What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-06-03 compared with 2024-12-10 · 176 added, 346 removed, 133 unchanged (80% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and

related notes of Ollie’s Bargain Outlet Holdings, Inc.

included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities

and Exchange Commission, or SEC, on March 27, 2024 (“Annual Report”).

As used in this Quarterly Report on Form 10-Q, except where the context otherwise requires or where otherwise indicated, the terms “Ollie’s,” the “Company,” “we,” “our,” and

“us” refer to Ollie’s Bargain Outlet Holdings, Inc.

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and related notes of Ollie’s Bargain Outlet Holdings, Inc.

included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 26, 2025 (“Annual Report”).

As used in this Quarterly Report on Form 10-Q, except where the context otherwise requires or where otherwise indicated, the terms “Ollie’s,” the “Company,” “we,” “our,” and “us” refer to Ollie’s Bargain Outlet Holdings, Inc.

and subsidiaries.

We operate on a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday

nearer to January 31 st of the following year.

We operate on a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday nearer to January 31 st of the following year.

References to “2025” refer to the 52-week period of February 2, 2025 to January 31, 2026.

References to “2024” refer to the 52-week period of February 4, 2024 to February 1, 2025.

References to “2023” refer

to the 53-week period of January 29, 2023 to February 3, 2024.

References to the “third quarter of fiscal 2024” and the “third quarter of fiscal 2023” refer to the thirteen weeks of August 4, 2024 to November 2, 2024 and July 30, 2023 to

October 28, 2023, respectively.

Year-to-date periods ended November 2, 2024 and October 28, 2023 refer to the thirty-nine weeks of February 4, 2024 to November 2, 2024 and January 29, 2023 to October 28, 2023, respectively.

Historical results

are not necessarily indicative of the results to be expected for any future period and results for any interim period may not necessarily be indicative of the results that may be expected for a full year.

References to the “first quarter of fiscal 2025” and the “first quarter of fiscal 2024” refer to the thirteen weeks of February 2, 2025 to May 3, 2025 and February 4, 2024 to May 4, 2024, respectively.

Historical results are not necessarily indicative of the results to be expected for any future period and results for any interim period may not necessarily be indicative of the results that may be expected for a full year.

Cautionary Note Regarding Forward-Looking Statements

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Private Securities Litigation Reform Act of 1995.

Forward-looking statements can be

identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects,” and similar references to future periods, prospects, financial

performance, and industry outlook.

Forward-looking statements can be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects,” and similar references to future periods, prospects, financial performance, and industry outlook.

Forward-looking statements are based on our current expectations and assumptions regarding our business, capital market conditions, the economy, and other future conditions.

Because forward-looking statements

relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.

As a result, our actual results may differ materially from those contemplated by the

forward-looking statements.

regulatory conditions, including, but not limited to, supply chain challenges, legislation, national trade policy, and the following:

our failure to adequately procure and manage our inventory, anticipate consumer demand, or achieve favorable

product margins;

Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.

As a result, our actual results may differ materially from those contemplated by the forward-looking statements.

Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including, but not limited to, supply chain challenges, legislation, national trade policy, and the following:

our failure to adequately procure and manage our inventory, anticipate consumer demand, or achieve favorable product margins;

changes in consumer confidence and spending;

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risks associated with intense competition;

our failure to open new profitable stores, or successfully enter

new markets, on a timely basis or at all;

our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all;

fluctuations in comparable store sales and results of operations, including on a quarterly basis;

factors such as inflation, cost increases and energy prices;

the risks associated with doing business

with international manufacturers and suppliers including, but not limited to, potential increases in tariffs on imported goods;

the risks associated with doing business with international manufacturers and suppliers including, but not limited to, potential increases in tariffs on imported goods;

our inability to operate our stores due to civil unrest and related protests or disturbances;

our failure to

properly hire and to retain key personnel and other qualified personnel;

our failure to properly hire and to retain key personnel and other qualified personnel;

changes in market levels of wages;

risks associated with cybersecurity events, and the timely and effective deployment, protection, and defense of computer networks and

other electronic systems, including e-mail;

risks associated with cybersecurity events, and the timely and effective deployment, protection, and defense of computer networks and other electronic systems, including e-mail;

our inability to obtain favorable lease terms for our properties;

the failure to timely acquire, develop, open and operate, or the loss of, disruption or interruption in the operations of, any of our

centralized distribution centers;

the failure to timely acquire, develop, open and operate, or the loss of, disruption or interruption in the operations of, any of our centralized distribution centers;

risks associated with our lack of operations in the growing online retail marketplace;

risks associated with litigation, the expense of defense, and potential for adverse outcomes;

our inability to successfully

develop or implement our marketing, advertising, and promotional efforts;

our inability to successfully develop or implement our marketing, advertising, and promotional efforts;

the seasonal nature of our business;

risks associated with natural disasters, whether or not caused by climate change;

outbreak of viruses, global health epidemics,

pandemics, or widespread illness, including the continued impact of COVID-19 and continuing or renewed regulatory responses thereto;

outbreak of viruses, global health epidemics, pandemics, or widespread illness;

changes in government regulations, procedures, and requirements;

and our ability to service indebtedness and to

comply with our financial covenants together with each of the other factors set forth under “Item 1A - Risk Factors” contained herein and in our filings with the SEC, including our Annual Report.

Any forward-looking statement made by us in this

Quarterly Report on Form 10-Q speaks only as of the date on which such statement is made.

and our ability to service indebtedness and to comply with our financial covenants together with each of the other factors set forth under “Item 1A – Risk Factors” contained herein and in our filings with the SEC, including our Annual Report.

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date on which such statement is made.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.

undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

You are advised, however, to consult any further

disclosures we make on related subjects in our public announcements and SEC filings.

Ollie’s is a highly differentiated and fast-growing, extreme value retailer of brand name merchandise at drastically reduced prices.

Known for our assortment of products offered as “Good Stuff

Cheap,” we offer customers a broad selection of brand name products, including housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics.

Our differentiated go-to market strategy is

characterized by a unique, fun and engaging treasure hunt shopping experience, compelling customer value proposition and witty, humorous in-store signage and advertising campaigns .

We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

Ollie’s is America’s largest retailer of closeout merchandise and excess inventory.

Our stores sell name brand household related items that consumers use in their everyday lives at prices that are typically 20% to 70% below traditional retailers.

Known for our assortment of products offered as “Good Stuff Cheap®,” we offer customers a broad selection of brand name products, including housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics.

Our differentiated go-to market strategy is characterized by a unique, fun and engaging treasure hunt shopping experience, compelling customer value proposition and witty, humorous in-store signage and advertising campaigns .

Our Growth Strategy

Since the founding of Ollie’s in 1982, our principal growth strategy has been the opening of new stores.

Historically, we have grown organically by backfilling existing markets and leveraging

our brand awareness, marketing and infrastructure to expand into new markets in contiguous states.

More recently, we have expanded through acquiring former 99 Cents Only and Big Lots stores through a bankruptcy auction process.

As of November

2, 2024, we operated a total of 546 stores located in 31 states.

Historically, we have expanded our store base by opening new stores organically.

More recently, we also have opportunistically expanded our store base through acquiring former store locations of distressed or bankrupt retailers through the bankruptcy auction or similar process.

Our growth strategy continuously evaluates the best opportunities in the marketplace and combines organic new store openings with the acquisition of store locations through alternative means.

We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner.

As of May 3, 2025 we have grown to 584 stores in 32 states.

Our stores are supported by four distribution centers, one each in York, PA, Commerce, GA, Lancaster, TX, and Princeton, IL.

In the first quarter of fiscal 2023, the Company acquired land in

Princeton, IL, for the construction of its fourth distribution center and broke ground on construction of our 615,000 square feet facility in April 2023.

We completed the construction of the Princeton, IL distribution center in the second

quarter of 2024 and began shipping product in July 2024.

We completed the construction of our Princeton, IL distribution center in the second quarter of 2024 and began shipping product in July 2024.

With the addition of our fourth distribution center, we believe our distribution capabilities will support up to 750 stores.

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adding members to our senior management team;

expanding the capacity of our distribution centers to their current 3.0 million square feet with the completion of our fourth distribution center in Princeton, IL;

expanding the capacity of our distribution centers to their current 3.0 million square feet;

investing in information technology, accounting, and warehouse management systems.

Our business model has produced consistent and predictable store growth over the past several years, during both strong and weaker economic cycles.

We plan to continue to enhance our

competitive positioning and drive growth in sales and profitability by executing on the following strategies:

We plan to continue to enhance our competitive positioning and drive growth in sales and profitability by executing on the following strategies:

growing our store base;

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We have a proven portable, flexible, and highly profitable store model that has produced consistent financial results and returns.

Our new store model targets a store size between 25,000 to

35,000 square feet and an average initial cash investment of approximately $1.0 million, which includes store fixtures and equipment, store-level and distribution center inventory (net of payables), and pre-opening expenses.

We target new

store sales of approximately $4.0 million in their first full year of operations.

Our new store model targets a store size between 25,000 to 35,000 square feet and an average initial cash investment of approximately $1.0 million, which includes store fixtures and equipment, store-level and distribution center inventory (net of payables), and pre-opening expenses.

We target new store sales of approximately $4.0 million in their first full year of operations.

While we are focused on driving comparable store sales and managing our expenses, our revenue and profitability growth will primarily come from opening new stores.

The core elements of our

business model are procuring great deals, offering extreme values to our customers and creating consistent, predictable store growth and margins.

In addition, our new stores generally open strong, immediately contributing to the growth in net

sales and profitability of our business.

We plan to achieve continued net sales growth, including comparable stores sales, by adding stores to our store base and by continuing to provide quality merchandise at a value for our customers as we

scale and gain more access to purchase directly from major manufacturers.

The core elements of our business model are procuring great deals, offering extreme values to our customers, and creating consistent, predictable store growth and margins.

In addition, our new stores generally open strong, immediately contributing to the growth in net sales and profitability of our business.

We also plan to leverage and expand our Ollie’s Army database marketing strategies.

In addition, we plan to continue to manage our selling, general, and administrative

expenses (“SG&A”) by continuing to make process improvements and by maintaining our strong expense control discipline.

Our ability to grow and our results of operations may be impacted by additional factors and uncertainties, such as consumer spending habits, which are subject to macroeconomic conditions and

changes in discretionary income.

Our customers’ discretionary income is primarily impacted by gas prices, wages, rising interest rates, and consumer trends and preferences, which fluctuate depending on the environment.

The potential

consolidation of our competitors or other changes in our competitive landscape could also impact our results of operations or our ability to grow, even though we compete with a broad range of retailers.

Our key competitive advantage is our direct buying relationships with many major manufacturers, wholesalers, distributors, brokers, and retailers for our brand name closeout products and

unbranded goods.

In addition, we plan to continue to manage our selling, general, and administrative expenses (“SG&A”) by continuing to make process improvements and by maintaining our standard policy of reviewing our operating costs.

Our ability to grow and our results of operations may be impacted by additional factors and uncertainties, such as consumer spending habits, which are subject to macroeconomic conditions and changes in discretionary income.

Our customers’ discretionary income is primarily impacted by gas prices, wages, rising interest rates, inflation, and consumer trends and preferences, which fluctuate depending on the environment.

The potential consolidation of our competitors or other changes in our competitive landscape could also impact our results of operations or our ability to grow, even though we compete with a broad range of retailers.

Our key competitive advantage is our direct buying relationships with many major manufacturers, wholesalers, distributors, brokers, and retailers for our brand name closeout products and unbranded goods.

We also augment our product mix with private label brands.

As we continue to grow, we believe our increased scale will provide us with even greater access to brand name closeout products as major manufacturers seek a single

buyer to acquire an entire deal.

As we continue to grow, we believe our increased scale will provide us with even greater access to brand name closeout products as major manufacturers seek a single buyer to acquire an entire deal.

How We Assess the Performance of Our Business and Key Line Items

We consider a variety of financial and operating measures in assessing the performance of our business.

The key measures we use are number of new stores, net sales, comparable store sales,

gross profit and gross margin, SG&A, pre-opening expenses, operating income, EBITDA and Adjusted EBITDA.

The key measures we use are number of new stores, net sales, comparable store sales, gross profit and gross margin, SG&A, pre-opening expenses, operating income, EBITDA and Adjusted EBITDA.

Number of New Stores

The number of new stores reflects the number of stores opened during a particular reporting period.

Before we open new stores, we incur pre-opening expenses described below under “Pre-Opening

Expenses” and we make an initial investment in inventory.

Before we open new stores, we incur pre-opening expenses described below under “Pre-Opening Expenses” and we make an initial investment in inventory.

We also make initial capital investments in fixtures and equipment, which we amortize over time.

We expect new store growth to be the primary driver of our sales growth.

Our initial lease terms are approximately seven years with options to renew for three to five successive five-year

Our initial lease terms are approximately seven years with options to renew for three to five successive five-year periods.

Our portable and predictable real estate model focuses on backfilling existing markets and entering new markets in contiguous states.

Our new stores often open with higher sales levels as a

result of greater advertising and promotional spend in connection with grand opening events, but decline shortly thereafter to our new store model levels.

Our new stores often open with higher sales levels as a result of greater advertising and promotional spend in connection with grand opening events but decline shortly thereafter to our new store model levels.

Ollie’s recognizes retail sales in its stores when merchandise is sold and the customer takes possession of the merchandise.

Also included in net sales is revenue allocated to certain redeemed

discounts earned via the Ollie’s Army loyalty program and gift card breakage.

Also included in net sales is revenue allocated to certain redeemed discounts earned via the Ollie’s Army loyalty program and gift card breakage.

Net sales are presented net of returns and sales tax.

Net sales consist of sales from comparable stores and non-comparable stores, described below under “Comparable

Store Sales.” Growth of our net sales is primarily driven by expansion of our store base in existing and new markets.

As we continue to grow, we believe we will have greater access to brand name closeout merchandise and an increased deal

selection, resulting in more potential offerings for our customers.

Net sales consist of sales from comparable stores and non-comparable stores, described below under “Comparable Store Sales.” Growth of our net sales is primarily driven by expansion of our store base in existing and new markets.

As we continue to grow, we believe we will have greater access to brand name and closeout merchandise and an increased deal selection, resulting in more potential offerings for our customers.

Net sales are impacted by product mix, merchandise mix and availability, as well as promotional activities and the spending habits of our customers.

Our broad selection of

offerings across diverse product categories supports growth in net sales by attracting new customers, which results in higher spending levels and frequency of shopping visits from our customers, including Ollie’s Army members.

Our broad selection of offerings across diverse product categories supports growth in net sales by attracting new customers, which results in higher spending levels and frequency of shopping visits from our customers, including Ollie’s Army members.

The spending habits of our customers are subject to macroeconomic conditions and changes in discretionary income.

Our customers’ discretionary income is primarily impacted by gas prices,

wages, inflation, and consumer trends and preferences, which fluctuate depending on the environment.

However, because we offer a broad selection of merchandise at extreme values, we believe we are less impacted than other retailers by economic

cycles that correspond with declines in general consumer spending habits.

Our customers’ discretionary income is primarily impacted by gas prices, wages, inflation, and consumer trends and preferences, which fluctuate depending on the environment.

However, because we offer a broad selection of merchandise at extreme values, we believe we are less impacted than other retailers by economic cycles that correspond with declines in general consumer spending habits.

We believe we also benefit from periods of increased consumer spending.

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Comparable store sales measure performance of a store during the current reporting period against the performance of the same store in the corresponding period of the previous year.

store sales consist of net sales from our stores beginning on the first day of the sixteenth full fiscal month following the store’s opening, which is when we believe comparability is achieved.

Comparable store sales are impacted by the same

factors that impact net sales.

Comparable store sales consist of net sales from our stores beginning on the first day of the sixteenth full fiscal month following the store’s opening, which is when we believe comparability is achieved.

Comparable store sales are impacted by the same factors that impact net sales.

We define comparable stores to be stores that:

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Non-comparable store sales consist of new store sales and sales for stores not open for a full 15 months.

Stores which are closed temporarily, but for more than five days in any fiscal month,

are included in non-comparable store sales beginning in the fiscal month in which the temporary closure begins until the first full month of operation once the store re-opens, at which time they are included in comparable store sales.

Opening new stores is the primary component of our growth strategy and as we continue to execute on our growth strategy, we expect a significant portion of our sales growth will be attributable

to non-comparable store sales.

Stores which are closed temporarily, but for more than five days in any fiscal month, are included in non-comparable store sales beginning in the fiscal month in which the temporary closure begins until the first full month of operation once the store re-opens, at which time they are included in comparable store sales.

Opening new stores is the primary component of our growth strategy and as we continue to execute on our growth strategy, we expect a significant portion of our sales growth will be attributable to non-comparable store sales.

Accordingly, comparable store sales are only one measure we use to assess the success of our growth strategy.

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Gross profit is equal to our net sales less our cost of sales.

Cost of sales includes merchandise costs, inventory markdowns, shrinkage and transportation, distribution and warehousing costs,

including depreciation.

Cost of sales includes merchandise costs, inventory markdowns, shrinkage and transportation, distribution and warehousing costs, including depreciation.

Gross margin is gross profit as a percentage of our net sales.

Gross margin is a measure used by management to indicate whether we are selling merchandise at an appropriate gross profit.

In addition, our gross margin is impacted by product mix, as some products generally provide higher gross margins, by our merchandise mix and availability, and by our merchandise cost, which

In addition, our gross margin is impacted by product mix, as some products generally provide higher gross margins, by our merchandise mix and availability, and by our merchandise cost, which can vary.

Our gross profit is variable in nature and generally follows changes in net sales.

We regularly analyze the components of gross profit, as well as gross margin.

Specifically, our product

margin and merchandise mix is reviewed by our merchant team and senior management, ensuring strict adherence to internal margin goals.

Our disciplined buying approach has produced consistent gross margins and we believe helps to mitigate

adverse impacts on gross profit and results of operation.

Specifically, our product margin and merchandise mix is reviewed by our merchant team and senior management, ensuring strict adherence to internal margin goals.

Our disciplined buying approach has produced consistent gross margins and we believe helps to mitigate adverse impacts on gross profit and results of operation.

The components of our cost of sales may not be comparable to the components of cost of sales or similar measures of our competitors and other retailers.

As a result, our gross profit and gross

margin may not be comparable to similar data made available by our competitors and other retailers.

As a result, our gross profit and gross margin may not be comparable to similar data made available by our competitors and other retailers.

Selling, General, and Administrative Expenses

SG&A are comprised of payroll and benefits for store, field support, and support center associates.

SG&A also include marketing and advertising expense, occupancy costs for stores and

the store support center, insurance, corporate infrastructure, and other general expenses.

SG&A is comprised of payroll and benefits for store, field support, and support center associates.

SG&A also includes marketing and advertising expense, occupancy costs for stores and the store support center, insurance, corporate infrastructure, and other general expenses.

The components of our SG&A remain relatively consistent per store and for each new store opening.

The components of our SG&A may not be

comparable to the components of similar measures of other retailers.

The components of our SG&A may not be comparable to the components of similar measures of other retailers.

Consolidated SG&A generally increase as we grow our store base and as our net sales increase.

A significant portion of our expenses is primarily fixed in nature, and we

expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales.

A significant portion of our expenses are primarily fixed in nature, and we expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales.

We expect that our SG&A will continue to increase in future periods with future growth.

The components of our SG&A may not be comparable to the components of SG&A or similar measures of our competitors and other retailers.

As a result, our SG&A may not be comparable to similar data made available by our competitors and other retailers.

Depreciation and Amortization Expenses

Property and equipment are stated at original cost less accumulated depreciation and amortization.

Depreciation and amortization expenses are calculated over the estimated useful lives of the

related assets, or in the case of leasehold improvements, the lesser of the useful lives or the remaining term of the lease.

Depreciation and amortization expenses are calculated over the estimated useful lives of the related assets, or in the case of leasehold improvements, the lesser of the useful lives or the remaining term of the lease.

Expenditures for additions, renewals, and betterments are capitalized;

expenditures for maintenance and repairs are

charged to expense as incurred.

expenditures for maintenance and repairs are charged to expense as incurred.

Depreciation and amortization are computed on the straight-line method for financial reporting purposes.

Depreciation as it relates to our distribution centers is included within cost of sales on the condensed

consolidated statements of income.

Depreciation as it relates to our distribution centers is included within cost of sales on the condensed consolidated statements of income.

Pre-Opening Expenses

Pre-opening expenses consist of expenses of opening new stores and distribution centers, as well as store remodel and closing costs.

For opening new stores, pre-opening expenses include grand

opening advertising costs, payroll expenses, travel expenses, employee training costs, rent expenses, and store setup costs.

Pre-opening expenses for new stores are expensed as they are incurred, which is typically within 30 to 45 days of

opening a new store.

For opening new stores, pre-opening expenses include grand opening advertising costs, payroll expenses, travel expenses, employee training costs, rent expenses, and store setup costs.

Pre-opening expenses for new stores are expensed as they are incurred, which is typically within 30 to 45 days of opening a new store.

For opening distribution centers, pre-opening expenses primarily include inventory transportation costs, employee travel expenses, and occupancy costs.

Store remodel costs primarily consist of payroll expenses, travel

expenses, and store setup costs expensed as they are incurred.

Store remodel costs primarily consist of payroll expenses, travel expenses, and store setup costs expensed as they are incurred.

Store closing costs primarily consist of insurance deductibles, rent, and store payroll.

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Operating income is gross profit less SG&A, depreciation and amortization, and pre-opening expenses.

Operating income excludes net interest income or expense, and income tax expense or

Operating income excludes net interest income or expense, and income tax expense or benefit.

We use operating income as an indicator of the productivity of our business and our ability to manage expenses.

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EBITDA and Adjusted EBITDA are key metrics used by management and our Board to assess our financial performance.

EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and

other interested parties to evaluate companies in our industry.

EBITDA and Adjusted EBITDA are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry.

We use Adjusted EBITDA to supplement U.S.

generally accepted accounting principles (“GAAP”) measures of performance to evaluate the effectiveness of our business strategies, to

make budgeting decisions, to evaluate our performance in connection with compensation decisions and to compare our performance against that of other peer companies using similar measures.

Management believes it is useful to investors and

analysts to evaluate these non-GAAP measures on the same basis as management uses to evaluate the Company’s operating results.

We believe that excluding items from operating income, net income and net income per diluted share that may not be

indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business.

generally accepted accounting principles (“GAAP”) measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to evaluate our performance in connection with compensation decisions and to compare our performance against that of other peer companies using similar measures.

Management believes it is useful to investors and analysts to evaluate these non-GAAP measures on the same basis as management uses to evaluate the Company’s operating results.

We believe that excluding items from operating income, net income and net income per diluted share that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business.

We define EBITDA as net income before net interest income or expense, depreciation and amortization expenses and income taxes.

Adjusted EBITDA represents EBITDA as further adjusted for

non-cash stock-based compensation expense.

Adjusted EBITDA represents EBITDA as further adjusted for non-cash stock-based compensation expense and gains on insurance settlements.

EBITDA and Adjusted EBITDA are non-GAAP measures and may not be comparable to similar measures reported by other companies.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you

should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP.

In the future we may incur expenses or charges such as those added back to calculate Adjusted EBITDA.

Our presentation of Adjusted

EBITDA should not be construed as an inference that our future results will be unaffected by these items.

For further discussion of EBITDA and Adjusted EBITDA and for reconciliations of net income, the most directly comparable GAAP measure,

to EBITDA and Adjusted EBITDA, see “Results of Operations.”

Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items.

For further discussion of EBITDA and Adjusted EBITDA and for reconciliations of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA, see “Results of Operations.”

Factors Affecting the Comparability of our Results of Operations

Our results over the past two years have been affected by the following factors, which must be understood in order to assess the comparability of our period-to-period financial

performance and condition.

Our results over the past two years have been affected by the following factors, which must be understood in order to assess the comparability of our period-to-period financial performance and condition.

Historical Results

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Store Openings and Closings

We opened 24 new stores and closed three stores, two closures where the Company chose not to renew the leases and one temporary closure related to Hurricane Helene, in the third quarter of

fiscal 2024 and opened 23 new stores in the third quarter of fiscal 2023.

We opened 37 new stores and closed three stores in the thirty-nine weeks ended November 2, 2024 and opened 38 new stores and closed one store in the thirty-nine weeks

ended October 28, 2023.

We opened 25 new stores in the first quarter of fiscal 2025 and opened 4 new stores in the first quarter of fiscal 2024.

In connection with these store openings and closings, we incurred expenses of $6.7 million and $2.7 million in the respective periods.

Additionally, in the first quarter of fiscal 2025, we incurred $1.8 million of dark rent associated with the bankruptcy acquired stores, included within pre-opening expenses.

Our business is seasonal in nature and demand is generally the highest in our fourth fiscal quarter due to the holiday sales season.

To prepare for the holiday sales season, we must order and

keep in stock more merchandise than we carry during other times of the year and generally engage in additional marketing efforts.

We expect inventory levels, along with accounts payable and accrued expenses, to reach their highest levels in

our third and fourth fiscal quarters in anticipation of increased net sales during the holiday sales season.

As a result of this seasonality, and generally because of variation in consumer spending habits, we experience fluctuations in net

sales and working capital requirements during the year.

Because we offer a broad selection of merchandise at extreme values, we believe we are less impacted than other retailers by economic cycles which correspond with declines in general

consumer spending habits, and we believe we still benefit from periods of increased consumer spending.

To prepare for the holiday sales season, we must order and keep in stock more merchandise than we carry during other times of the year and generally engage in additional marketing efforts.

We expect inventory levels, along with accounts payable and accrued expenses, to reach their highest levels in our third and fourth fiscal quarters in anticipation of increased net sales during the holiday sales season.

As a result of this seasonality, and generally because of variation in consumer spending habits, we experience fluctuations in net sales and working capital requirements during the year.

Because we offer a broad selection of merchandise at extreme values, we believe we are less impacted than other retailers by economic cycles which correspond with declines in general consumer spending habits, and we believe we still benefit from periods of increased consumer spending.

Results of Operations

The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.

We derived the condensed consolidated statements of income for the thirteen and thirty-nine weeks ended November 2, 2024 and October 28, 2023 from our unaudited condensed consolidated financial

statements and related notes.

We derived the condensed consolidated statements of income for the first quarter of fiscal 2025 and the first quarter of fiscal 2024 from our unaudited condensed consolidated financial statements and related notes.

Our historical results are not necessarily indicative of the results that may be expected in the future.

Thirteen weeks ended

Thirty-nine weeks ended

( dollars in thousands)

Condensed consolidated statements of income data :

Cost of sales

Selling, general, and administrative expenses

Depreciation and amortization expenses

Pre-opening expenses

Operating income

Interest income, net

Income before income taxes

Income tax expense

Percentage of net sales (1) :

Cost of sales

Selling, general, and administrative expenses

Depreciation and amortization expenses

Pre-opening expenses

Operating income

Interest income, net

Income before income taxes

Income tax expense

Select operating data:

New store openings

Number of closed stores

Number of stores open at end of period

Average net sales per store (2)

Comparable stores sales change

consolidated statements of income data :

general and administrative expenses

and amortization expenses

(income), net

before income taxes

of net sales:

general and administrative expenses

and amortization expenses

(income), net

before income taxes

operating data:

of new stores

of stores open at end of period

net sales per store (2)

stores sales change

(1) Components may not add to totals due to rounding.

2 unchanged sentences

Thirteen weeks ended

Thirty-nine weeks ended

( dollars in thousands)

(in thousands)

Interest (income), net

Depreciation and amortization expenses (1)

Depreciation and amortization

Income tax expense

Non-cash stock-based compensation expense

Non-cash stock-based

compensation expense

Adjusted EBITDA

(1) Includes depreciation and amortization relating to our distribution centers, which is included within cost of sales on our condensed consolidated statements of income.

Third Quarter of Fiscal 2024 Compared to Third Quarter of Fiscal 2023

Net sales increased to $517.4 million in the third quarter of fiscal 2024 from $480.1 million in the third quarter of fiscal 2023, an increase of $37.4 million, or 7.8%.

The increase was the

result of a non-comparable store sales increase of $39.8 million, partially offset by a decrease in comparable store sales of $2.5 million.

The increase in non-comparable store sales was driven by new store unit growth.

Comparable store sales decreased 0.5% in the third quarter of fiscal 2024 compared with a 7.0% increase in the third quarter of fiscal 2023.

The decrease in comparable store sales was due to a

slight decline in the number of transactions and average transaction size.

Gross Profit and Gross Margin

Gross profit increased to $214.5 million in the third quarter of fiscal 2024 from $194.1 million in the third quarter of fiscal 2023, an increase of $20.3 million, or 10.5%.

increased 100 basis points to 41.4% in the third quarter of fiscal 2024 from 40.4% in the third quarter of fiscal 2023.

The increase in gross margin in the third quarter of fiscal 2024 was primarily due to favorable supply chain costs,

partially offset by lower merchandise margin from the higher mix of consumer staples.

Selling, General, and Administrative Expenses

SG&A increased to $154.5 million in the third quarter of fiscal 2024 from $141.7 million in the third quarter of fiscal 2023, an increase of $12.8 million, or 9.0%, primarily driven by

higher selling expenses related to new store openings.

As a percentage of net sales, SG&A increased 40 basis points to 29.9% in the third quarter of fiscal 2024 compared to 29.5% in the third quarter of fiscal 2023, due to deleverage of

fixed expenses associated with the decrease in comparable store sales.

Pre-Opening Expenses

Pre-opening expenses increased to $7.2 million in the third quarter of fiscal 2024 from $6.3 million in the third quarter of fiscal 2023 due to increased costs associated with the recently

acquired former 99 Cents Only and Big Lots store locations, as well as timing of our planned new store openings.

We opened 24 stores and closed three stores, two planned closures and one temporary closure related to Hurricane Helene in the

third quarter of fiscal 2024 and opened 23 new stores in the third quarter of fiscal 2023.

As a percentage of net sales, pre-opening expenses increased to 1.4% in the third quarter of fiscal 2024 from 1.3% in the third quarter of fiscal 2023.

Interest Income, Net

Interest income, net remained flat at $4.0 million in the third quarters of fiscal 2024 and fiscal 2023, respectively.

Income Tax Expense

Income tax expense increased to $12.7 million in the third quarter of fiscal 2024 compared to $11.2 million in the third quarter of fiscal 2023.

The effective tax rate for the third quarters of

fiscal 2024 and fiscal 2023 was 26.1%, respectively.

The effective income tax rate differed from the federal statutory rate, primarily due to the effect of state taxes and discrete tax benefits primarily related to stock-based compensation.

Discrete tax benefits totaled $0.3 million in the third quarter of fiscal 2024 compared to discrete tax benefits of $0.1 million in the third quarter of fiscal 2023.

As a result of the foregoing, net income increased to $35.9 million in the third quarter of fiscal 2024 from $31.8 million in the third quarter of fiscal 2023, an increase of $4.1 million or

Adjusted EBITDA

Adjusted EBITDA increased to $59.8 million in the third quarter of fiscal 2024 from $51.1 million in the third quarter of fiscal 2023, an increase of $8.7 million, or 17.0%.

Year-to-Date Fiscal 2024 Compared to Year-to-Date Fiscal 2023

Net sales increased to $1.605 billion in the thirty-nine weeks ended November 2, 2024 from $1.454 billion in the thirty-nine weeks ended October 28, 2023, an increase of $151.0 million, or

The increase was the result of a non-comparable store sales increase of $110.6 million and an increase in comparable store sales of $40.4 million.

The increase in non-comparable store sales was driven by new store unit growth.

Comparable store sales increased 2.8% in the thirty-nine weeks ended November 2, 2024 compared with a 6.5% increase in the thirty-nine weeks ended October 28, 2023.

The increase in comparable

store sales primarily consisted of an increase in basket and an increase in the number of transactions.

First Quarter of Fiscal 2025 Compared to First Quarter of Fiscal 2024

Net sales increased to $576.8 million in the first quarter of fiscal 2025 from $508.8 million in the first quarter of fiscal 2024, an increase of $67.9 million, or 13.4%.

The increase in net sales was the result of new store unit growth in addition to a comparable store sales increase of 2.6%.

Comparable store sales increased 2.6% in the first quarter of fiscal 2025 compared with a 3.0% increase in the first quarter of fiscal 2024.

The increase in comparable store sales was driven by an increase in the number of transactions.

Gross Profit and Gross Margin

Gross profit increased to $642.8 million in the thirty-nine weeks ended November 2, 2024 from $569.4 million in the thirty-nine weeks ended October 28, 2023.

Gross margin increased 90 basis

points to 40.1% in the thirty-nine weeks ended November 2, 2024 from 39.2% in the thirty-nine weeks ended October 28, 2023.

The increase in gross margin in the thirty-nine weeks ended November 2, 2024 was primarily due to favorable supply

chain costs as well as higher merchandise margins.

Gross profit increased to $237.0 million in the first quarter of fiscal 2025 from $209.4 million in the first quarter of fiscal 2024.

Gross margin remained flat at 41.1% in the first quarter of fiscal 2025 and 2024, respectively.

Gross margin in the first quarter of fiscal 2025 was the result of favorable supply chain costs offset by lower merchandise margin driven by changes in mix.

Selling, General, and Administrative Expenses

SG&A increased to $442.6 million in the thirty-nine weeks ended November 2, 2024 from $406.6 million in the thirty-nine weeks ended October 28, 2023, an increase of $36.0 million, or 8.9%,

primarily driven by higher selling expenses related to new store openings.

As a percentage of net sales, SG&A decreased 40 basis points to 27.6% in the thirty-nine weeks ended November 2, 2024 from 28.0% in the thirty-nine weeks ended

October 28, 2023.

The decrease was primarily the result of leverage of fixed expenses on the increase in comparable store sales and disciplined expense control.

SG&A increased to $164.8 million in the first quarter of fiscal 2025 from $142.4 million in the first quarter of fiscal 2024, an increase of $22.4 million, or 15.7%, primarily driven by higher selling expenses related to new store growth.

As a percentage of net sales, SG&A increased to 28.6% in the first quarter of fiscal 2025 compared to 28.0% in the first quarter of fiscal 2024 driven primarily by higher medical and casualty claims.

Pre-Opening Expenses

Pre-opening expenses increased to $14.5 million in the thirty-nine weeks ended November 2, 2024 from $12.4 million in the thirty-nine weeks ended October 28, 2023 primarily due to the costs

associated with the startup of the Company’s fourth distribution center in Princeton, IL as well as the comparative number of new stores.

During the thirty-nine weeks ended November 2, 2024, we opened 37 new stores and closed three stores, two

planned closures and one temporary closure related to Hurricane Helene.

During the thirty-nine weeks ended October 28, 2023, we opened 38 new stores and closed one store.

As a percentage of net sales, pre-opening expenses remained flat at 0.9%

in the thirty-nine weeks ended November 2, 2024 and October 28, 2023, respectively.

Pre-opening expenses increased to $6.7 million in the first quarter of fiscal 2025 from $2.7 million in the first quarter of fiscal 2024 primarily driven by new store growth and $1.8 million of dark rent associated with the bankruptcy acquired stores.

We opened 25 new stores in the first quarter of fiscal 2025 and opened 4 new stores in the first quarter of fiscal 2024.

As a percentage of net sales, pre-opening expenses increased to 1.2% in the first quarter of fiscal 2025 compared to 0.5% in the first quarter of fiscal 2024.

Interest Income, Net

Interest income, net increased to $12.3 million in the thirty-nine weeks ended November 2, 2024 from $10.1 million in the thirty-nine weeks ended

October 28, 2023, primarily due to favorable interest rates and higher average cash and cash equivalent and short-term investments balances.

Net interest income was $4.8 million in the first quarter of fiscal 2025 compared with net interest income of $4.3 million in the first quarter of fiscal 2024.

The increase in interest income in the first quarter of fiscal 2025 is primarily due to higher average cash and cash equivalent and investments balances compared to the first quarter of fiscal 2024.

Income Tax Expense

Income tax expense in the thirty-nine weeks ended November 2, 2024 was $42.8 million compared to income tax expense of $35.2 million in the thirty-nine weeks ended October 28, 2023.

effective tax rates for the thirty-nine weeks ended November 2, 2024 and October 28, 2023 were 24.6% and 25.1%, respectively.

The decrease in the effective tax rate in the thirty-nine weeks ended November 2, 2024 was primarily due to an

increase in discrete tax benefits related to stock-based compensation.

Discrete tax benefits totaled $2.2 million in the thirty-nine weeks ended November 2, 2024 compared to discrete tax benefits of $0.7 million in the thirty-nine weeks ended

October 28, 2023.

As a result of the foregoing, net income increased to $131.2 million in the thirty-nine weeks ended November 2, 2024 from $105.0 million in the thirty-nine weeks ended October 28, 2023, an

increase of $26.2 million or 25.0%.

Income tax expense decreased to $13.4 million in the first quarter of fiscal 2025 compared to $14.5 million in the first quarter of fiscal 2024.

The effective tax rates for the first quarters of fiscal 2025 and fiscal 2024 were 22.0% and 23.8%, respectively.

The decrease in the effective tax rate in the first quarter of fiscal 2025 was primarily due to an increase in excess tax benefits related to stock-based compensation.

Discrete tax benefits totaled $2.3 million in the first quarter of fiscal 2025 compared to discrete tax benefits of $1.1 million in the first quarter of fiscal 2024.

As a result of the foregoing, net income increased to $47.6 million in the first quarter of fiscal 2025 from $46.3 million in the first quarter of fiscal 2024, an increase of $1.2 million or 2.6%.

Adjusted EBITDA

Adjusted EBITDA increased to $203.7 million in the thirty-nine weeks ended November 2, 2024 from $164.6 million in the thirty-nine weeks ended October 28, 2023, an increase of $39.1 million, or

Adjusted EBITDA increased to $72.2 million in the first quarter of fiscal 2025 from $69.4 million in the first quarter of fiscal 2024, an increase of $2.7 million, or 3.9%.

Liquidity and Capital Resources

Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility.

Our primary cash needs are for

capital expenditures and working capital.

As of November 2, 2024, we had $92.1 million available to borrow under our Revolving Credit Facility and $303.9 million of cash and cash equivalents and short-term investments on hand.

information regarding our Revolving Credit Facility, see Note 7 under “Notes to Unaudited Condensed Consolidated Financial Statements.”

Our capital expenditures are primarily related to new store openings, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers,

and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems.

We spent $31.0 million and $36.1 million for capital expenditures during the third quarters of fiscal 2024

and fiscal 2023, respectively.

For the thirty-nine weeks ended November 2, 2024, we spent $96.2 million for capital expenditures compared to $81.4 million for the thirty-nine weeks ended October 28, 2023.

Included in capital expenditures in the

thirty-nine weeks ended November 2, 2024, is approximately $15.8 million for the acquisition of ten former 99 Cents Only Store locations and fifteen former Big Lots store leases.

Of the ten 99 Cents Only store locations, three of these are

owned properties and seven are leased properties with favorable rent and leasing structures, located in key markets across Texas.

With the acquisition, we expect our total capital expenditures to be approximately $104 million, which includes

the $14.6 million purchase price and build out costs for the newly acquired locations.

We expect to fund capital expenditures from cash on hand generated from operations.

We opened 37 new stores and closed three stores, two closures where the Company chose not to renew the leases

and one temporary closure related to Hurricane Helene, during the thirty-nine weeks ended November 2, 2024, and we recently completed the construction of our Princeton, IL distribution center, which provides an additional 615,000 square feet of

distribution capacity.

We expect to open approximately 50 stores during fiscal 2024.

We also expect to invest in store-level initiatives at our existing stores, and general corporate capital expenditures, including information technology.

have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects.

Our primary working capital requirements are for the purchase of merchandise inventories, payroll, store rent associated with our operating leases, other store operating costs, distribution

costs, and general and administrative costs.

Our working capital requirements fluctuate during the year, rising in our third fiscal quarter as we increase quantities of inventory in anticipation of our peak holiday sales season in our fourth

fiscal quarter.

Our primary cash needs are for capital expenditures and working capital.

As of May 3, 2025, we had $91.9 million available to borrow under our Revolving Credit Facility, $369.5 million of cash and cash equivalents and short-term investments on hand.

For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to Unaudited Condensed Consolidated Financial Statements.”

Our capital expenditures are primarily related to new store openings, lease acquisitions and related build-out costs, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers, and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems.

We spent $26.7 million and $26.9 million for capital expenditures during the first quarters of fiscal 2025 and fiscal 2024, respectively.

We opened 25 new stores during the first quarter of fiscal 2025.

Capital expenditures in 2025 are planned to be approximately $83 to $88 million, primarily for the opening of 75 new stores, store-level initiatives at our existing stores, as well as general corporate capital expenditures, including information technology.

We have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects.

Our primary working capital requirements are for the purchase of merchandise inventories, payroll, store rent associated with our operating leases, other store operating costs, distribution costs, and general and administrative costs.

Our working capital requirements fluctuate during the year, rising in our third fiscal quarter as we increase quantities of inventory in anticipation of our peak holiday sales season in our fourth fiscal quarter.

Fluctuations in working capital are also driven by the timing of new store openings.

1 unchanged sentence

A financial instrument which potentially subjects the Company to a concentration of credit risk is cash.

Ollie’s currently maintains its day-to-day operating cash balances with major financial

institutions.

Ollie’s currently maintains its day-to-day operating cash balances with major financial institutions.

The Company’s operating cash balances are in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit.

From time to time, Ollie’s invests temporary excess cash in overnight investments with expected minimal

volatility, such as money market funds.

From time to time, Ollie’s invests temporary excess cash in overnight investments with expected minimal volatility, such as money market funds.

Although the Company maintains balances which exceed the FDIC insured limit, it has not experienced any losses related to these balances.

We believe our cash and cash equivalents and short-term investments position, net cash provided by operating activities and availability under our Revolving Credit Facility will be adequate to

finance our planned capital expenditures, working capital requirements, debt service and other financing activities over the next 12 months.

If cash provided by operating activities and borrowings under our Revolving Credit Facility are not

sufficient or available to meet our capital requirements, we will then be required to obtain additional equity or debt financing in the future.

There can be no assurance equity or debt financing will be available to us when needed or, if

available, the terms will be satisfactory to us and not dilutive to our then-current stockholders.

We believe our cash and cash equivalents and short-term investments position, net cash provided by operating activities and availability under our Revolving Credit Facility will be adequate to finance our planned capital expenditures, working capital requirements, debt service and other financing activities over the next 12 months.

If cash provided by operating activities and borrowings under our Revolving Credit Facility are not sufficient or available to meet our capital requirements, we will then be required to obtain additional equity or debt financing in the future.

There can be no assurance equity or debt financing will be available to us when needed or, if available, the terms will be satisfactory to us and not dilutive to our then-current stockholders.

Share Repurchase Program

On December 15, 2020, the Board of Directors of the Company authorized the repurchase of up to $100.0 million of shares of the Company’s common stock.

On March 16, 2021, the Board of Directors

of the Company authorized an increase of $100.0 million in the Company’s share repurchase program, resulting in $200.0 million approved for share repurchases through January 13, 2023.

On November 30, 2021, the Board of Directors of the Company

authorized an additional $200.0 million to repurchase stock pursuant to the Company’s share repurchase program, expiring on December 15, 2023.

On November 30, 2023, the Company’s Board of Directors authorized an extension to the existing share

repurchase program set to expire on December 15, 2023, until March 31, 2026.

The shares to be repurchased may be purchased from time to time in open market conditions (including blocks) or in privately negotiated transactions, accelerated share

repurchase programs or other derivative transactions, issuer self-tender offers or any combination of the foregoing.

The timing of repurchases and the actual amount purchased will depend on a variety of factors, including the market price of

our shares, general market, economic, and business conditions, and other corporate considerations.

Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow us to

purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods.

Repurchases are expected to be funded from cash on hand or through the

utilization of our Revolving Credit Facility.

Between December 15, 2020, and November 30, 2023, the Company’s Board of Directors approved and authorized the repurchase of up to $400.0 million of shares of the Company’s common stock through three separate approvals, set to expire March 31, 2026.

On March 19, 2025, the Company’s Board of Directors approved a new share repurchase authorization of an additional $300.0 million of the Company’s outstanding common stock, effective through March 31, 2029.

The shares to be repurchased may be purchased from time to time in open market conditions (including blocks), privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, issuer self-tender offers or any combination of the foregoing.

The timing of repurchases and the actual amount purchased will depend on a variety of factors, including the market price of our shares, general market, economic and business conditions, and other corporate considerations.

Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow us to purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods.

Repurchases are expected to be funded from cash on hand or through the utilization of our Revolving Credit Facility.

The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by our Board of Directors at any time.

During the thirty-nine weeks ended November 2, 2024, we repurchased 587,633 shares of our common stock for $47.3 million, inclusive of transaction costs, pursuant to our share repurchase

During the thirty-nine weeks ended October 28, 2023, we repurchased 634,733 shares of our common stock for $39.8 million inclusive of transaction costs, pursuant to our share repurchase program.

These expenditures were funded by cash

generated from operations.

As of November 2, 2024, we had $38.4 million remaining under our share repurchase authorization.

There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any

During the first quarter of fiscal 2025, we repurchased 159,757 shares of our common stock for $17.1 million, inclusive of transaction costs, pursuant to our share repurchase program.

During the first quarter of fiscal 2024, we repurchased 336,934 shares of our common stock for $25.0 million.

These expenditures were funded by cash generated from operations.

As of May 3, 2025, we had $315.5 million remaining under our share repurchase authorization.

There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any repurchases.

Summary of Cash Flows

A summary of our cash flows from operating, investing, and financing activities is presented in the following table:

Thirty-nine weeks ended

Thirteen weeks ended

(in thousands)

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net cash provided by operating

Net cash used in investing

Net cash used in financing

Net decrease in cash and cash

Cash Provided by Operating Activities

Net cash provided by operating activities was $79.7 million for the thirty-nine weeks ended November 2, 2024 as compared to $110.9 million for the thirty-nine weeks ended October 28, 2023.

decrease in net cash provided by operating activities for the thirty-nine weeks ended November 2, 2024 was primarily due to changes in working capital, most notably the timing of inventory receipts and payments, including tax payments,

partially offset by higher net income year over year.

Net cash provided by operating activities in the first quarter of fiscal 2025 was $28.7 million as compared to net cash provided by operating activities of $40.2 million in the first quarter of fiscal 2024.

The decrease in net cash provided by operating activities in the first quarter of fiscal 2025 was primarily due to changes in working capital, most notably the timing of merchandise payments, partially offset by higher net income year over year.

Cash Used in Investing Activities

Net cash used in investing activities was $183.4 million for the thirty-nine weeks ended November 2, 2024 as compared to $125.3 million for the thirty-nine weeks ended October 28, 2023.

increase in cash used in investing activities is primarily due to an increase in capital expenditures in the current year related to the completion of the Company’s fourth distribution center in Princeton, IL, the acquisition of ten former 99

Cents Only Store locations and the acquisition of 15 former Big Lots store leases, in addition to increased net investment of short-term investments thirty-nine weeks ended November 2, 2024 as compared to the thirty-nine weeks ended October 28,

Net cash used in investing activities in the first quarters of fiscal 2025 and fiscal 2024 was $18.3 million and $68.5 million, respectively.

The decrease in cash used in investing activities is primarily due to reduced net investment of investments in the first quarter of fiscal 2025 as compared to the first quarter of fiscal 2024.

In the first quarter of fiscal 2025 purchases of investments were $119.0 million offset with maturities of investments of $127.4 million.

In the first quarter of fiscal 2024, purchases of short-term investments were $96.0 million offset with maturities of short-term investments of $54.3 million.

Cash Used in Financing Activities

Net cash used in financing activities was $33.8 million for the thirty-nine weeks ended November 2, 2024 as compared to $36.6 million for the thirty-nine weeks ended October 28, 2023.

decrease was primarily due to an increase in the repurchase of common stock, partially offset by an increase in proceeds from stock option exercises in the thirty-nine weeks ended November 2, 2024 as compared to the thirty-nine weeks ended

October 28, 2023.

Net cash used in financing activities in the first quarters of fiscal 2025 and fiscal 2024 was $16.5 million and $25.7 million, respectively.

The decrease in cash used in financing activities is primarily due to a decrease in the shares repurchased in the first quarter of fiscal 2025 of $17.1 million compared to $25.0 million in the first quarter of fiscal 2024, partially offset by an increase in the proceeds from stock option exercises and vesting of restricted stock of $6.2 million in the first quarter of fiscal 2025 as compared with proceeds of $2.5 million in the first quarter of 2024.

Contractual Obligations

We enter into long-term contractual obligations and commitments in the normal course of business, primarily operating leases.

Except as set forth in Note 4 of the accompanying unaudited

condensed consolidated financial statements, there have been no material changes to our contractual obligations as disclosed in our Annual Report, other than those which occur in the ordinary course of business.

Except as set forth in Note 4 of the accompanying unaudited condensed consolidated financial statements, there have been no material changes to our contractual obligations as disclosed in our Annual Report, other than those which occur in the ordinary course of business.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on

our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

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What changed 10-Q

Item 2. Management’s Discussion and Analysis