Q2 2026 Ollie's Bargain Outlet Holdings Inc Earnings Call Transcript
Key Points
- Strong earnings growth in Q2 2026, with adjusted EPS up 43% to $1.42 and adjusted EBITDA up 36% to $127 million.
- Gross margin expanded 360 basis points to 43.5%, driven by IEEPA tariff refunds.
- Opened 15 new stores in Q2 and 42 in the first half, on track to meet the full-year target of 75.
- Ollie's Army membership grew 13% year-over-year, reaching over 18 million members.
- Deal flow remains strong, providing opportunities to sharpen value proposition and secure quality closeout inventory.
- Completed Texas distribution center expansion, with Illinois expansion planned to support future growth.
- Strong balance sheet with $507 million in cash and no meaningful long-term debt, allowing for opportunistic share repurchases ($84 million in Q2).
- Comparable store sales declined 1.8% in Q2, impacted by unfavorable weather, economic pressure on consumers, and an elevated promotional environment.
- Lower-income customers are shopping less frequently and prioritizing needs over wants, leading to softer discretionary sales.
- Weather-sensitive categories, such as lawn and garden and room air, were significant drags on comp sales, with a direct impact of over 100 basis points.
- Merchandise margin decreased due to investments in price, reflecting a competitive promotional landscape.
- SG&A expenses deleveraged by 80 basis points due to fixed cost deleverage from negative comps and higher marketing expenses.
- Full-year comp guidance was lowered to flat to +0.5%, reflecting a more cautious near-term outlook.
- Fuel price pressures continue to impact consumer behavior, particularly in regions with longer drive times, creating a headwind for sales.
Good morning, and welcome to Ollie's Bargain Outlet's conference call to discuss financial results for the second quarter of fiscal year 2026. Please be advised that this call is being recorded and the reproduction of this call, in whole or in part, is not permitted without the express written authorization of Ollie's.
I would now like to introduce our host for today's call, John Rouleau, Managing Director of Corporate Communications and Business Development for Ollie's. John, please go ahead.
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Thank you, Carmen. Good morning, everybody. We appreciate your time and participation. Joining me on today's call from Ollie's are Eric van der Valk, President and Chief Executive Officer, and Robert Helm, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will open the call for your questions. We ask that you please limit yourself to one question so that we can get to as many people as possible within the one-hour time limit
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