Ollie’s Bargain Outlet Holdings, Inc. Reports Second Quarter Fiscal 2021 Financial Results
Ollie’s Bargain Outlet reported a second quarter net income of $34.3 million, or $0.52 per diluted share, reflecting a significant decline of 65.5% from $99.4 million, or $1.50 per share, in the same period last year. Total net sales fell by 21.4% to $415.9 million, attributed to a 28.0% decrease in comparable store sales. Despite these challenges, the company achieved a two-year comparable store sales growth of 15.3%. The adjusted EBITDA decreased 45.6% to $54.1 million, with an adjusted EBITDA margin of 13.0%.
- Two-year comparable store sales growth of 15.3%.
- Strong cash position with $444.3 million in cash and cash equivalents.
- Continued store expansion with the opening of 12 new stores.
- Net income decreased 65.5% to $34.3 million.
- Total net sales declined 21.4% from the prior year.
- Adjusted EBITDA dropped 45.6% to $54.1 million.
~ Company Achieves 2-Year Comparable Store Sales Stack of +
~ Strong Earnings Flow-Through, Resulting in Diluted EPS of
HARRISBURG, Pa., Aug. 26, 2021 (GLOBE NEWSWIRE) -- Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ: OLLI) (the “Company”) today reported financial results for the second quarter ended July 31, 2021.
“We are very pleased with our results for the second quarter as we delivered comparable store sales growth of
Second Quarter Summary:
- Total net sales decreased
21.4% to$415.9 million . - Comparable store sales decreased
28.0% from the prior year increase of43.3% , resulting in a two-year stack of positive15.3% . - The Company opened 12 new stores, ending the quarter with 409 stores in 28 states, a year-over-year increase in store count of
11.7% . - Operating income decreased
50.3% to$45.7 million and operating margin decreased 640 basis points to11.0% . - Net income was
$34.3 million , or$0.52 per diluted share, as compared with$99.4 million , or$1.50 per diluted share, in the prior year. - Adjusted net income(1) was
$34.0 million , or$0.52 per diluted share, as compared with prior year adjusted net income of$68.9 million , or$1.04 per diluted share. - Adjusted EBITDA(1) decreased
45.6% to$54.1 million and adjusted EBITDA margin(1) decreased 580 basis points to13.0% .
Mr. Swygert continued, “We continue to face strong year-over-year comparisons in the third quarter as we, once again, delivered record sales and profits last year. For the third quarter of fiscal 2021, we expect comparable stores sales growth of
(1) As used throughout this release, adjusted net income, adjusted net income per diluted share, EBITDA, adjusted EBITDA and adjusted EBITDA margin are not measures recognized under U.S. generally accepted accounting principles (“GAAP”). Please see the accompanying financial tables which reconcile GAAP to these non-GAAP measures.
Fiscal 2021 Guidance
The Company continues to monitor the impact of the COVID-19 pandemic on the broader economy and, more specifically, its associates, customers, business partners and supply chain. Given the uncertainties regarding the pace of economic recovery, consumer behavior and consumer demand amidst the ongoing pandemic, the Company is continuing its practice of not providing guidance for fiscal 2021.
Second Quarter Results
Following the onset of COVID-19 in early fiscal 2020, the Company’s stores remained open to serve its customers while several other retailers and competitors were closed for a portion of the second quarter of fiscal 2020. The Company effectively responded to changing consumer needs in the quarter, creating a strong alignment between a value-driven merchandise assortment and customer demand, and benefited from initial consumer spending in response to federal stimulus funds for the pandemic. As a result, the Company experienced record sales and profits in the second quarter of fiscal 2020.
Net sales in the second quarter of fiscal 2021 totaled
Gross profit decreased
Selling, general and administrative expenses increased marginally to
Pre-opening expenses related to new stores increased to
Operating income totaled
Net income decreased
Adjusted EBITDA(1) totaled
Balance Sheet and Cash Flow Highlights
The Company's cash and cash equivalents balance as of the end of the second quarter of fiscal 2021 was
Inventories as of the end of the second quarter of fiscal 2021 increased
Capital expenditures in the second quarter of fiscal 2021 totaled
During the second quarter of fiscal 2021, the Company invested
Conference Call Information
A conference call to discuss second quarter fiscal 2021 financial results is scheduled for today, August 26, 2021, 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 #7495397. 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 416 stores in 28 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 2021 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 our status as a “brick and mortar” only retailer; 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, transportation and shipping challenges, and potential increases in tariffs on imported goods; outbreak of viruses or widespread illness, including the continued impact of COVID-19 and continuing or renewed regulatory responses thereto; our inability to operate our stores due to civil unrest and related protests or disturbances; our failure to properly hire and to 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; risks associated with natural disasters, whether or not caused by climate change; and our ability to service indebtedness and to comply with our financial covenants together with each of the other factors set forth under the heading “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
Jean.Fontana@icrinc.com
Media Contact:
Tom Kuypers
Senior Vice President – Marketing & Advertising
717-657-2300
tkuypers@ollies.us
Ollie’s Bargain Outlet Holdings, Inc.
Condensed Consolidated Statements of Income
(In thousands except for per share amounts)
(Unaudited)
| Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||
| July 31, | August 1, | July 31, | August 1, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||
| Condensed consolidated statements of income data: | ||||||||||||||
| Net sales | $ | 415,881 | $ | 529,313 | $ | 868,373 | $ | 878,676 | ||||||
| Cost of sales | 252,846 | 322,471 | 522,728 | 531,468 | ||||||||||
| Gross profit | 163,035 | 206,842 | 345,645 | 347,208 | ||||||||||
| Selling, general and administrative expenses | 110,119 | 109,149 | 214,489 | 198,869 | ||||||||||
| Depreciation and amortization expenses | 4,669 | 4,122 | 9,153 | 8,066 | ||||||||||
| Pre-opening expenses | 2,541 | 1,545 | 5,076 | 5,267 | ||||||||||
| Operating income | 45,706 | 92,026 | 116,927 | 135,006 | ||||||||||
| Interest expense (income), net | 66 | (26 | ) | 41 | (109 | ) | ||||||||
| Income before income taxes | 45,640 | 92,052 | 116,886 | 135,115 | ||||||||||
| Income tax expense (benefit) | 11,317 | (7,331 | ) | 27,343 | 2,276 | |||||||||
| Net income | $ | 34,323 | $ | 99,383 | $ | 89,543 | $ | 132,839 | ||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | 0.53 | $ | 1.53 | $ | 1.37 | $ | 2.07 | ||||||
| Diluted | $ | 0.52 | $ | 1.50 | $ | 1.36 | $ | 2.02 | ||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 65,311 | 65,137 | 65,407 | 64,093 | ||||||||||
| Diluted | 65,825 | 66,051 | 65,972 | 65,641 | ||||||||||
| Percentage of net sales (1): | ||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Cost of sales | 60.8 | 60.9 | 60.2 | 60.5 | ||||||||||
| Gross profit | 39.2 | 39.1 | 39.8 | 39.5 | ||||||||||
| Selling, general and administrative expenses | 26.5 | 20.6 | 24.7 | 22.6 | ||||||||||
| Depreciation and amortization expenses | 1.1 | 0.8 | 1.1 | 0.9 | ||||||||||
| Pre-opening expenses | 0.6 | 0.3 | 0.6 | 0.6 | ||||||||||
| Operating income | 11.0 | 17.4 | 13.5 | 15.4 | ||||||||||
| Interest expense (income), net | - | - | - | - | ||||||||||
| Income before income taxes | 11.0 | 17.4 | 13.5 | 15.4 | ||||||||||
| Income tax expense (benefit) | 2.7 | (1.4 | ) | 3.1 | 0.3 | |||||||||
| Net income | 8.3 | % | 18.8 | % | 10.3 | % | 15.1 | % | ||||||
| (1) Components may not add to totals due to rounding. | ||||||||||||||
Ollie’s Bargain Outlet Holdings, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| July 31, | August 1, | ||||||
| Assets | 2021 | 2020 | |||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 444,262 | $ | 305,110 | |||
| Inventories | 373,550 | 327,164 | |||||
| Accounts receivable | 824 | 2,447 | |||||
| Prepaid expenses and other assets | 8,214 | 22,539 | |||||
| Total current assets | 826,850 | 657,260 | |||||
| Property and equipment, net | 142,299 | 137,467 | |||||
| Operating lease right-of-use assets | 395,195 | 369,842 | |||||
| Goodwill | 444,850 | 444,850 | |||||
| Trade name | 230,559 | 230,559 | |||||
| Other assets | 2,337 | 2,462 | |||||
| Total assets | $ | 2,042,090 | $ | 1,842,440 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt | $ | 298 | $ | 320 | |||
| Accounts payable | 92,798 | 107,685 | |||||
| Current portion of operating lease liabilities | 72,339 | 56,062 | |||||
| Accrued expenses and other | 80,428 | 77,521 | |||||
| Total current liabilities | 245,863 | 241,588 | |||||
| Revolving credit facility | - | - | |||||
| Long-term debt | 610 | 592 | |||||
| Deferred income taxes | 65,934 | 64,254 | |||||
| Long-term operating lease liabilities | 330,565 | 317,948 | |||||
| Other long-term liabilities | 4 | 5 | |||||
| Total liabilities | 642,976 | 624,387 | |||||
| Stockholders’ equity: | |||||||
| Common stock | 66 | 66 | |||||
| Additional paid-in capital | 658,899 | 641,677 | |||||
| Retained earnings | 815,810 | 616,410 | |||||
| Treasury - common stock | (75,661 | ) | (40,100 | ) | |||
| Total stockholders’ equity | 1,399,114 | 1,218,053 | |||||
| Total liabilities and stockholders’ equity | $ | 2,042,090 | $ | 1,842,440 | |||
Ollie’s Bargain Outlet Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
| July 31, | August 1, | July 31, | August 1, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net cash provided by operating activities | $ | 1,723 | $ | 168,824 | $ | 41,846 | $ | 210,194 | |||||||
| Net cash used in investing activities | (5,335 | ) | (5,671 | ) | (14,747 | ) | (18,045 | ) | |||||||
| Net cash (used in) provided by financing activities | (24,293 | ) | 22,606 | (29,963 | ) | 23,011 | |||||||||
| Net (decrease) increase in cash and cash equivalents | (27,905 | ) | 185,759 | (2,864 | ) | 215,160 | |||||||||
| Cash and cash equivalents at beginning of period | 472,167 | 119,351 | 447,126 | 89,950 | |||||||||||
| Cash and cash equivalents at end of period | $ | 444,262 | $ | 305,110 | $ | 444,262 | $ | 305,110 | |||||||
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 EBITDA, adjusted EBITDA, adjusted EBITDA margin, 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: 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 net income and adjusted net income per diluted share exclude excess tax benefits related to stock-based compensation, 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.
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.
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
| Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
| July 31, | August 1, | July 31, | August 1, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net income | $ | 34,323 | $ | 99,383 | $ | 89,543 | $ | 132,839 | |||||||
| Excess tax benefits related to stock-based compensation(1) | (358 | ) | (30,501 | ) | (2,453 | ) | (31,748 | ) | |||||||
| Adjusted net income | $ | 33,965 | $ | 68,882 | $ | 87,090 | $ | 101,091 | |||||||
(1) Amount represents the impact from the recognition of excess tax benefits pursuant to Accounting Standards Update 2016-09, Stock Compensation.
Reconciliation of GAAP net income per diluted share to adjusted net income per diluted share
| Thirteen weeks ended | Twenty-six weeks ended | |||||||||||||||
| July 31, | August 1, | July 31, | August 1, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income per diluted share | $ | 0.52 | $ | 1.50 | $ | 1.36 | $ | 2.02 | ||||||||
| Adjustments as noted above, per dilutive share: | ||||||||||||||||
| Excess tax benefits related to stock-based compensation | (0.01 | ) | (0.46 | ) | (0.04 | ) | (0.48 | ) | ||||||||
| Adjusted net income per diluted share (1) | $ | 0.52 | $ | 1.04 | $ | 1.32 | $ | 1.54 | ||||||||
| Diluted weighted-average common shares outstanding | 65,825 | 66,051 | 65,972 | 65,641 | ||||||||||||
| (1) Totals may not foot due to rounding | ||||||||||||||||
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
| Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||
| July 31, | August 1, | July 31, | August 1, | ||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||
| Net income | $ | 34,323 | $ | 99,383 | $ | 89,543 | $ | 132,839 | |||||
| Interest expense (income), net | 66 | (26 | ) | 41 | (109 | ) | |||||||
| Depreciation and amortization expenses | 6,094 | 5,653 | 12,012 | 11,063 | |||||||||
| Income tax expense (benefit) | 11,317 | (7,331 | ) | 27,343 | 2,276 | ||||||||
| EBITDA | 51,800 | 97,679 | 128,939 | 146,069 | |||||||||
| Non-cash stock-based compensation expense | 2,312 | 1,727 | 4,332 | 3,046 | |||||||||
| Adjusted EBITDA | $ | 54,112 | $ | 99,406 | $ | 133,271 | $ | 149,115 | |||||
Key Statistics
| Thirteen weeks ended | Twenty-six weeks ended | ||||||||||||||
| July 31, | August 1, | July 31, | August 1, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Number of stores open at the beginning of period | 397 | 360 | 388 | 345 | |||||||||||
| Number of new stores | 12 | 6 | 23 | 23 | |||||||||||
| Number of closed stores | - | - | (2 | ) | (2 | ) | |||||||||
| Number of stores open at end of period | 409 | 366 | 409 | 366 | |||||||||||
| Average net sales per store (1) | $ | 1,024 | $ | 1,454 | $ | 2,173 | $ | 2,441 | |||||||
| Comparable stores sales change | (28.0 | )% | 43.3 | % | (9.3 | )% | 20.2 | % | |||||||
| Comparable store count – end of period | 354 | 313 | 354 | 313 | |||||||||||
(1) Average net sales per store represents the weighted average of total net weekly sales divided by the number of stores open at the end of each week for the respective periods presented.
FAQ
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