Ollie's Bargain Outlet Sets Sights on Market Share with Record Store Openings
In a call to discuss its financial results for the first quarter of fiscal year 2025, Ollie's Bargain Outlet announced that it has opened a record 25 new stores in Q1, surpassing even its own expectations.
According to Eric van der Valk, President and Chief Executive Officer of the company, this marks a significant milestone for the discount retailer. 'We are delivering accelerated growth,' he stated during the conference call. 'Our team has done an amazing job navigating a dynamic environment while delivering strong financial results.'
Notably, most of these new openings were former Big Lots locations, which have been integrated into Ollie's existing store portfolio with impressive success. The company's decision to prioritize these openings has yielded a 'warm box' effect, where customers who previously shopped at Big Lots are now flocking to the discount retailer. This strategy appears to be paying off, as sales in these newly opened stores have been strong.
Ollie's also reported solid financial results for Q1, with total sales, comparable store sales and adjusted earnings all exceeding expectations. Despite facing the headwind of Big Lots' final liquidation, which impacted some selling, general and administrative expenses (SG&A), the company beat its forecast on both the top and bottom lines.
The closeout market remains fluid, with many factors influencing deal flow. However, Ollie's flexible operating model allows it to be selective in what it purchases from thousands of vendors. This agility has enabled the company to navigate a choppy environment and capitalize on opportunities that other retailers might miss.
In response to market trends, Ollie's is aggressively pursuing market share by accelerating its store growth, expanding digital marketing capabilities and enhancing its customer loyalty program. The company has already demonstrated a strong track record with its Ollie's Army program, which accounts for more than 80% of sales and sees loyal customers spend close to 40% more per visit.
As the retail landscape continues to evolve, Ollie's is well-positioned to take advantage of changing market conditions. Its adaptability, coupled with a deep understanding of its customer base, will undoubtedly serve it well as it aims to capture more share in an increasingly competitive discount retail space.
For investors and analysts following Ollie's progress, these developments suggest that the company is indeed poised for sustained growth. As Eric van der Valk noted during the conference call, 'We understand this customer base because we are this customer.' This commitment to serving its loyal customers with unparalleled value has long been a hallmark of Ollie's success story.
