Ollie's Bargain Outlet Shares Surge 11% on Strong 4Q Sales and Expansion Plans

Ollie's Bargain Outlet Holdings Inc. (OLLI) shares climbed 11% on Wednesday, March 19, 2025, following the release of its fourth-quarter earnings report and an aggressive plan for store growth. The discount retailer reported a 2.8% increase in total net sales for the quarter, reaching $667.1 million, driven by new store openings and a comparable store sales increase of 2.8%. However, the company's earnings per share (EPS) of $1.11 fell short of the analyst estimate of $1.20. Adjusted EPS was slightly higher at $1.19, still below expectations.

The company's financial performance reflects the positive impact of the current economic climate, marked by inflation and a consumer focus on value. Ollie's Bargain Outlet, known for offering "Real Brands and Real Bargain prices," has capitalized on this trend. The company's Chief Executive Eric van der Valk stated, "At a time when consumers need it most, we are delivering unprecedented value through an ever-changing assortment that combines quality, national brands, and pricing in a way that can only be found at Ollie’s." This strategy has helped Ollie's maintain strong financial performance, with a 2.8% increase in comparable store sales in Q4 2024.

Ollie's has accelerated its store expansion plans, opening 75 new stores in 2025, up from 50 in 2024. This aggressive expansion is driven by the acquisition of 40 former Big Lots stores, which aligns with their business and growth strategy. Eric van der Valk noted, "With so many retailers closing stores or going bankrupt in the past year, there are a considerable number of abandoned customers, merchandise, real estate, and talent in the marketplace." This unique opportunity allows Ollie's to strengthen its competitive positioning and broaden its footprint, which is crucial in an inflationary environment where consumers are more price-sensitive.



The company's financial results for the fourth quarter of fiscal 2024 show a net income of $68.6 million, a decrease of 10.4% compared to the previous year. The company opened 13 new stores, ending the quarter with 559 stores, marking a 9.2% increase year-over-year. Pre-opening expenses rose by $3.2 million, impacting earnings by $0.04 per share. Despite these challenges, Ollie's remains confident in its ability to manage these acquisitions effectively and continue its expansion efforts.

Ollie's Bargain Outlet's approach to store expansion and real estate acquisition is characterized by a strategic focus on acquiring former Big Lots store leases, which aligns well with their business and growth strategy. This approach is evident in their acquisition of 40 former Big Lots store leases, bringing the total to 63 locations. Eric van der Valk, President and Chief Executive Officer of Ollie’s, stated, “Everything about these stores lines up well with our business and growth strategy. These locations are the right size, come with favorable lease terms, are located in existing and adjacent trade areas, and have long serviced value-conscious consumers.” This strategy allows Ollie's to capitalize on the unique opportunity presented by the bankruptcy of Big Lots, enabling them to expand their footprint and strengthen their competitive positioning.

In contrast, Signet Jewelers is reducing its mall presence by 10% over the next three years, shifting customers to online sales and non-mall locations. This strategy reflects a different approach to real estate, focusing more on digital transformation and less on physical store expansion. Signet Jewelers Chief Executive J.K. Symancyk said, “Since (the) holiday (season), we increased our depth of assortment at key price points while also benefiting from improved bridal trends. Our overall Q4 performance and lack of growth over the past several quarters informed our new strategy to grow our business.”

Ollie's approach creates several competitive advantages. By acquiring former Big Lots locations, Ollie's can quickly expand its presence in areas that already have a customer base familiar with value-conscious shopping. This strategy also allows Ollie's to benefit from favorable lease terms and existing infrastructure, reducing the costs and risks associated with new store development. Additionally, Ollie's plans to open 75 new stores in 2025, up from 50 in 2024, demonstrating a significant commitment to physical store expansion.

However, this approach also comes with potential disadvantages. The increase in pre-opening expenses and the impact of one-time expenses related to equity awards pose challenges to maintaining profitability. For example, pre-opening expenses increased by $3.2 million or $0.04 per diluted share, resulting from the earlier timing of store openings in fiscal 2025 as compared to 2024, and the dark rent expense associated with the bankruptcy acquired locations. This financial burden could strain Ollie's resources and affect its ability to sustain rapid expansion.

In summary, Ollie's Bargain Outlet's financial performance and market positioning have been positively influenced by the current economic climate, characterized by inflation and a consumer focus on value. The company's strategic acquisitions and expansion plans have enabled it to capitalize on market opportunities and strengthen its competitive positioning. However, Ollie's must navigate rising expenses and competitive pressures to sustain its growth trajectory. As van der Valk stated, "We think there is a unique opportunity to take on some of these assets in a manner that strengthens our competitive positioning, broadens our footprint, and bolsters shareholder returns for years to come. With our expanded supply chain, flexible and resilient operating model, fortress balance sheet, and committed associates, we are ready. WE ARE OLLIE’S!"