Ollie’s Bargain Outlet posts strong quarter; closeout deal flow 'very strong’
Ollie’s Bargain Outlet Holdings Inc. reported better-than-expected third-quarter earnings and sales and raised its full-year outlook as “under pressure” consumers flocked to its stores in search of deals.
“The closeout deal flow is very strong,” said John Swygert, president and CEO. “Consumers remain under pressure and are looking for ways to save money on branded merchandise they need and want in their homes. Manufacturers are creating new and innovative products, changing packaging and sizes, and competing for retail shelf space, which is creating more closeout opportunities.
The close-out retailer’s net income rose 37.8% to $31.8 million, or $0.51 a share, for the quarter ended Oct. 28, from $23.1 million, or $0.37 a share, in the year-ago quarter. Adjusted earnings came to $0.51 a share, topping analysts’ estimates of $0.45 a share.
Sales increased 14.8% to $480.1 million, topping analysts' estimates of $469.6 million. Comparable store sales rose 7.0%. Adjusted EBITDA increased 29.5% to $51 million.
“Our third quarter sales and margins came in ahead of our expectations, driven by strong deal flow, lower supply chain costs, and continued execution throughout the organization,” said Swygert. "We also opened a record 23 new stores in the quarter and saw very healthy new store productivity in the period.”
Ollie’s is currently building a 615,000 -sq.-ft. distribution center in Princeton, Ill. Scheduled to open in 2024, the center is a part of Ollie's nationwide expansion efforts to open more than 1,050 stores and will enable it to enter new states in the Midwest market.
The retailer raised its 2023 earnings outlook to a range of $2.77 to $2.83 a share from its previous estimate of $2.65 to $2.74 a share. Net sales are expected to range from $2.097 to $2.104 billion, up from its previous range of $2.076 to $2.091 billion.
Based in Harrisburg, Penn., Ollie's is America's largest retailer of closeout merchandise and excess inventory, offering brand-name products in departments including housewares, food, books and stationery, bed and bath, floor coverings, toys, and health and beauty aids.
Ollie’s ended the quarter with 505 stores in 30 states.