Ollie’s Q2 comps fall, traffic flat amid continued economic pressure
Ollie’s Bargain Outlet Holdings reported strong second-quarter earnings growth that topped expectations even as sales fell short.
On the earnings, call the Pennsylvania-based close-out retailer noted that lower-income customers were buying closer to need and visiting stores less often. .
“The consumer remains resilient, but increasingly selective in how they choose to spend,” CEO Eric van der Valk told analysts. “Lower-income customers are prioritizing needs over wants, shopping closer to need, and in many cases, delaying discretionary purchases where they can, while higher income customers continue to trade down in search of value.”
He added that many of the same pressures affecting consumers today are also expanding closeout availability.
“Our deal flow remains extremely strong, giving us additional opportunities to sharpen our value proposition,” van der Valk said.
Ollie’s opened 15 new stores during the second quarter and 42 during the first half of the year, putting more than halfway to its full-year target of 75.
“Real estate availability remains very good, van der Valk said during the call.. “We continue to be ahead of the pipeline, and we feel very confident about next year.”
Second Quarter
Ollie’s reported adjusted earnings per share of $1.42 per share for the quarter ended Aug. 1, up 43% from the year-ago period. Analysts had expected adjusted earnings of $1.14. Operating income rose 40.9% to $108.5 million.
Net sales increased 9.1% to $741.3 million, driven by new store growth. Analysts were looking for sales of $756.4 million.
Comparable store sales fell 1.8%, against a 5.0% increase in last year’s second quarter, driven by a decrease in average basket size. The company said less favorable weather, consumer pressure and a heightened promotional environment weighed on demand during the quarter.
Membership in the chain’s loyalty program increased 12.7% during the quarter to 18.1 million members. New customer acquisition also increased, while management highlighted continued momentum among shoppers ages 35 to 55, with particular strength in the 35-45 range.
We delivered strong earnings growth in the second quarter and continued to execute against our key strategic initiatives,” van der Valk stated in the earnings statement. “Comparable store sales declined 1.8% against a challenging multi-year stack. We believe our sales results were negatively impacted by the combination of less favorable weather, continued economic pressure on the consumer, and an elevated promotional environment, which all led to a more challenging backdrop than we originally expected."
Ollie’s lowered its fiscal 2026 net sales outlook to between $2.92 and $2.94 billion, down from its previous forecast of from $2.98 to $3 billion. Comparable-store sales are now expected to range from flat to up 0.5%, compared to its previous estimate of about 2% growth.
The company raised its adjusted earnings per share outlook to a range of $4.57 to $4.65, up from $4.45 to $4.55.
Ollie's ended the quarter with 686 stores in 36 states.
