Exhibit 99.1

Ollie’s Bargain Outlet Holdings, Inc. Reports Record

Second Quarter Fiscal 2020 Financial Results

~ Comparable Store Sales Increase 43.3% ~

~ Operating Margin Increases 820 Basis Points to 17.4% ~

~ Diluted EPS Increases 294.7% to $1.50 ~

~ Adjusted Diluted EPS Increases 197.1% to $1.04 ~

Second Quarter Summary:

 

 

 

 

 

 

 

 

John Swygert, President and Chief Executive Officer, stated, “We delivered our best quarter in our 38-year history with record top- and bottom-line results.  Our performance reflects the strength of our business model as we remained nimble and responsive to opportunities in the marketplace to meet heightened levels of customer demand during the COVID-19 pandemic.  We executed the Ollie’s formula—buy cheap and sell cheap—and had the right products at great prices.  I am very grateful for the extraordinary contributions of our entire team—our merchants, distribution centers, store support center and store associates—who have worked tirelessly to keep pace with the spike in demand and to ensure the continued health and safety of our customers and each other.”

Mr. Swygert continued, “We continue to be pleased with customer response to our great deals, with comparable store sales trends currently tracking in the high teens.  However, we fully expect sales growth to continue to slow as we progress through the second half of the year.  Due to the uncertainty related to COVID-19, we are not providing guidance for the second half of fiscal 2020.  We remain confident that we are very well-positioned to benefit from the continued disruption in the marketplace as we continue to leverage our strong vendor relationships and the expertise of our teams. It’s the effectiveness of our model, our strong financial position and long-term growth opportunities that keep us very excited about our future.”

 

 

Second Quarter Results

Net sales increased 58.5% to $529.3 million in the second quarter of fiscal 2020 as compared with net sales of $333.9 million in the second quarter of fiscal 2019.  The increase in net sales was driven by a comparable store sales increase of 43.3% and strong new store performance.

The Company experienced robust comparable store sales growth throughout the second quarter of fiscal 2020, driven by higher traffic levels and a significantly larger average basket.  The Company effectively responded to changing consumer needs in the period, creating a strong alignment between a value-driven merchandise assortment and customer demand. The Company also benefited from consumer spending in response to federal stimulus funds for the COVID-19 pandemic and having its stores open during the quarter while several other retailers were closed for a portion of the period.

Gross profit increased 66.8% to $206.8 million in the second quarter of fiscal 2020 from $124.0 million in the second quarter of fiscal 2019. Gross margin returned to historical levels for the period, increasing 190 basis points to 39.1% in the second quarter of fiscal 2020 from 37.2% in the second quarter of fiscal 2019. The increase in gross margin in the second quarter of fiscal 2020 was due to improvements in both merchandise margin, driven by increased markup, and leveraging of supply chain costs as a percentage of net sales.

Selling, general and administrative expenses increased to $109.1 million in the second quarter of fiscal 2020 from $87.4 million in the second quarter of fiscal 2019, primarily driven by an increased number of stores and higher store payroll and variable selling expenses to support the significant increase in sales.  As a percentage of net sales, selling, general and administrative expenses decreased 560 basis points to 20.6% in the second quarter of fiscal 2020 from 26.2% in the second quarter of fiscal 2019.  The decrease was primarily due to significant leverage in payroll and occupancy as well as other fixed costs from the strong increase in comparable store sales as well as continued tight expense controls throughout the organization.  This leverage was partially offset by certain increased expenses, such as premium pay, associated with operating through the pandemic.

Operating income increased 199.3% to $92.0 million in the second quarter of fiscal 2020 from $30.8 million in the second quarter of fiscal 2019.  Operating margin increased 820 basis points to 17.4% in the second quarter of fiscal 2020 from 9.2% in the second quarter of fiscal 2019, primarily as a result of the increase in gross margin and the leveraging of all expense components due to the significant increase in comparable store sales.

Net income increased 294.8% to $99.4 million, or $1.50 per diluted share, in the second quarter of fiscal 2020 compared with net income of $25.2 million, or $0.38 per diluted share, in the second quarter of fiscal 2019.  Diluted earnings per share in the second quarter of fiscal 2020 and fiscal 2019 included a benefit of $0.46 and $0.03, respectively, due to excess tax benefits related to stock-based compensation.  Adjusted net income⁽¹⁾, which excludes these benefits, increased 193.5% to $68.9 million, or $1.04 per diluted share, in the second quarter of fiscal 2020 from $23.5 million, or $0.35 per diluted share, in the second quarter of fiscal 2019.

Adjusted EBITDA⁽¹⁾ increased 164.9% to $99.4 million in the second quarter of fiscal 2020 from $37.5 million in the second quarter of fiscal 2019.  Adjusted EBITDA excludes non-cash stock-based compensation expense.

Balance Sheet and Cash Flow Highlights

The Company's cash and cash equivalents balance as of the end of the second quarter of fiscal 2020 was $305.1 million compared with $78.5 million as of the end of the second quarter of fiscal 2019.  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 second quarter of fiscal 2020. The Company ended the period with total borrowings, consisting solely of finance lease obligations, of $0.9 million compared with total borrowings of $0.8 million as of the end of the second quarter of fiscal 2019.

Inventories as of the end of the second quarter of fiscal 2020 decreased 7.7% to $327.2 million compared with $354.6 million as of the end of the second quarter of fiscal 2019, primarily due to heightened levels of sales productivity throughout the quarter.

Capital expenditures in the second quarter of fiscal 2020 totaled $5.7 million compared with $20.2 million in the second quarter of fiscal 2019.  Prior year expenditures included approximately $9.7 million invested in the construction of the Company’s new distribution center.

 

Conference Call Information

A conference call to discuss second quarter fiscal 2020 financial results is scheduled for today, August 27, 2020, at 4:30 p.m. Eastern Time. Investors and analysts can participate on the conference call by dialing (800) 219-7052 or (574) 990-1029 and using conference ID #1174635.  Interested parties can also listen to a live webcast or replay of the conference call by logging on to the investor relations section on the Company’s website at http://investors.ollies.us/.  The replay of the conference call webcast will be available at the investor relations website for one year.

About Ollie’s

We are a highly differentiated and fast growing, extreme value retailer of brand name merchandise at drastically reduced prices. We are known for our assortment of merchandise offered as Good Stuff Cheap®.  We offer name brand products, Real Brands! Real Bargains!®, in every department, including housewares, food, books and stationery, bed and bath, floor coverings, toys, health and beauty aids and other categories.  We currently operate 370 stores in 25 states throughout half of the United States. 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 2020 business outlook or financial guidance, and industry outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, 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, legislation, national trade policy, and the following: our failure to adequately procure and manage our inventory or anticipate consumer demand; changes in consumer confidence and spending; risks associated with intense competition; our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all; the risks associated with doing business with international manufacturers and suppliers including, but not limited to, potential increases in tariffs on imported goods; outbreak of viruses or widespread illness, including the continued impact of COVID-19 and regulatory responses thereto; our failure to hire and retain key personnel and other qualified personnel; our inability to obtain favorable lease terms for our properties; the failure to timely acquire, develop and open, the loss of, or disruption or interruption in the operations of, our centralized distribution centers; fluctuations in comparable store sales and results of operations, including on a quarterly basis; 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 the timely and effective deployment, protection, and defense of computer networks and other electronic systems, including e-mail; 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 “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:

Jean Fontana

ICR

646-277-1214

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 adjusted operating income, EBITDA, adjusted EBITDA, 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: operating income to adjusted operating income, 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 operating income excludes a gain associated with an insurance settlement. Adjusted net income and adjusted net income per diluted share exclude excess tax benefits related to stock-based compensation and the after-tax gain associated with the insurance settlement, both of 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 as well as the aforementioned gain from an insurance settlement.

 

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.

Reconciliation of GAAP operating income to adjusted operating income

 

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

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

---