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    OLLI
    Earnings call· Jan 2026(Q4 FY26)

    Ollie's Bargain Outlet Holdings Q4 FY26 earnings call OLLI

    Mar 12, 2026 Source

    Executive summary

    Ollie's Q4 FY26 — Record Store Openings and Strong Comp Sales

    Ollie's concluded an exceptional FY25 with robust Q4 results, marked by record store openings, strong loyalty program growth, and solid comparable store sales. The company is at an inflection point, introducing a new long-term growth algorithm targeting 10% unit growth, 2% comp growth, and mid-teens EPS growth, supported by increased share repurchases. While navigating minor headwinds from new store productivity and weather, Ollie's is focused on strategic merchandise adjustments and marketing optimization to sustain profitable growth.

    Highlights

    5

    • Opened a record 86 stores in FY25, significantly higher than the previous record of 50 stores.

    • New memberships in the Ollie's Army loyalty program increased 23%, and the total customer file grew by more than 12%.

    • Net sales increased 17% to $779 million in Q4 FY26.

    • Comparable store sales increased 3.6% in Q4 FY26, driven by both basket and transactions.

    • Adjusted earnings per share increased 17% to $1.39 in Q4 FY26.

    Concerns

    4

    • New store sales were slightly below plan in Q4 FY26, attributed to the soft opening strategy and higher engagement of Ollie's Army members during the holiday season.

    • Gross margin of 39.9% in Q4 FY26 was 80 basis points lower than last year, primarily due to planned investments in price.

    • Severe winter weather in Q4 FY26 caused significant store closures and disruptions, particularly impacting new stores.

    • The lowest income cohorts showed some weakness, though this was more than offset by trade-down from upper income cohorts.

    Guidance & targets

    17
    CategoryTargetConfidence
    Annual comparable store sales growth
    2%
    high materiality
    High
    Annual gross margin
    40.5%
    high materiality
    High
    EPS growth
    mid-teens
    high materiality
    High
    Unit growth
    10%
    high materiality
    High
    Share repurchases (as % of FCF)
    approximately 50%
    high materiality
    High
    New store openings
    75
    high materiality
    High
    Net sales
    $2.985 billion to $3.013 billion
    high materiality
    High
    Comparable store sales growth
    2%
    high materiality
    High
    Gross margin
    40.5%
    high materiality
    High
    Operating income
    $339 million to $348 million
    high materiality
    High
    Adjusted net income
    $270 million to $277 million
    high materiality
    High
    Adjusted net income per share
    $4.40 to $4.50
    high materiality
    High
    Depreciation and amortization expenses
    $63 million
    medium materiality
    Medium
    Preopening expenses
    $22 million
    medium materiality
    Medium
    Annual effective tax rate
    approximately 25%
    medium materiality
    Medium
    Diluted weighted average shares outstanding
    approximately 61.4 million
    medium materiality
    Medium
    Capital expenditures
    $103 million to $113 million
    high materiality
    High

    Operational metrics

    26
    Net sales
    $779 millionincreased 17%
    Q4 FY26

    Driven by new store openings and comparable store sales growth.

    Comparable store sales growth
    3.6%
    Q4 FY26

    Driven by an increase in both basket and transactions.

    Comparable store sales growth (basket contribution)
    2/3
    Q4 FY26

    Basket led with basket taking kind of 2/3 of it and transactions 1/3.

    Comparable store sales growth (transactions contribution)
    1/3
    Q4 FY26

    Basket led with basket taking kind of 2/3 of it and transactions 1/3.

    Gross margin
    39.9%80 basis points lower than last year
    Q4 FY26

    Above plan for the quarter, but largely due to planned investments in price.

    SG&A expense as % of net sales (adjusted)
    24.2%decreased 40 basis points
    Q4 FY26

    Excluding $5 million one-time expense related to executive chairman equity awards in prior year. Driven by leverage of fixed costs from comp sales increase and marketing optimization.

    Preopening expenses
    $2.3 milliondecreased 53%
    Q4 FY26

    Driven by earlier timing of new store openings this year versus last year.

    Adjusted net income
    $85 millionincreased 16%
    Q4 FY26
    Adjusted earnings per share
    $1.39increased 17%
    Q4 FY26
    Adjusted EBITDA
    $127 millionincreased 16%
    Q4 FY26
    Adjusted EBITDA margin
    16.3%decreased 10 basis points
    Q4 FY26
    Cash and investments balance
    $563 millionincreased by more than 31% or $134 million
    Q4 FY26
    Long-term debt
    no meaningful
    Q4 FY26
    Capital expenditures
    $18 million
    Q4 FY26

    Majority of spending towards new store openings, existing store improvement, and supply chain investments. Some new stores pulled forward into early FY26.

    Share buyback executed
    $34 million
    Q4 FY26
    Share buyback executed (full fiscal year)
    $74 million
    FY25
    Share repurchase authorization remaining
    $259 million
    Year-end FY25
    New stores opened
    86significantly higher than previous record of 50 stores
    FY25

    All stores opened in the first 3 quarters of FY25. Moved to a soft opening strategy.

    Ollie's Army new memberships growth
    23%
    FY25
    Ollie's Army total customer file growth
    more than 12%
    FY25
    Ollie's Army total members
    17 million
    FY25
    Total stores
    658
    Q4 FY26

    In 35 states.

    States of operation
    35
    Q4 FY26

    Recently entered Minnesota, will enter New Mexico later this year.

    Long-term store goal
    more than 1,300
    Long-term

    Currently at the halfway mark of this goal.

    SG&A leverage at 2% comp
    10 basis points
    Annual

    Expected leverage built into guidance for the new long-term algorithm.

    Dark rent expense
    $5 million
    FY25

    Related to Big Lots locations, not all incremental.

    Industry KPIs

    6
    MetricValueDetails
    Aur basket—
    Comparable sales3.6%%
    Credit card revenue—
    Regional market performance—
    Subscription membership program17 millionmembers
    Operating income EBIT and adjusted EBITDAOperating income: $339 million to $348 million; Adjusted EBITDA: $127 millionUSD

    Product announcements

    2
    ProductTypeDetails
    Ollie's credit cardlaunch
    Expanded furniture offeringsexpansion

    Risks & headwinds

    5
    Severe winter weather impactQ4 FY26 (around Black Friday, Ollie's Army Night, and end of January)

    significant number of store closures and disruptions

    Mitigation: None stated, but noted impact on comps and new store sales.

    New store sales underperformanceQ4 FY26

    slightly below plan

    Mitigation: Studying the flattening of the reverse waterfall from soft opening strategy; impacts shape of curve, not long-term productivity.

    Lower income cohort weaknessCurrent

    a little bit weak

    Mitigation: Offset by trade-down from upper income cohorts.

    Tariff situation volatilityOngoing

    current lower levels could be temporary

    Mitigation: Expect to mitigate any margin pressure from tariffs; company benefits from disruption.

    Decline of print mediaOngoing

    in decline for many, many years

    Mitigation: Optimizing marketing through dynamic media mix model, reallocating spend to higher return channels, reducing reliance on print.

    What to watch in Q1 FY27

    5

    New store productivity

    Next quarter and beyond
    CurrentSlightly below plan in Q4 FY26
    TargetImproved productivity, long-term curve not impacted

    Why it matters

    New store performance is key to achieving unit growth and overall sales targets, especially with accelerated openings.

    While comp store sales were ahead of expectations, new store sales were slightly below our plan. This was a different trend than the rest of the year as our new stores outperformed expectations in the first 3 quarters.

    Q&A highlights

    6

    What is the thought process behind the new 2% comp target and the confidence in sustaining it?

    Eric explained that the company is at an inflection point due to accelerated growth, approaching $3 billion in sales, and its growing size and scale. This leads to better access to merchandise and deals, allowing for more deliberate steering of category mix and flexible buying. These factors give confidence in the sustainability of the 2% comp target.

    “We do believe we're at an inflection point. We -- with the accelerated growth last year and looking at $3 billion in sales for next year, our growing size and scale is leading to better access to merchandise and deals.”

    asked by Peter Keith · answered by Eric van der Valk

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Objectives and FY25 Achievements

    Ollie's successfully met ambitious goals in FY25, including opening a record 86 stores, enhancing the Ollie's Army loyalty program with a 23% increase in new memberships, and leveraging its growing buying power for better merchandise access. The company also reinvested in critical areas like planning, allocation, marketing, and new store development, and expanded distribution center throughput. These efforts contributed to a strong Q4 FY26 performance, with net sales up 17% to $779 million and adjusted EPS up 17% to $1.39.

    02

    New Long-Term Growth Algorithm

    The company introduced a new long-term growth algorithm targeting 10% unit growth, 2% comparable store sales growth, and mid-teens EPS growth. This algorithm is supported by a commitment to return approximately 50% of free cash flow to shareholders through share repurchases. Management believes this reflects confidence in the business's ability to drive consistent results and capitalize on market opportunities, marking an inflection point for the company.

    03

    Merchandise Strategy and Category Evolution

    Ollie's is strategically adjusting its merchandise assortment, increasing investments in seasonal decor due to market growth and white space, while changing its approach to toys. The company is also testing expanded furniture offerings, seeing it as an adequate replacement for less productive wall-to-wall carpet business in some stores. This move is driven by retail consolidation creating white space in the deep discount furniture market, with early test results being positive.

    04

    Customer Demographics and Value Proposition

    The company is expanding its customer base by attracting a wider demographic, including younger customers through digital marketing, and benefiting from consumers seeking value and trading down. While lower-income cohorts show some weakness, the trade-down from upper-income cohorts more than offsets this. Consumables remain a strong category, and the company's deal flow is described as 'off the charts' due to retail consolidation.

    05

    Real Estate and Store Expansion

    Ollie's entered its 35th state (Minnesota) and plans to enter New Mexico in FY26, aiming for 75 new store openings. With 658 stores, the company is halfway to its long-term goal of over 1,300 stores. The real estate environment remains strong, with outsized store consolidation in the last 1-2 years contributing to accelerated unit growth above the long-term 10% target, which is expected to continue for a couple of years.

    06

    Marketing Optimization

    Ollie's continues to optimize its marketing strategy using a dynamic media mix model, reallocating spend to higher-return channels and reducing reliance on print media. This approach provides greater flexibility to respond to deal flow and seasonality, while maintaining disciplined expense control and improving efficiency. The company has already seen results from this work, with a reduction in marketing spend over the past six months.

    AI-generated summary of the company’s earnings call. Not investment advice.