Ollie's Bargain Outlet Earnings Beat, Trims Sales Outlook

Ollie's Bargain Outlet Holdings Inc. said on 2026-09-02 that it delivered a stronger-than-expected second-quarter performance as new-store openings and tariff refunds supported profit, even as management trimmed its fiscal 2026 sales outlook amid softer traffic and smaller baskets.

Profit Beat Despite Declining Comparable Sales

For the second quarter of fiscal 2026, ended 2026-08-01, Ollie's reported adjusted earnings per diluted share of $1.42, a 43.4% increase year-over-year, and net sales of $741.3 million, up 9.1%. Adjusted EBITDA rose to $127.1 million, lifting the adjusted EBITDA margin to 17.1% of net sales from 13.8% a year earlier, according to the company’s press release. The adjusted EPS exceeded consensus estimates by about $0.28 per share.

Comparable-store sales declined 1.8%, reversing a 5.0% gain in the prior-year quarter. Management said transactions were flat while average basket size fell, citing weather, pressure on lower-income consumers, higher fuel prices, and an elevated promotional environment as factors weighing on traffic and basket size.

Tariff Refunds and Store Growth Boost Margins

Gross margin expanded to 43.5%, about 360 basis points higher than a year earlier, helped by roughly $28 million of tariff refunds under the International Emergency Economic Powers Act (IEEPA). Management described the refunds as temporary and said it would reinvest part of the benefit in price reductions to reinforce its value positioning. Transportation costs remained elevated but were partially offset by the refunds and pricing actions.

The company opened 15 new stores during the quarter and closed one due to storm damage, ending with 686 locations across 36 states, representing nearly 12% year-over-year store growth. It reiterated a full-year target of 75 new openings. Management said the expansion of the store footprint, rather than existing-store strength, primarily drove the sales increase.

Ollie's loyalty program membership grew 12.7% year-over-year to about 18.1 million members. The company repurchased approximately $84 million of stock in the quarter, buying roughly 1.1 million shares and bringing year-to-date buybacks to about $137.3 million. Management characterized the repurchases as a sign of confidence in long-term growth. Pre-opening expenses fell 42% to $5 million, reflecting fewer openings and lower rent costs on unopened or closed stores.

The company updated its fiscal 2026 outlook, trimming its sales forecast while maintaining its emphasis on store growth and margin initiatives. Management cited the temporary nature of the tariff benefit and softer comparable-store sales as reasons for the revision.