [Technical to debate add stores. just going something Eric we

Operator

Our Matthew next comes JPMorgan. question Boss of the from line from

Matthew Boss

Congrats on a great quarter.

the we've So you're could in really I the picture, any stands you ago, that is the the today? trade-down continued speak to X spoke I past. Maybe John, then customer about or activity box? you And it's on seeing And year larger a just things headwind comments in where August to you that talked piece across behavior know you're the on then trends momentum second that think that could trade-out that seeing? elaborate business?

John Swygert

second the and one. ] take first on [ can the Eric pipe in let question, I'll Rob then Matt, Yes,

Eric van der Valk

Sure.

are higher to of at or see the a defined $XX,XXX greater. continuing We customer, income down trade

quarters. to It's see similar are So prior X that we versus momentum. continuing the

cohort. Our continues especially new is strong, very be acquisition customer actually, $XXX,XXX-plus in to income the --

value. And those under we're $XX,XXX household terms need that that it's customers would -- value. lower that then out, quarters. that indicate did slightly really cohort see in looking consumer are the for we So trade say We QX of in income in They other the cohort seems versus index income. down income in to

That's a mind, it was ever in in slight. underpenetrate low-income that and Keep Matt, concern we consumers. so not

$XXX,XXX from Our is the largest new $XXX,XXX growth to customer coming specifically. cohort

Robert Helm

accordingly. We're we're comfortable and current with momentum. right and are a the customers flow deal like business in great gave. we our store, positive now And feel from with that responding We great guidance our pleased there's there's perspective, content our

Matthew Boss

the new that John, you, could just on manufacturers relationships then if to seeing continues scale, elaborate then are -- brand awareness maybe the and you on with a walk performance through, Could the for how your openings? you're evolving? you changing fleet And And Great. stores. with how follow-up larger as recent maybe maybe customers most from

John Swygert

the we along relationships. And and first the opportunities one Matt, to to Yes, with and for and we the more come scale community, get that continues thing the to day, relationship to more in and regards merchants we continue business, us. as vendor business do, it's want the we continue each notoriety deal, we transaction our perspective. all community stronger, stronger to focus it from and And our open deals up other have trained a and on This but the not are with build We every it. one is a want business. manufacturing

respect work they'll do and that are back most brand. building say we going outside sold comfortable we So find they of very market with very the that never that is of on continue how to feel Ollie's. and manufactured we us to comfortable brands what are their the -- goods come key. -- do, we're Ollie's And brands they've with relationship the they brand to the And

do other So not really conflicts don't retailers we them best out there. channel give with -- we to our any

Operator

comes next question the Ciccarelli of Scot line from Truist. our from And

Scot Ciccarelli

said I positive. you think of call, on were the your John, XX% categories

how even ] your be category at would of I talking performance. think good ancient is from point, it's I positive, recall one [ XX% comp that you're history, about a

figure XX% how And the outlier the if sales broad-based do is you strength? so, see upside? So often such an on

John Swygert

Scot, the you at hitting I everything, the number, doesn't comp And cylinders. the really environment store deals positive, the outsized in we're an obviously, it being definitely quarter, consumer level. XX% mean to it income, terms Yes, on is though. It's discretionary what but response in that normal. indicator an the to in positive, some the just were I'd given outsized a of we gives living customer and inflation positive. is and a That's for is XX% especially that indication. we're today, all X.X% that's an -- departments comping it strapped performance our execution departments tell with the say more of you normally see little the positive than comping

Scot Ciccarelli

true on then the some And [ we sense. makes the Or XH? That kind XQ. of of comps will in Okay. have comp additional pressure in incentive SG&A up? some Was sort there from ]

Robert Helm

did expense we light as also plan, to year, versus third we underperformed Last accruals historical compensation the level. relative quarter in the incentive second not record starting compensation incentive quarter. in were The

half. We than XX for closer [ It's points a more being second expense half, the second in probably will of the up a XX the quarter. step pressure called points basis basis the pressure QX second in little ] to with So QX. pressure

John Swygert

that I the one think, our that's full for all into And the takeaway, numbers we baked guided year. Scot,

an already to. incremental So guided that's we've what to not

Operator

our And from from comes the of line question UBS. Mark next Carden

Mark Carden

start you Are that question cohort income many they Army to on base? Ollie's talked up much? another Are are for comparable $XXX,XXX seeing you see that to your to trends. your across do signing Basically, expanding at see So trips shopping rates from you about? repeat core you demographic $XXX,XXX customer what

Eric van der Valk

do, We bit there. certainty. Yes. trend your hard we'd visits little be stickiness and in to that there all the to this Army trade-down they're some maybe expect Repeat Ollie's track. answer to with answer a able customer up with It's signing a is questions. be little But early for to to

Mark Carden

of intensifying sales throughout Okay. your terms as Great. cadence a some of And shift you of then progressed, see a just did [indiscernible]? given in the as just it quarter, much follow-up,

Robert Helm

the coming temperatures July as flow sales first month a bit. Sure. up [ was perspective, pretty the ] quarter. really ticked June quarterly is Sure. a of the out sales was of we in velocity warm This AC our May Rob. supported that the same the month. saw strongest quarter From much

Operator

of our question Kate from McShane comes the line Sachs. And next from Goldman

Katharine McShane

Just a during quick quarter. the sales question back from to the us growth

primarily, during the we quarter transactions, and you half of the you by see you talk as that how the year? back playing for can was mentioned. driven ticket to But know out it Just

Robert Helm

Transactions Rob. XX% the is of low this comp. Kate, primarily singles. drove was The comp was remainder it. It basket, about up probably which of was the

Operator

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

Simeon Gutman

you little Can I the a or you How First, run think quickly them? quarter? bit shrink. your follow-up physical are tell what how what often this frequently timing a or what to And than inventories? were better you us you said, got summarize to it of on quick doing rating prior

Robert Helm

course Rob. We store Sure. fleet the is count This of year. throughout the our

through a better, to for slightly we're From So enough an our we are the half significant out year. about call within counted margin quarter. stores. second not as shrink We've impact about of the halfway perspective, the gross

Simeon Gutman

Okay. And the a strength. quick on follow-up sales back

between and we've more? Given maybe and and that towards it value, weight bit that strong, the channel is merchandise Curious kind of is against you traffic I merchandising success closeout seems the the performance of the how seen moving think that. customer consumer a the like value little the seeking strong

John Swygert

Yes.

I think, to is. customers that you, drive the to I the respond we But Simeon, value hard would the deals offer bifurcate tell and customer. that's what to the

they're So now, looking right for deals. the

what and our great and to we're in giving. they're We brands deals have stores responding some great

X and categories, a of coming As through. it's lawn discretionary you not tell with -- furniture, there consumable. There's can garden with our all summer some lot top

we're given them what So to great were what the show they're them. values responding to to able

of on key #X going marketplace. So regardless what's that's the in

Operator

from And Lejuez our Paul of comes the Citi. question line from next

Paul Lejuez

could rate improvement, supply better merchandise quarter? was second within driven have then How margin for just already lower loaded margin on how you And or having the much markup Curious locked promotions? much how that the bit merchandise a more talk about chain lower and by for do initial second, 'XX, F versus year? store was opening next many stores the And if buying plans little in you margin costs improvement? better versus gross from

Robert Helm

XXX From gross lion's roughly and shrink. out XXX improved about This that of perspective, the merchandise margin basis Rob. of flow IMU expansion, the a improvement on margin is was of promotions. share versus supply deal buys points impact of points, of reduced basis points, net chain better was was basis Paul. XXX the Thanks, The our

Paul Lejuez

stores? [indiscernible]

Eric van der Valk

guidance. answer question little a detailed. Yes. We XXXX wouldn't We're to too not maybe that speaking

that realistic stores I for is So XX indicated XXXX.

[indiscernible]. that's so And

John Swygert

we obviously, take We'll you -- future -- generation the give building. not sites, we do on with so second more regards we're calls to

we So our give lead less. lot don't right time XXXX guide want to now. is But any a

XX I is the think around stores next year. for reality

Operator

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

John Swygert

you. back you continued on and interest on forward our call. updating the their year of I good for Ollie's. half progress would and time our like We very in next to thank everyone the our about in feel positioning Thank to earnings look

Operator

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

now Good day. may disconnect. You

Ollie's Bargain Outlet (OLLI) 31 Aug 232024 Q2 Earnings call transcript