Ollie's Bargain Outlet Holdings, Inc. (OLLI)·Q2 2026 Earnings Summary

Executive Summary

• Q2 FY2026 delivered broad-based strength: net sales rose 17.5% to $679.556M, comps +5.0%, and diluted EPS reached $0.99, supported by lower supply chain costs, stronger merchandise margin, and robust deal flow .
• Street beat: revenue exceeded consensus by ~$17.3M ($662.217M* vs $679.556M) and EPS beat by ~$0.06 ($0.9272* vs $0.99); management raised full-year sales, comps, gross margin, operating income, and adjusted EPS guidance .
• Operational highlights: 29 new stores (613 total), Ollie’s Army +10.6% to 16.1M members, and adjusted EBITDA margin expanded 90 bps to 13.8% .
• Key potential stock catalysts: raised FY2025 outlook, comps acceleration into Q3, continued unit growth, and a “fortress” balance sheet providing capacity to capitalize on closeout market consolidation .

What Went Well and What Went Wrong

What Went Well

• “We had a very strong second quarter and are operating with the wind in our sails,” highlighting outperformance across openings, sales, comps, and earnings; full-year guidance raised “across the board” .
• Gross margin +200 bps to 39.9% on lower supply chain costs and higher merchandise margin; categories led by Lawn & Garden, Hardware, Food, Housewares, and Domestics; shrink a tailwind .
• Loyalty and customer acquisition: Ollie’s Army +10.6% to 16.1M; reimagined Ollie’s Days added ~100 bps to Q2 comp with neutral gross margin impact .

What Went Wrong

• SG&A deleverage: +60 bps to 25.8%, attributed primarily to unusually high medical and casualty claims and slightly higher store labor expenses; management expects medical to normalize over time .
• Pre-opening expense increased $4.4M to $9.0M, including ~$2.3M of dark rent associated with bankruptcy-acquired stores; paybacks for acquired stores are longer given upfront costs .
• Gross margin decelerated vs Q1 (41.1% → 39.9%), and guidance embeds conservatism for H2, including maintaining elevated shrink assumptions despite recent tailwinds .

Financial Results

KPIs

Note: Q4 cash balances include cash and short-term investments; Q1 and Q2 include cash, short-term, and long-term investments .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We had a very strong second quarter and are operating with the wind in our sails…we are raising our full-year outlook across the board.” — Eric van der Valk .
• “We are committed to maintaining a fortress type of balance sheet…because it helps drive our business.” — Robert Helm .
• “Tariffs have created uncertainty…this has resulted in additional buying opportunities…our inventory was up 20% at the end of Q2, which is a pretty strong indicator of a strong deal flow.” — Eric van der Valk .
• “Ollie’s Army members increased 10.6% to 16,100,000 and we estimate that the revamped Ollie’s Days event added approximately 100 basis points to comp store sales in the quarter.” — Robert Helm .

Q&A Highlights

• Comp cadence: May flat; June accelerated (loyalty event lift); July strongest of the quarter; Q3 comps guided to ~3%, above long-term algo .
• Loyalty event impact: ~100 bps comp lift; neutral gross margin; ~60% surge in customer acquisition; exceeded December event sales despite non-holiday period .
• Gross margin outlook: Conservatism embedded for H2; flexibility to invest in price while meeting Street; Q4 kept in place after an unusually strong prior Q4 >40% gross margin .
• New store economics: Organic paybacks consistent with history; acquired warm boxes have longer paybacks due to dark rent/build-out, but lower rents improve operating margins .
• Capacity: DC expansions in TX and IL (+~200k sqft each, ~+100 stores served) with 5th DC targeted in 3–4 years .

Estimates Context

Note: Street “Primary EPS” for Q4 aligned with adjusted EPS ($1.19), while GAAP diluted EPS was $1.11; management reported adjusted EPS alongside GAAP .

Key Takeaways for Investors

• Momentum intact: Strong Q2 KPIs (comps +5.0%, EPS $0.99) and raised FY2025 guidance point to accelerating top-line and improved profitability into H2 .
• Unit growth inflection: Store openings raised to 85 for FY2025 with warm-box conversions and favorable rent terms supporting operating margins—watch H2 openings cadence for annualization benefits into FY2026 .
• Margin drivers: Lower supply chain costs, strong merchandise margin, and shrink tailwinds underpin gross margin; guidance remains conservative to preserve pricing flexibility .
• SG&A normalization: Elevated medical/casualty claims were a key Q2 headwind; management expects moderation, supporting SG&A leverage in the back half .
• Loyalty flywheel: Ollie’s Days and program enhancements are demonstrably accretive to comps and customer growth; continued focus should sustain traffic and basket .
• Capacity build: DC expansions add service capacity for ~100 additional stores; supports multi-year unit growth with a 5th DC in planning (3–4 years out) .
• Trading lens: Narrative catalysts include raised FY2025 outlook, stronger comps trajectory, and category breadth; monitor tariff developments and shrink assumptions vs actuals into H2 .