Ollie's Comparable Sales Turned Negative 1.8%
The off-price retailer posted $1.42 a share and cut full-year sales guidance to $2.928 billion to $2.941 billion.
Ollie’s Bargain Outlet Holdings (OLLI) saw comparable store sales fall 1.8% in the 13 weeks ended August 1, 2026, reversing a 1.7% gain in the first quarter and a 3.6% gain in the fourth quarter of fiscal 2025. President and Chief Executive Officer Eric van der Valk said the decline was driven by a decrease in average basket size and attributed it to less favorable weather, continued economic pressure on the consumer, and an elevated promotional environment.
Net sales rose 9.1% year over year to $741.3 million, slowing from 14.2% growth in the first quarter and 16.8% in the fourth quarter of fiscal 2025. The increase was driven by new store unit growth.
Gross margin expanded 360 basis points year over year to 43.5%, after an 80-basis-point increase to 41.9% in the first quarter. The second-quarter lift was driven by lower supply chain costs, primarily from IEEPA tariff refunds and lower tariff rates, with IEEPA refunds contributing 380 basis points. Selling, general, and administrative expenses as a percentage of net sales rose 80 basis points year over year to 26.6%, after being flat at 28.6% in the first quarter; the increase reflected deleverage of fixed costs from the comparable-sales decline and higher marketing costs from one additional merchandise flyer. Pre-opening expenses fell 42.0% year over year to $5.2 million.
Adjusted EBITDA was $127.1 million, or 17.1% of net sales, versus 13.3% of net sales in the first quarter and 16.3% in the fourth quarter of fiscal 2025. Adjusted net income per diluted share increased 43.4% year over year to $1.42, after a 21.3% increase in the first quarter and a 16.8% increase in the fourth quarter of fiscal 2025. Net income was $85.5 million.
The company opened 15 new stores and closed one related to storm damage, ending the quarter with 686 stores in 36 states, an 11.9% year-over-year increase. That compared with 27 openings in the first quarter and zero in the fourth quarter of fiscal 2025; year-over-year store growth was 15.1% in the first quarter and 15.4% in the fourth quarter. Ollie’s Army loyalty members increased 12.7% to 18.1 million.
Total cash and investments were $507.1 million. The company invested $84.0 million to repurchase 1.107 million shares in the second quarter, after $53.4 million of repurchases in the first quarter. At quarter-end, $121.5 million remained available under the current authorization.
Van der Valk said consumers continue to seek value and that the same pressures affecting customers are creating buying opportunities across the closeout market. The company continues to see strong deal flow and remains committed to reinvesting in price.
The company is updating its outlook for fiscal 2026 ending January 30, 2027. It lowered full-year net sales guidance to $2.928 billion to $2.941 billion from $2.980 billion to $3.000 billion and comparable store sales growth to 0% to 0.5% from about 2%, after having raised earnings-per-share guidance in the first quarter. The current outlook includes IEEPA tariff refunds of $28.3 million received in the second quarter, of which the company intends to reinvest in pricing actions.
Full-year gross margin guidance was raised to about 41.3% from about 40.7%. Operating income is now guided at $345 million to $350 million, adjusted net income at $275 million to $279 million, and adjusted net income per diluted share at $4.57 to $4.65. Share-repurchase guidance was raised to about $175 million from about $125 million. New store openings remain at 75, and capital expenditures remain at $103 million to $113 million.