Ollie’s Bargain Outlet is making notable strides in the retail sector, recently announcing a 7.8% increase in revenue for its third quarter. The company has strategically leveraged former Big Lots locations to fuel its expansion, a move that comes on the back of the close-out retailer’s consistent growth trajectory.
Throughout the quarter, Ollie’s opened a record 24 new stores, indicating an aggressive approach to growth. This was facilitated by the acquisition of 17 store locations via Big Lots’ bankruptcy proceedings—a strategic masterstroke that not only increases store count but also enhances brand visibility and market share. Specifically, Ollie’s secured 15 leases in the third quarter and two more after the proceedings wrapped up. Furthermore, the company recently outbid competitors to acquire an additional seven former Big Lots store leases.
CEO John Swygert emphasized that during the quarter, the chain capitalized on several real estate opportunities. “These actions have strengthened our new store pipeline and enhanced our competitive positioning for the future,” he noted in a statement. The proactive real estate strategy highlights Ollie’s commitment to maximizing its footprint in the market.
In terms of leadership, a significant transition is on the horizon. Swygert will take on the role of executive chairman in early 2025, with Eric van der Valk stepping in as the new CEO. Van der Valk previously held the position of president and COO, bringing valuable experience from his time as president and COO of Christmas Tree Shops. Swygert has expressed his gratitude towards the team and highlighted his excitement about the company’s growth potential, reiterating that the value proposition remains strong.
The financial performance for the quarter also demonstrated significant gains. Net income rose by 8% to $35.9 million ($0.58 per share), compared to $31.8 million ($0.51 per share) in the same period last year. Analysts had anticipated earnings per share of $0.57, indicating that Ollie’s outperformed market expectations. Operating income reflected a robust rise of 14% to $44.5 million. Despite the promising figures, net sales of $517.8 million slightly missed estimates, although this was still an impressive 7.8% rise over the previous year. Notably, comparable store sales saw a slight decline of 0.5%.
Swygert was quoted saying, “We had another great quarter and are pleased with our results. We delivered strong earnings on higher sales, gross margin, and disciplined expense control.” Such results are the culmination of careful planning and strategic execution, especially in real estate opportunities that fortify the company’s infrastructure and competitive advantage.
Overall, the company achieved a total store count of 546 across 31 states by the end of the quarter, despite having to close three stores—two permanently and one temporarily due to Hurricane Helene. This resilient approach demonstrates Ollie’s capability to adapt and thrive in changing environments.
In conclusion, with substantial growth in revenue and a proactive real estate strategy, Ollie’s Bargain Outlet appears well-positioned for continued success. The leadership transition planned for early 2025 seems set to inject fresh energy into the organization, potentially propelling Ollie’s to new heights in the competitive retail landscape.
