OLLI Ollies Bargain Outlet Holdings Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report: June 5, 2024

(Date of earliest event reported)

(717) 657-2300

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐.

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On June 5, 2024, Ollie’s Bargain Outlet Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended May 4, 2024. A copy of the press release is furnished as Exhibit 99.1 to this current report and is incorporated by reference herein.

The information furnished in this Item 2.02 of on this Form 8-K, including the exhibit attached, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

 

(d) Exhibits.  The following exhibits are filed with this report:

 

Exhibit No.		Description
99.1		Press Release issued on June 5, 2024 of Ollie’s Bargain Outlet Holdings, Inc.
104		Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

EXHIBIT INDEX

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Exhibit 99.1

Ollie’s Bargain Outlet Reports

 First Quarter Fiscal 2024 Financial Results

~  Comparable Store Sales increased 3.0% ~

~  Earnings per Share increased 50.0% to $0.75 ~

~  Adjusted Earnings per Share increased 49.0% to $0.73 ~

~ Raising Fiscal Year Sales and Earnings Outlook ~

 

First Quarter Summary:

 

 

 

 

 

 

 

 

 

John Swygert, Chief Executive Officer, stated, “We are extremely pleased with our performance this quarter. Our team is executing at a very high level, offering amazing deals to our customers, delivering consistent financial results, and investing in future growth. Our first quarter comparable store sales, total revenue, gross margin, and expenses were all better than expected, demonstrating the strength of our business. Consumers clearly remain under pressure and are seeking value in their purchases. Our unique business model is delivering exceptional values on the branded merchandise that our customers want and need, at prices 20 to 70 percent below the fancy stores. Everyone loves a Bargain and Bargain is our middle name.”

First Quarter Results

Net sales increased 10.8% to $508.8 million in the first quarter of fiscal 2024 as compared with net sales of $459.2 million in the first quarter of fiscal 2023. The increase in net sales was the result of new store unit growth in addition to a comparable store sales increase of 3.0%.

Gross profit increased 17.2% to $209.4 million in the first quarter of fiscal 2024 from $178.6 million in the first quarter of fiscal 2023. Gross margin increased 220 basis points to 41.1% in the first quarter of fiscal 2024 from 38.9% in the first quarter of fiscal 2023. The increase in gross margin was primarily due to favorable supply chain costs and higher merchandise margin.

Selling, general, and administrative expenses increased 9.3% to $142.4 million in the first quarter of fiscal 2024 from $130.3 million in the first quarter of fiscal 2023. The increase was primarily driven by higher selling expenses related to increased store count. As a percentage of net sales, SG&A decreased to 28.0% in the first quarter of fiscal 2024 compared to 28.4% in the first quarter of fiscal 2023 primarily the result of leverage of fixed expenses on the increase in comparable store sales.

Operating income increased 46.6% to $56.5 million in the first quarter of fiscal 2024 from $38.5 million in the first quarter of fiscal 2023.  Operating margin increased 270 basis points to 11.1% in the first quarter of fiscal 2024 from 8.4% in the first quarter of fiscal 2023.

Net income increased 49.6% to $46.3 million, or $0.75 per diluted share, in the first quarter of fiscal 2024 compared with net income of $31.0 million, or $0.50 per diluted share, in the first quarter of fiscal 2023.  Adjusted net income⁽¹⁾ increased 47.0% to $45.2 million, or $0.73 per diluted share, in the first quarter of fiscal 2024 from $30.8 million, or $0.49 per diluted share, in the first quarter of fiscal 2023.

Adjusted EBITDA⁽¹⁾ increased 40.3% to $69.4 million in the first quarter of fiscal 2024 from $49.5 million in the first quarter of fiscal 2023.  Adjusted EBITDA margin⁽¹⁾ increased 280 basis points to 13.6% in the first quarter of fiscal 2024 from 10.8% in the first quarter of fiscal 2023. Adjusted EBITDA excludes non-cash stock-based compensation expense.

Balance Sheet and Cash Flow Highlights

The Company's cash and cash equivalents and short-term investments were $341.5 million as of the end of the first quarter of fiscal 2024 compared with cash and cash equivalents of $275.5 million as of the end of the first quarter of fiscal 2023. The Company had no borrowings outstanding under its $100 million revolving credit facility and $92.0 million of availability under the facility as of the end of the first quarter of fiscal 2024. The Company ended the period with total borrowings, consisting solely of finance lease obligations, of $1.7 million as of the end of the first quarter of fiscal 2024.

During the first quarter of fiscal 2024, the Company invested $25.0 million of cash to repurchase 336,934 shares of its common stock. As of the end of the first quarter, the Company had $60.6 million of remaining capacity under its current share repurchase program.

Inventories as of the end of the first quarter of fiscal 2024 increased 5.9% to $527.5 million compared with $498.0 million as of the end of the first quarter of fiscal 2023, driven by new store growth.

Capital expenditures were $26.9 million in the first quarter of fiscal 2024, primarily related to the development of the Company’s new distribution center in Princeton, IL, the remodeling of existing stores, and the development of new stores.

Subsequent to the first quarter of fiscal 2024, the Company entered into an asset purchase agreement to acquire eleven former 99 Cents Only Stores locations for $14.6 million in connection with 99 Cents Only Stores’ bankruptcy proceedings. Of the eleven store locations, three of these are owned properties and eight are leased properties with favorable rent and leasing structures, located in key markets across Texas. The purchase price for this acquisition will be funded by cash on hand and the acquisition is expected to close in early June.

 

Fiscal 2024 Outlook

Our outlook for the fiscal year ending February 1, 2025 (“fiscal 2024”) reflects a 52 week year versus 53 weeks in fiscal 2023. The Company is raising its sales and earnings outlook for fiscal 2024. A comparison of new and previous outlook figures is contained in the table below:

 

 

Executive Promotions and Appointments as Part of Anticipated Leadership Succession

In a separate press release issued today, Ollie’s Bargain Outlet announced a number of executive promotions, appointments, and anticipated changes as part of the Company’s succession plan, including:

 

Conference Call Information

About Ollie’s

We are America’s largest retailer of closeout merchandise and excess inventory, offering Real Brands and Real Bargain prices®!  We offer extreme value on brand name products in a variety of departments, including housewares, food, books and stationery, bed and bath, floor coverings, toys, health and beauty aids, and more. We currently operate 518 stores in 30 states and growing! For more information, visit www.ollies.us

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections, the outlook for the Company’s future business, prospects, financial performance, including our fiscal 2024 business outlook or financial guidance, and industry outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, capital market conditions, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including, but not limited to, supply chain challenges, legislation, national trade policy, and the following: our failure to adequately procure and manage our inventory, anticipate consumer demand or achieve favorable product margins; changes in consumer confidence and spending; risks associated with our status as a “brick and mortar” only retailer; risks associated with intense competition; our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all; fluctuations in comparable store sales and results of operations, including on a quarterly basis; factors such as inflation, cost increases and energy prices; the risks associated with doing business with international manufacturers and suppliers including, but not limited to, potential increases in tariffs on imported goods; our inability to operate our stores due to civil unrest and related protests or disturbances; our failure to properly hire and to retain key personnel and other qualified personnel; changes in market levels of wages; risks associated with cybersecurity events and the timely and effective deployment, protection and defense of computer networks and other electronic systems, including email; our inability to obtain favorable lease terms for our properties; the failure to timely acquire, develop, open, and operate, or the loss of, or disruption or interruption in the operations of, any of our centralized distribution centers; risks associated with our lack of operations in the growing online retail marketplace; risks associated with litigation, the expense of defense, and potential for adverse outcomes; our inability to successfully develop or implement our marketing, advertising and promotional efforts; the seasonal nature of our business; risks associated with natural disasters, whether or not caused by climate change; outbreak of viruses, global health epidemics, pandemics, or widespread illness; changes in government regulations, procedures and requirements; and our ability to service indebtedness and to comply with our financial covenants together with each of the other factors set forth under the heading “Risk Factors” in our filings with the United States Securities and Exchange Commission (“SEC”). Any forward-looking statement made by us in this press release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.  Ollie’s undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.  You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

 

Investor Contact:

John Rouleau

ICR

Media Contact:

Tom Kuypers

Senior Vice President – Marketing & Advertising

717-657-2300

Ollie’s Bargain Outlet Holdings, Inc.

Condensed Consolidated Statements of Income

 

 

(Unaudited)

 

 

Ollie’s Bargain Outlet Holdings, Inc.

Condensed Consolidated Balance Sheets

 

(In thousands)

 

(Unaudited)

 

Ollie’s Bargain Outlet Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

 

(In thousands)

 

(Unaudited)

 

Ollie’s Bargain Outlet Holdings, Inc.

 

Supplemental Information

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

(Dollars in thousands)

 

(Unaudited)

 

The Company reports its financial results in accordance with GAAP.  We have included the non-GAAP measures of EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per diluted share in this press release as these are key measures used by our management and our board of directors to evaluate our operating performance and the effectiveness of our business strategies, make budgeting decisions, and evaluate compensation decisions.  Management believes it is useful to investors and analysts to evaluate these non-GAAP measures on the same basis as management uses to evaluate the Company’s operating results. We believe that excluding items that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude from net income and net income per diluted share, enhances the comparability of our results and provides a better baseline for analyzing trends in our business.

 

The tables below reconcile the most directly comparable GAAP measure to non-GAAP financial measures: net income to adjusted net income, net income per diluted share to adjusted net income per diluted share, and net income to EBITDA and adjusted EBITDA.

Adjusted net income and adjusted net income per diluted share exclude excess tax benefits related to stock-based compensation, which may not occur with the same frequency or magnitude in future periods. We define EBITDA as net income before net interest income or expense, depreciation and amortization expenses and income taxes. Adjusted EBITDA represents EBITDA as further adjusted for non-cash stock-based compensation expense and gains on insurance settlements.

 

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative to or substitute for, the Company’s financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the Company's financial position, results of operations and cash flows and should therefore be considered in assessing the Company's actual financial condition and performance. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies.

Ollie’s Bargain Outlet Holdings, Inc.

Supplemental Information

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 (In thousands except for per share amounts)

 

 (Unaudited)

 

Reconciliation of GAAP net income to adjusted net income

 

Reconciliation of GAAP net income per diluted share to adjusted net income per diluted share

(1)

Components may not add to totals due to rounding.

Ollie’s Bargain Outlet Holdings, Inc.

Supplemental Information

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 (Dollars in thousands)

 

 (Unaudited)

 

Reconciliation of GAAP net income to EBITDA and adjusted EBITDA

 Key Statistics

 

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