Ollie's Bargain Outlet Lifts Outlook

Ollie's Bargain Outlet(NASDAQ:OLLI) reported results on August 28, 2025, delivering net sales of $680 million (up 18% year-over-year), comparable store sales growth of 5%, and adjusted EPS of $0.99 (up 26.9% year-over-year). Management raised its full-year outlook for fiscal 2025, including plans to open 85 new stores and updated net sales guidance to between $2.631 billion and $2.644 billion. This summary delivers key insights into Ollie's aggressive expansion, loyalty-driven growth strategy, and operational execution shaping long-term shareholder value.

Ollie's accelerates store openings and captures market share

Ollie's added 54 new stores in the first half, exceeding its prior full-year record, driven by retail bankruptcies providing prime locations and strong planning execution. The company now operates 613 stores, representing 17% year-over-year unit growth at the end of the second quarter, with new store performance ahead of plan and a raised target of 85 openings, extending Ollie's footprint into 34 states.

"In the first 6 months of the year, we opened 54 new stores. This is over 4x the number of stores we opened in the same period last year. And in just 6 months, we have exceeded our previous full year unit growth high watermark. During the second quarter, we celebrated the opening of our 600th store in New Hampshire and entered our 33rd and 34th states."
— Eric van der Valk, President and Chief Executive Officer

Rapid acceleration in unit growth, capitalizing on distressed retail real estate, enhances Ollie's long-term top-line potential and geographic reach, positioning it as a leading consolidator in the off-price sector.

Loyalty program drives sales and customer retention for Ollie's

Loyalty penetration remains a defining advantage, with Ollie's Army members now exceeding 16.1 million, growing 10.6% year-over-year, and accounting for over 80% of sales. The redesign of the Ollie's Days event catalyzed a nearly 60% surge in weekly customer acquisition during the event week and contributed 100 basis points to comparable sales, while remaining margin neutral.

"We revamped our annual Ollie's Days event to include an exclusive member-only shopping night, and we limited the promotions for the week to Ollie's Army members. By all accounts, the reimagined event was a huge success and exceeded all expectations. First and most importantly, we rewarded our Ollie's Army members and acquired an abundance of new members. Second, the event was accretive to sales and earnings."
— Eric van der Valk, President and Chief Executive Officer

Demonstrated ability to engage and monetize a highly loyal customer base through targeted events and digital strategies strengthens both traffic and spending per visit, underpinning both immediate performance and long-term customer lifetime value.

Margin expansion underscores operational execution and buying power

The company delivered a 200 basis-point year-over-year gross margin increase to 39.9%, supported by lower supply chain costs, improved merchandise margins, and three consecutive quarters of reduced shrink. Ollie's increased cash and investments by over $100 million to $460 million, while maintaining negligible long-term debt, and continues to invest in distribution capabilities and automation to support scale.

"Gross margin increased 200 basis points to 39.9%, and this was better than our expectations. Lower supply chain costs and higher merchandise margins were the primary drivers of the increase. Benefiting merchandise margins in the quarter was strong deal flow and lower shrink."
— Robert F. Helm, Executive Vice President and Chief Financial Officer

Operational discipline, scale-driven sourcing advantages, and supply chain efficiency are translating into higher profitability, giving Ollie's strategic flexibility to reinvest in growth and further buffer against industry volatility.

Looking Ahead

Ollie's raised guidance includes net sales of $2.631 billion to $2.644 billion, 3%-3.5% comparable store sales growth, a gross margin around 40.3%, and adjusted EPS of $3.76 to $3.84, with 85 new store openings targeted. Most remaining store launches are scheduled for the third quarter, while comparable sales in the third quarter are now expected to reach 3%, above the company’s long-term algorithm. Management reiterated a long-term commitment to double-digit annual unit growth and announced incremental investments in distribution network expansions to accommodate an eventual store base in the mid-800s.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool recommends Ollie's Bargain Outlet. The Motley Fool has a disclosure policy.