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OLLI Q2 Earnings Beat Estimates on Tariff Refunds, Sales Miss
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Key Takeaways
Ollie's Bargain Q2 adjusted EPS rose 43.4% to $1.42, beating estimates, while sales missed by 1.5%.
Comparable-store sales fell 1.8% as smaller baskets, weather, consumer pressure and promotions hurt demand.
Ollie's Bargain cut its sales outlook but raised EPS guidance to $4.57-$4.65 and buybacks to about $175M.
Ollie’s Bargain Outlet Holdings, Inc. (OLLI - Free Report) reported second-quarter fiscal 2026 adjusted earnings of $1.42 per share, which improved 43.4% year over year and beat the Zacks Consensus Estimate of $1.14 by 24.6%. Net sales rose 9.1% to $741.3 million but missed the consensus mark of $753 million by 1.5%.
Earnings benefited from IEEPA tariff refunds and lower tariff rates, while the sales increase reflected new-store growth. Comparable-store sales declined 1.8% as average basket size fell, with less favorable weather, consumer pressure and a heightened promotional environment weighing on demand.
OLLI’s Sales Growth Faces Comp Pressure
OLLI opened 15 stores and closed one storm-damaged location during the quarter, ending with 686 stores across 36 states. The store base increased 11.9% from a year earlier and remained the main driver of top-line growth. The company opened 42 stores in the first half of fiscal 2026.
Comparable-store transactions were flat, while the average basket declined. Toys, general merchandise, summer furniture, candy and seasonal decor were the strongest categories. Lawn and garden plus room air represented more than 100 basis points of year-over-year comp pressure, with management indicating that the broader drag was more meaningful because those categories also drive store traffic.
Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise
Ollie’s Bargain said lower-income customers continued to prioritize needs over wants, shop closer to need and make fewer trips. Management defined that cohort at a household income of $65,000 or below. Higher-income customers, defined around $100,000 and above, continued to trade down in search of value.
Ollie’s Army loyalty membership increased 12.7% to 18.1 million. New customer acquisition also increased, while management highlighted continued momentum among shoppers ages 35 to 55, with particular strength in the 35-45 range. Closeout deal flow remained strong, giving the retailer flexibility to adjust category mix and value.
OLLI’s Margins Get a Tariff Refund Boost
Gross margin expanded 360 basis points to 43.5%. IEEPA tariff refunds contributed 380 basis points, while merchandise margin declined primarily because of price investments. Lower tariff rates more than offset elevated transportation costs. Excluding the refund and related price investment, management said gross margin would have been about 40.3%-40.4%.
SG&A expenses increased 80 basis points as a share of sales to 26.6%, reflecting fixed-cost deleverage from the negative comp and higher marketing costs tied to one additional merchandise flyer. Pre-opening expenses fell 42% to $5.2 million on fewer store openings and lower dark-rent expense.
Ollie’s Bargain Strengthens Profitability
Adjusted net income increased 40.3% to $85.4 million. Operating income rose 40.9% to $108.5 million, while adjusted EBITDA climbed 35.5% to $127.1 million. Adjusted EBITDA margin widened 330 basis points to 17.1%.
Beyond the tariff benefit, management cited favorable shrink trends and supply-chain efficiencies as additional support to earnings. The Texas distribution-center expansion was completed during the quarter, and operations have normalized. The Illinois facility expansion is expected to begin in the coming months.
OLLI Leverages Balance Sheet to Fund Growth and Buybacks
Total cash and investments reached $507.1 million, up 10.2% year over year, while inventories increased 10.5% to $704.4 million, primarily to support new-store growth. Capital expenditures totaled $43.3 million, with spending focused on new stores, existing-store improvements and the Texas distribution-center expansion.
OLLI repurchased about $84 million of stock in the quarter and $137.3 million in the first half. The company had $121.5 million remaining under its authorization at quarter-end and continued to carry no meaningful long-term debt.
Ollie’s Bargain lowered its fiscal 2026 net sales outlook to $2.928-$2.941 billion from $2.980-$3.000 billion. Comparable-store sales are now expected to range from flat to up 0.5%, down from the prior view of about 2% growth. The 75-store opening target was maintained, while planned share repurchases increased to about $175 million from $125 million.
The company raised its adjusted earnings outlook to $4.57-$4.65 per share from $4.45-$4.55 and lifted the gross-margin view to about 41.3% from 40.7%. Operating income is now projected at $345-$350 million. Management expects third-quarter comps near flat and fourth-quarter comps up about 1%, while August trends were running ahead of the plan used to set guidance.
Shares of this Zacks Rank #4 (Sell) company have fallen 0.8% over the past three months against the industry’s rise of 7%.
Don’t Miss These Solid Bets
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and EPS calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
Target Corporation (TGT - Free Report) operates as a general merchandise retailer. TGT carries a Zacks Rank #2 (Buy).
The consensus estimate for Target’s current fiscal-year sales and earnings implies growth of 4.7% and 37.7%, respectively, from the year-ago reported figures. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.
Darling Ingredients Inc. (DAR - Free Report) , a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Darling’s current fiscal-year sales suggests an 11.5% jump from the prior-year levels. The consensus estimate for current fiscal-year EPS stands at $6.98, which implies a substantial improvement from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
View the Zacks #1 Rank List
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OLLI Q2 Earnings Beat Estimates on Tariff Refunds, Sales Miss
Key Takeaways
Ollie’s Bargain Outlet Holdings, Inc. (OLLI - Free Report) reported second-quarter fiscal 2026 adjusted earnings of $1.42 per share, which improved 43.4% year over year and beat the Zacks Consensus Estimate of $1.14 by 24.6%. Net sales rose 9.1% to $741.3 million but missed the consensus mark of $753 million by 1.5%.
Earnings benefited from IEEPA tariff refunds and lower tariff rates, while the sales increase reflected new-store growth. Comparable-store sales declined 1.8% as average basket size fell, with less favorable weather, consumer pressure and a heightened promotional environment weighing on demand.
OLLI’s Sales Growth Faces Comp Pressure
OLLI opened 15 stores and closed one storm-damaged location during the quarter, ending with 686 stores across 36 states. The store base increased 11.9% from a year earlier and remained the main driver of top-line growth. The company opened 42 stores in the first half of fiscal 2026.
Comparable-store transactions were flat, while the average basket declined. Toys, general merchandise, summer furniture, candy and seasonal decor were the strongest categories. Lawn and garden plus room air represented more than 100 basis points of year-over-year comp pressure, with management indicating that the broader drag was more meaningful because those categories also drive store traffic.
Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise
Ollie's Bargain Outlet Holdings, Inc. price-consensus-eps-surprise-chart | Ollie's Bargain Outlet Holdings, Inc. Quote
Ollie’s Bargain Sees Mixed Consumer Trends
Ollie’s Bargain said lower-income customers continued to prioritize needs over wants, shop closer to need and make fewer trips. Management defined that cohort at a household income of $65,000 or below. Higher-income customers, defined around $100,000 and above, continued to trade down in search of value.
Ollie’s Army loyalty membership increased 12.7% to 18.1 million. New customer acquisition also increased, while management highlighted continued momentum among shoppers ages 35 to 55, with particular strength in the 35-45 range. Closeout deal flow remained strong, giving the retailer flexibility to adjust category mix and value.
OLLI’s Margins Get a Tariff Refund Boost
Gross margin expanded 360 basis points to 43.5%. IEEPA tariff refunds contributed 380 basis points, while merchandise margin declined primarily because of price investments. Lower tariff rates more than offset elevated transportation costs. Excluding the refund and related price investment, management said gross margin would have been about 40.3%-40.4%.
SG&A expenses increased 80 basis points as a share of sales to 26.6%, reflecting fixed-cost deleverage from the negative comp and higher marketing costs tied to one additional merchandise flyer. Pre-opening expenses fell 42% to $5.2 million on fewer store openings and lower dark-rent expense.
Ollie’s Bargain Strengthens Profitability
Adjusted net income increased 40.3% to $85.4 million. Operating income rose 40.9% to $108.5 million, while adjusted EBITDA climbed 35.5% to $127.1 million. Adjusted EBITDA margin widened 330 basis points to 17.1%.
Beyond the tariff benefit, management cited favorable shrink trends and supply-chain efficiencies as additional support to earnings. The Texas distribution-center expansion was completed during the quarter, and operations have normalized. The Illinois facility expansion is expected to begin in the coming months.
OLLI Leverages Balance Sheet to Fund Growth and Buybacks
Total cash and investments reached $507.1 million, up 10.2% year over year, while inventories increased 10.5% to $704.4 million, primarily to support new-store growth. Capital expenditures totaled $43.3 million, with spending focused on new stores, existing-store improvements and the Texas distribution-center expansion.
OLLI repurchased about $84 million of stock in the quarter and $137.3 million in the first half. The company had $121.5 million remaining under its authorization at quarter-end and continued to carry no meaningful long-term debt.
Ollie’s Bargain Resets Sales View, Raises Profit Guide
Ollie’s Bargain lowered its fiscal 2026 net sales outlook to $2.928-$2.941 billion from $2.980-$3.000 billion. Comparable-store sales are now expected to range from flat to up 0.5%, down from the prior view of about 2% growth. The 75-store opening target was maintained, while planned share repurchases increased to about $175 million from $125 million.
The company raised its adjusted earnings outlook to $4.57-$4.65 per share from $4.45-$4.55 and lifted the gross-margin view to about 41.3% from 40.7%. Operating income is now projected at $345-$350 million. Management expects third-quarter comps near flat and fourth-quarter comps up about 1%, while August trends were running ahead of the plan used to set guidance.
Shares of this Zacks Rank #4 (Sell) company have fallen 0.8% over the past three months against the industry’s rise of 7%.
Don’t Miss These Solid Bets
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and EPS calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
Target Corporation (TGT - Free Report) operates as a general merchandise retailer. TGT carries a Zacks Rank #2 (Buy).
The consensus estimate for Target’s current fiscal-year sales and earnings implies growth of 4.7% and 37.7%, respectively, from the year-ago reported figures. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average.
Darling Ingredients Inc. (DAR - Free Report) , a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for Darling’s current fiscal-year sales suggests an 11.5% jump from the prior-year levels. The consensus estimate for current fiscal-year EPS stands at $6.98, which implies a substantial improvement from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.