Ollie's Bargain Outlet Holdings, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm ( KPMG LLP , Harrisburg, PA , Auditor Firm ID 185 ) 42 Consolidated Financial Statements: Consolidated Statements of Income for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024 43 Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025 44 Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024 45 Consolidated Statements of Cash Flows for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024 46 Notes to Consolidated Financial Statements 47 Schedule I – Condensed Financial Information of Registrant 66 41 Index Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Ollie’s Bargain Outlet Holdings, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries (the Company) as of January 31, 2026 and February 1, 2025, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended January 31, 2026, and the related notes and financial statement schedule I - condensed financial information of registrant (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended January 31, 2026, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 19, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Estimation of store shrink As discussed in Note 1(h) to the consolidated financial statements, inventories are valued at the lower of cost or market determined using the retail inventory method on a first-in, first-out basis. The retail inventory method is based on a number of factors such as markups, markdowns, and shrinkage (or shrink). The Company calculates the shrink provision based on actual physical inventory results during the fiscal period and estimated shrink occurring subsequent to a physical inventory through the end of the fiscal reporting period. This accrual is calculated as a percentage of sales for each retail store, at a department level, based on the Company’s most recent historical shrink rate adjusted, if necessary, for current economic conditions and business trends. The Company’s inventories were $650.3 million as of January 31, 2026. We identified the evaluation of the estimation of store shrink occurring between the physical inventory counts and the fiscal year-end as a critical audit matter. Evaluation of the Company’s estimation of shrink at the end of the fiscal year involved subjective auditor judgment due to the estimation uncertainty associated with the shrink rate assumption. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the estimation of store shrink. We evaluated the appropriateness of the Company’s shrink accrual at the end of the fiscal year by (1) evaluating the shrink rate used by comparing to historical shrink rates, (2) testing the application of the method and certain assumptions used, and (3) performing a sensitivity analysis over the shrink reserve estimate. /s/ KPMG LLP We have served as the Company’s auditor since 2009. Harrisburg, Pennsylvania March 19, 2026 42 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share amounts) Fiscal year ended January 31, February 1, February 3, 2026 2025 2024 Net sales $ 2,649,198 $ 2,271,705 $ 2,102,662 Cost of sales 1,576,254 1,357,253 1,270,297 Gross profit 1,072,944 914,452 832,365 Selling, general, and administrative expenses 709,002 612,406 562,672 Depreciation and amortization expenses 40,996 33,224 27,819 Pre-opening expenses 25,281 19,319 14,075 Operating income 297,665 249,503 227,799 Interest income, net ( 18,719 ) ( 16,311 ) ( 14,686 ) Income before income taxes 316,384 265,814 242,485 Income tax expense 75,788 66,052 61,046 Net income $ 240,596 $ 199,762 $ 181,439 Earnings per common share: Basic $ 3.92 $ 3.26 $ 2.94 Diluted $ 3.89 $ 3.23 $ 2.92 Weighted average common shares outstanding: Basic 61,322 61,339 61,741 Diluted 61,773 61,767 62,068 See accompanying Notes to the Consolidated Financial Statements. 43 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except per share amounts) January 31, February 1, Assets 2026 2025 Current assets: Cash and cash equivalents $ 259,680 $ 205,123 Short-term investments 36,628 223,546 Inventories 650,260 552,542 Accounts receivable 3,805 2,352 Prepaid expenses and other assets 13,692 10,228 Total current assets 964,065 993,791 Property and equipment, net 382,242 334,961 Operating lease right-of-use assets 663,848 554,737 Goodwill 444,850 444,850 Trade name 230,559 230,559 Long-term investments 266,455 - Other assets 2,934 2,247 Total assets $ 2,954,953 $ 2,561,145 Liabilities and Stockholders’ Equity Current liabilities: Current portion of long-term debt $ 569 $ 556 Accounts payable 169,345 130,279 Income taxes payable 9,823 1,707 Current portion of operating lease liabilities 108,854 83,944 Accrued expenses and other 111,857 87,855 Total current liabilities 400,448 304,341 Revolving credit facility - - Long-term debt 974 1,040 Deferred income taxes 89,924 81,124 Long-term operating lease liabilities 575,531 479,330 Total liabilities 1,066,877 865,835 Stockholders’ equity: Preferred stock - 50,000 shares authorized at $ 0.001 par value; no shares issued - - Common stock - 500,000 shares authorized at $ 0.001 par value; 67,840 and 67,462 shares issued, respectively 68 67 Additional paid-in capital 761,300 735,284 Retained earnings 1,608,309 1,367,713 Treasury - common stock, at cost; 6,750 and 6,113 shares, respectively ( 481,601 ) ( 407,754 ) Total stockholders’ equity 1,888,076 1,695,310 Total liabilities and stockholders’ equity $ 2,954,953 $ 2,561,145 See accompanying Notes to the Consolidated Financial Statements. 44 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders’ Equity (In thousands) Common stock Treasury stock Additional Retained Total stockholders’ Shares Amount Shares Amount paid-in capital earnings equity Balance as of January 28, 2023 66,672 67 ( 4,664 ) ( 302,204 ) 677,694 986,512 1,362,069 Stock-based compensation expense - - - - 12,237 - 12,237 Proceeds from stock options exercised 180 - - - 6,686 - 6,686 Vesting of restricted stock 103 - - - - - - Common shares withheld for taxes ( 28 ) - - - ( 1,658 ) - ( 1,658 ) Shares repurchased - - ( 809 ) ( 52,541 ) - - ( 52,541 ) Net income - - - - - 181,439 181,439 Balance as of February 3, 2024 66,927 67 ( 5,473 ) ( 354,745 ) 694,959 1,167,951 1,508,232 Stock-based compensation expense - - - - 19,445 - 19,445 Proceeds from stock options exercised 454 - - - 23,995 - 23,995 Vesting of restricted stock 120 - - - - - - Common shares withheld for taxes ( 39 ) - - - ( 3,115 ) - ( 3,115 ) Shares repurchased - - ( 640 ) ( 53,009 ) - - ( 53,009 ) Net income - - - - - 199,762 199,762 Balance as of February 1, 2025 67,462 67 ( 6,113 ) ( 407,754 ) 735,284 1,367,713 1,695,310 Stock-based compensation expense - - - - 13,060 - 13,060 Proceeds from stock options exercised 284 - - - 18,657 - 18,657 Vesting of restricted stock 146 1 - - - - 1 Common shares withheld for taxes ( 52 ) - - - ( 5,701 ) - ( 5,701 ) Shares repurchased - - ( 637 ) ( 73,847 ) - - ( 73,847 ) Net income - - - - - 240,596 240,596 Balance as of January 31, 2026 67,840 $ 68 ( 6,750 ) $ ( 481,601 ) $ 761,300 $ 1,608,309 $ 1,888,076 See accompanying Notes to the Consolidated Financial Statements. 45 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 Cash Flows from Operating Activities: Net income $ 240,596 $ 199,762 $ 181,439 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 55,236 43,958 34,936 Amortization of debt issuance costs 52 52 267 Gain on sale of assets ( 64 ) ( 131 ) ( 304 ) Deferred income tax provision 8,800 9,247 1,245 Stock-based compensation expense 13,060 19,445 12,237 Other ( 1,191 ) ( 1,377 ) ( 723 ) Changes in operating assets and liabilities: Inventories ( 97,718 ) ( 46,752 ) ( 35,256 ) Accounts receivable ( 1,453 ) ( 129 ) 151 Prepaid expenses and other assets ( 4,243 ) ( 186 ) 341 Accounts payable 38,576 4,053 38,250 Income taxes payable 8,116 ( 13,037 ) 11,688 Accrued expenses and other liabilities 36,772 12,549 10,226 Net cash provided by operating activities 296,539 227,454 254,497 Cash Flows from Investing Activities: Capital expenditures ( 101,879 ) ( 120,554 ) ( 124,404 ) Proceeds from sale of property and equipment 300 402 409 Purchases of investments ( 406,683 ) ( 482,690 ) ( 273,522 ) Maturities of investments 328,337 347,501 247,430 Net cash used in investing activities ( 179,925 ) ( 255,341 ) ( 150,087 ) Cash Flows from Financing Activities: Repayments on finance leases ( 1,167 ) ( 1,123 ) ( 1,027 ) Payment of debt issuance costs — — ( 204 ) Proceeds from stock option exercises 18,658 23,995 6,686 Common shares withheld for taxes ( 5,701 ) ( 3,115 ) ( 1,658 ) Payment for shares repurchased ( 73,847 ) ( 53,009 ) ( 52,541 ) Net cash used in financing activities ( 62,057 ) ( 33,252 ) ( 48,744 ) Net (decrease) increase in cash and cash equivalents 54,557 ( 61,139 ) 55,666 Cash and cash equivalents, beginning of the period 205,123 266,262 210,596 Cash and cash equivalents, end of the period $ 259,680 $ 205,123 $ 266,262 Supplemental disclosure of cash flow information: Cash paid during the year for: Interest $ 457 $ 451 $ 419 Income taxes $ 59,403 $ 70,353 $ 48,601 Non-cash investing activities: Accrued purchases of property and equipment $ 12,089 $ 8,407 $ 11,270 See accompanying Notes to the Consolidated Financial Statements. 46 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (1) Basis of Presentation and Summary of Significant Accounting Policies (a) Description of Business Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries (collectively referred to as the “Company” or “Ollie’s”) is a leading off-price retailer of brand name household products. The Company principally buys and sells overproduced, overstocked, and closeout merchandise from manufacturers, wholesalers, and other retailers. In addition, the Company augments its name-brand closeout deals with directly sourced private label products featuring names exclusive to Ollie’s in order to provide consistently value-priced goods in select key merchandise categories. Since its first store opened in 1982, the Company has grown to 645 retail locations in 34 states as of January 31, 2026. Ollie’s Bargain Outlet retail locations are located in Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, and Wisconsin. (b) Fiscal Year Ollie’s follows a 52/53-week fiscal year, which ends on the Saturday nearer to January 31 st of the following calendar year. References to the fiscal year ended January 31, 2026 refer to the 52-week period from February 2, 2025 to January 31, 2026 (“2025”). References to the fiscal year ended February 1, 2025 refer to the 52-week period from February 4, 2024 to February 1, 2025 (“2024”). References to the fiscal year ended February 3, 2024 refer to the 53-week period from January 29, 2023 to February 3, 2024 (“2023”). (c) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions have been eliminated in consolidation. (d) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (e) Cash, Cash Equivalents, and Short-term Investments The Company considers cash on hand in stores, bank deposits, credit card receivables, and all highly liquid investments such as money market funds, treasury bonds, corporate bonds, U.S. agency bonds, and municipal bonds with maturities of three months or less at the date of acquisition to be cash and cash equivalents. Investments with maturities greater than three months, but less than 1 year at the date of acquisition are classified as short-term investments. Amounts receivable from debit card and credit card issuers are typically converted to cash within one to two business days of the original sales transaction. (f) Fair Value Disclosures Fair value is defined as the price which the Company would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three‑level hierarchy used in measuring fair value, as follows: • Level 1 inputs are quoted prices available for identical assets and liabilities in active markets. • Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data. • Level 3 inputs are unobservable, developed using the Company’s estimates and assumptions, which reflect those that market participants would use. 47 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Ollie’s financial instruments consist of cash and cash equivalents, investment securities, accounts receivable, accounts payable, and the Company’s credit facilities. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable are representative of their respective fair value because of their short-term nature. Under the fair value hierarchy, the fair market values of cash equivalents and the investments in treasury bonds are Level 1 while the investments in U.S agency bonds, municipal , and corporate bonds are Level 2. Since quoted prices in active markets for identical assets are not available, these prices are determined by a third-party pricing service using observable market information such as quotes from less active markets and quoted prices of similar securities. As of January 31, 2026 and February 1, 2025, the Company’s investment securities are classified as held-to-maturity since the Company has both the intent and ability to hold the investments to maturity. Such securities are carried at amortized cost plus accrued interest and consist of the following: As of January 31, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value (in thousands) Short-term: Treasury Bonds $ 25,827 $ 3 $ - $ 25,830 Corporate Bonds 10,801 111 ( 89 ) 10,823 Total $ 36,628 $ 114 $ ( 89 ) $ 36,653 Long-term: Treasury Bonds $ 48,447 $ - $ ( 554 ) $ 47,893 U.S. Agency Bonds 15,090 - ( 83 ) 15,007 Corporate Bonds 202,918 2,967 ( 939 ) 204,946 Total $ 266,455 $ 2,967 $ ( 1,576 ) $ 267,846 As of February 1, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value (in thousands) Short-term: Treasury Bonds $ 141,324 $ 48 $ ( 7 ) $ 141,365 Municipal Bonds 28,028 2 ( 131 ) 27,899 Corporate Bonds 54,194 321 ( 174 ) 54,341 Total $ 223,546 $ 371 $ ( 312 ) $ 223,605 Short-term investment securities as of January 31, 2026 and February 1, 2025 all mature in one year or less. Long-term investment securities as of January 31, 2026 all mature after one year but within three years. 48 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (g) Concentration of Credit Risk 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. The Company’s operating cash balances are in excess of the FDIC insurance limit. 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. (h) Inventories Inventories are stated at the lower of cost or market determined using the retail inventory method on a first-in, first-out basis. The cost of inventories includes the merchandise cost, transportation costs, and certain distribution and storage costs. Such costs are thereafter expensed as cost of sales upon the sale of the merchandise. Inherent in the retail inventory method are certain management judgments and estimates including, among others, merchandise markups, the amount and timing of permanent markdowns, and shrinkage, which may significantly impact both the ending inventory valuation and gross profit. Factors considered in the determination of permanent markdowns include inventory obsolescence, excess inventories, current and anticipated demand, age of the merchandise, and customer preferences. Pursuant to the retail inventory method, permanent markdowns result in the devaluation of inventory and the resulting gross profit reduction is recognized in the period in which the markdown is recorded. The Company calculates its shrink provision based on actual physical inventory results during the fiscal period and an accrual for estimated shrink occurring subsequent to a physical inventory through the end of the fiscal reporting period. This accrual is calculated as a percentage of sales for each retail store, at a department level, based on the Company’s most recent historical shrink rate adjusted, if necessary, for current economic conditions and business trends. (i) Property and Equipment Property and equipment are stated at original cost less accumulated depreciation and amortization. Depreciation and amortization are calculated over the estimated useful lives of the related assets . Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the related lease term. The lease term used for amortization includes renewal extension periods when the Company is reasonably certain that such lease will be extended. Expenditures for additions, renewals, and betterments are capitalized; expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed on the straight-line method for financial reporting purposes. The useful lives for the purpose of computing depreciation and amortization are as follows: Software 3 - 5 years Automobiles 2 - 5 years Computer equipment 5 years Furniture, fixtures, and equipment 7 - 10 years Buildings 40 years The Company capitalizes direct internal and external development costs associated with internal-use software. These costs will be depreciated over the useful life of the software on a straight-line basis. Neither preliminary evaluation costs nor costs associated with the software after implementation are capitalized. For 2025, 2024, and 2023, the Company capitalized costs of approximately $ 2.1 million, $ 1.2 million, and $ 0.8 million, respectively. (j) Goodwill/Intangible Assets The Company amortizes intangible assets over their useful lives unless it determines such lives to be indefinite. Goodwill and intangible assets having indefinite useful lives are not amortized to earnings, but instead are subject to annual impairment testing or more frequently if events or circumstances indicate that the value of goodwill or intangible assets having indefinite useful lives might be impaired. 49 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Goodwill and intangible assets having indefinite useful lives are tested for impairment annually in the fiscal month of October. The Company has the option to evaluate qualitative factors to determine if it is more likely than not that the carrying amount of its sole reporting unit or its nonamortizing intangible assets (consisting of a tradename) exceed their implied respective fair value and whether it is necessary to perform a quantitative analysis to determine impairment. As part of this qualitative assessment, the Company weighs the relative impact of factors that are specific to its sole reporting unit or its nonamortizing intangible assets as well as industry, regulatory and macroeconomic factors that could affect the inputs used to determine the fair value of the assets. If management determines a quantitative goodwill impairment test is required, or it elects to perform a quantitative test, the test is performed by determining the fair value of the Company’s sole reporting unit. Fair value is determined based on the Company’s public market capitalization. The carrying value of goodwill is considered impaired when the reporting unit’s fair value is less than its carrying value and the Company would record an impairment loss equal to the difference, not to exceed the total amount of goodwill allocated to the reporting unit. For 2025, 2024, and 2023, the Company completed an impairment test of its goodwill and determined that no impairment of goodwill existed. If management determines a quantitative analysis of intangible assets having indefinite useful lives is required, the test is performed using the discounted cash flow method based on management’s projections of future revenues and an estimated royalty rate to determine the fair value of the asset, specifically, the Company’s tradename. An impairment loss is recognized for any excess of the carrying amount of the asset over the implied fair value of that asset. For 2025, 2024, and 2023, the Company completed an impairment test of its tradename and determined that no impairment of the asset existed. (k) Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. (l) Stock-Based Compensation The Company measures the cost of employee services received in exchange for stock-based compensation based on the grant date fair value of the employee stock award. For stock option awards, the Company estimates grant date fair value using the Black-Scholes option pricing model. For restricted stock unit awards, grant date fair value is determined based on the closing trading value of the Company’s stock on the date of grant. In both cases, stock-based compensation is recorded on a straight-line basis over the vesting period for the entire award. (m) Cost of Sales Cost of sales includes merchandise costs, inventory markdowns, shrinkage and transportation, distribution and warehousing costs, including depreciation and amortization. (n) Selling, General, and Administrative Expenses Selling, general, and administrative expenses (“SG&A”) are comprised of payroll and benefits for stores, 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. (o) Advertising Costs Advertising costs primarily consist of print flyers, digital media, email campaigns, and media broadcasts and are generally expensed the first time the advertising occurs. Advertising expense for 2025, 2024, and 2023 was $ 77.3 million, $ 69.8 million, and $ 64.5 million, respectively. 50 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (p) Operating Leases The Company generally leases its store locations, distribution centers , and office facilities. Many of the lease agreements contain rent holidays, rent escalation clauses , and contingent rent provisions – or some combination of these items. For leases of store locations and the store support centers, the Company recognizes rent expense in SG&A. For leases of distribution centers, the Company recognizes rent expense within cost of sales. All rent expense is recorded on a straight-line basis over the accounting lease term, which includes lease renewals determined to be reasonably certain. The Company recognizes operating lease assets and liabilities at the lease commencement date in accordance with ASC 842, Leases (Topic 842). Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the Company’s right to use an underlying asset for the lease term. The Company’s lessors do not provide an implicit rate, nor is one readily available, therefore the Company uses its incremental borrowing rate based on the portfolio approach, which applies one rate to leases within a given period. The incremental borrowing rate is used to discount future cash flows and is an estimate which is determined by an analysis of the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and current market conditions. (q) Pre-Opening Expenses Pre-opening expenses consist of expenses of opening new stores and distribution centers, as well as store remodel and store 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 . 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 closing costs primarily consist of insurance deductibles, rent, and store payroll. (r) Self‑Insurance Under a number of the Company’s insurance programs, which include the Company’s employee health insurance program, its workers’ compensation and general liability insurance programs, the Company is liable for a portion of its losses. The Company estimates the accrued liabilities for its self-insurance programs using historical claims experience and loss reserves. To limit the Company’s exposure to losses, a stop‑loss coverage is maintained through third‑party insurers. (s) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Ollie’s files consolidated federal and state income tax returns. For tax years prior to 2022, the Company is no longer subject to U.S. federal income tax examinations. State income tax returns are filed in various state tax jurisdictions, as appropriate, with varying statutes of limitation and remain subject to examination for varying periods up to three to four years depending on the state. (t) Earnings per Common Share Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding, after giving effect to the potential dilution, if applicable, from the assumed exercise of stock options into shares of common stock as if those stock options were exercised and the assumed lapse of restrictions on restricted stock units. 51 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table summarizes those effects for the diluted earnings per common share calculation: Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 (in thousands) Weighted average number of common shares outstanding – Basic 61,322 61,339 61,741 Incremental shares from the assumed exercise of outstanding stock options and vesting of restricted stock units 451 428 327 Weighted average number of common shares outstanding – Diluted 61,773 61,767 62,068 The effect of the weighted average assumed exercise of stock options outstanding, totaling 97,336 , 262,523 , and 582,645 as of January 31, 2026, February 1, 2025, and February 3, 2024, respectively, were excluded from the calculation of diluted weighted average common shares outstanding because the effect would have been antidilutive. The effect of weighted average non-vested restricted stock units outstanding, totaling 9,284 , 1,239 , and 11,717 as of January 31, 2026, February 1, 2025, and February 3, 2024, respectively, were excluded from the calculation of diluted weighted average common shares outstanding because the effect would have been antidilutive. (u) Recently Issued Accounting Standards Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which modifies the disclosure requirements for income taxes. This ASU requires disclosure of tabular statutory to effective rate reconciliation in both percentages and dollars, additional disaggregated rate reconciliation categories, and disaggregation of both income taxes paid and income tax expense by jurisdiction. The Company adopted this ASU for the fiscal year ended January 31, 2026 on a prospective basis. See Note 8 “Income Taxes” in the accompanying notes to the consolidated financial statements for further detail. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures”. This new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The Company adopted this ASU in fiscal 2024. Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”) which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. This guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” This ASU modernizes the capitalization criteria for internal-use software by eliminating references to project stages and clarifying the threshold applied to begin capitalizing costs. This guidance is effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements. 52 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements In December 2025, the FASB issued ASU 2025-11 “Interim Reporting (Topic 270): Narrow-Scope Improvements.” This ASU amends Topic 270 to clarify interim reporting requirements and enhance consistency. It is not intended to significantly change interim reporting or expand or reduce interim disclosure requirements. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to correct, clarify, and otherwise improve U.S. GAAP. This ASU includes 33 improvements that span a wide range of topics and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. (2) Net Sales Ollie’s recognizes retail sales in its stores when merchandise is sold and the customer takes possession of merchandise. Also included in net sales is revenue allocated to certain redeemed discounts earned via the Ollie’s Army loyalty program, revenue from Ollie’s co-branded credit card, and gift card breakage. Net sales are presented net of returns and sales tax. The Company provides an allowance for estimated retail merchandise returns based on prior experience. Revenue Recognition Revenue is deferred for the Ollie’s Army loyalty program where members accumulate points that can be redeemed for discounts on future purchases. The Company has determined it has an additional performance obligation to Ollie’s Army members at the time of the initial transaction. The Company allocates the transaction price to the initial transaction and the discount awards based upon its relative standalone selling price, which considers historical redemption patterns for the award. Revenue is recognized as those discount awards are redeemed. Discount awards issued upon the achievement of specified point levels are subject to expiration. Unless temporarily extended, the maximum redemption period is 45 days. At the end of each fiscal period, unredeemed discount awards and accumulated points to earn a future discount award are reflected as a liability. Discount awards are combined in one homogeneous pool and are not separately identifiable. Therefore, the revenue recognized consists of discount awards redeemed that were included in the deferred revenue balance at the beginning of the period as well as discount awards issued during the current period. The following table is a reconciliation of the liability related to this program: Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 (in thousands) Beginning balance $ 13,239 $ 10,159 $ 8,130 Revenue deferred 29,088 19,952 16,141 Revenue recognized ( 29,227 ) ( 16,872 ) ( 14,112 ) Ending balance $ 13,100 $ 13,239 $ 10,159 53 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Gift card breakage for gift card liabilities not subject to escheatment is recognized as revenue in proportion to the redemption of gift cards. Gift cards do not expire. The rate applied to redemptions is based upon a historical breakage rate. Gift cards are combined in one homogeneous pool and are not separately identifiable. Therefore, the revenue recognized consists of gift cards that were included in the liability at the beginning of the period as well as gift cards that were issued during the period. The following table is a reconciliation of the gift card liability: Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 (in thousands) Beginning balance $ 2,766 $ 2,650 $ 2,527 Gift card issuances 5,098 5,568 5,150 Gift card redemption and breakage ( 4,975 ) ( 5,452 ) ( 5,027 ) Ending balance $ 2,889 $ 2,766 $ 2,650 Sales return allowance is recorded on a gross basis on the consolidated balance sheets as a refund liability and an asset for recovery. The allowance for estimated retail merchandise returns is based on prior experience. The following table provides a reconciliation of the activity related to the Company’s sales returns allowance: Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 (in thousands) Beginning balance $ 878 $ 1,070 $ 1,170 Provisions 59,852 56,742 57,684 Sales returns ( 59,885 ) ( 56,934 ) ( 57,784 ) Ending balance $ 845 $ 878 $ 1,070 In fiscal 2024, the Company launched a co-branded credit card that can be used by customers for making purchases at Ollie’s and everywhere else the co-branded credit card is accepted, and credit is extended to such customers by a third-party financial institution on a non-recourse basis to the Company. The co-branded credit card includes a performance obligation for the Company which includes marketing and promoting the program on behalf of the bank and the operation of the Company’s loyalty rewards program. Loyalty members earn points through purchases made using the card. The third party reimburses the Company for certain credit card program costs such as advertising and loyalty points, which help promote the credit card program. The Company recognizes revenue when collectability is reasonably assured, under the assumption the amounts are not constrained and it is probable that a significant revenue reversal will not occur in future periods, which is generally the time at which the actual usage of the credit cards or specified transaction occurs. Under the program, the Company receives a percentage of the sales generated by Ollie’s co-branded credit card, in exchange for primary marketing functions. As a result, all amounts associated with the program are recognized within net sales on the consolidated statements of income. Additionally, the Company is entitled to certain bonuses based on performance of the program. 54 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (3) Property and Equipment Property and equipment consists of the following: January 31, 2026 February 1, 2025 (in thousands) Land $ 13,742 $ 13,736 Buildings 77,246 77,240 Furniture, fixtures and equipment 377,666 333,275 Leasehold improvements 171,011 121,019 Automobiles 4,096 3,567 Construction in Progress 9,748 12,673 653,509 561,510 Less: Accumulated depreciation and amortization ( 271,267 ) ( 226,549 ) $ 382,242 $ 334,961 Depreciation and amortization expense of property and equipment was $ 55.2 million, $ 44.0 million, and $ 34.9 million in 2025, 2024, and 2023, respectively, of which $ 41.0 million, $ 33.2 million, and $ 27.8 million is included in the depreciation and amortization expenses in 2025, 2024, and 2023, respectively, on the consolidated statements of income. The remainder, as it relates to the Company’s distribution centers, is included within cost of sales on the consolidated statements of income. (4) Leases The Company generally leases its stores, offices, and distribution facilities under operating leases that expire at various dates through 2038. These leases generally provide for fixed annual rentals; however, several provide for minimum annual rentals plus contingent rentals based on a percentage of annual sales. A majority of the Company’s leases also require a payment for all or a portion of common-area maintenance, insurance, real estate taxes, water and sewer costs, and repairs, on a fixed or variable payment basis. Most of the leases contain options to renew for three to five successive five-year periods. Many of the Company’s lease agreements provide options to extend the lease term beyond the initial non-cancelable period. At lease commencement, the Company generally includes only the initial term in the lease liability and right-of-use asset, as it has determined that renewal options are not reasonably certain to be exercised. Renewal decisions are generally at the Company’s sole discretion. Upon renewal of an expiring lease, the Company reassesses the terms and includes in the lease term any extension periods that are reasonably certain to be exercised. For leases acquired through bankruptcy proceedings, the Company typically includes option periods in the lease term, as the economic penalty associated with the acquisition cost makes renewal reasonably certain. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement contains a lease at the inception of a contract. All of the Company’s leases are classified as operating leases and the associated assets and liabilities are presented as separate captions in the consolidated balance sheets. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Store and office lease costs are classified in SG&A and distribution center lease costs are classified in cost of sales on the consolidated statements of income. 55 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table summarizes the maturity of the Company’s operating lease liabilities by fiscal year as of January 31, 2026: January 31, 2026 (in thousands) 2026 $ 125,797 2027 137,081 2028 121,845 2029 101,508 2030 78,195 Thereafter 267,503 Total undiscounted lease payments (1) 831,929 Less: Imputed interest ( 147,544 ) Total lease obligations 684,385 Less: Current obligations under leases ( 108,854 ) Long-term lease obligations $ 575,531 (1) Lease obligations exclude $ 49.7 million of minimum lease payments for leases signed, but not commenced. The following table summarizes other information related to the Company’s operating leases as of and for the respective periods: Fiscal Year Ended January 31, 2026 February 1, 2025 February 3, 2024 (dollars in thousands) Cash paid for operating leases $ 127,310 $ 118,715 $ 114,184 Operating lease cost 136,013 115,592 106,302 Variable lease cost 21,078 16,832 12,463 Non-cash right-of-use assets obtained in exchange for lease obligations 134,514 106,663 53,138 Weighted-average remaining lease term 8.04 years 7.38 years 6.52 years Weighted-average discount rate 4.5 % 4.3 % 3.9 % 56 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (5) Commitments and Contingencies Contingencies From time to time the Company may be involved in claims and legal actions that arise in the ordinary course of its business. The Company cannot predict the outcome of any litigation or suit to which it is a party. However, the Company does not believe that an unfavorable decision of any of the current claims or legal actions against it, individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity, or capital resources. (6) Accrued Expenses Accrued expenses consist of the following: January 31, 2026 February 1, 2025 (in thousands) Compensation and benefits $ 23,216 $ 20,605 Deferred revenue 16,558 16,006 Freight 15,939 7,258 Insurance 11,722 8,495 Sales and use taxes 10,063 9,034 Property and equipment 8,763 5,570 Advertising 6,636 2,178 Real estate related 6,250 5,114 Other 12,710 13,595 $ 111,857 $ 87,855 (7) Debt Obligations and Financing Arrangements Long-term debt consists of finance leases. The Company’s Credit Facility provides for a five-year $ 100.0 million revolving credit facility, which includes a $ 45.0 million sub-facility for letters of credit and a $ 25.0 million sub-facility for swingline loans (the “Revolving Credit Facility”). In addition, the Company may at any time add term loan facilities or additional revolving commitments up to $ 150.0 million pursuant to terms and conditions set out in the Credit Facility. On January 9, 2024, the Company refinanced its Credit Facility, pursuant to which the maturity date for any loans under the revolving credit facility was extended for a period of five years from the effective date of January 9, 2024 and a zero percent ( 0.0 %) interest rate floor was added to the option for the SOFR Loan Rate (as defined in the Amendment). Loans under the Revolving Credit Facility mature on January 9, 2029 . As a result of the anticipated discontinuation of LIBOR in 2023, on January 24, 2023, the Company amended its Credit Facility to replace the LIBOR-based interest rates included therein with SOFR-based interest rates and to modify the provisions for determining an alternative rate of interest upon the occurrence of certain events relating to the availability of interest rate benchmarks. The interest rates for the Credit Facility are calculated as follows: for ABR Loans, the highest of the Prime Rate, the Federal Funds Effective Rate plus 0.50 % and Term SOFR with a term of one-month in effect on such day plus the SOFR Spread Adjustment plus 1.0 %, plus the Applicable Margin, or, for SOFR Loans, the SOFR Loan Rate plus the Applicable Margin plus the SOFR Spread Adjustment. The Applicable Margin will vary from 0.00 % to 0.50 % for an ABR Loan and 1.00 % to 1.50 % for a SOFR Loan, based on availability under the Credit Facility. The SOFR Loan Rate is subject to a 0 % floor. 57 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Under the terms of the Revolving Credit Facility, as of January 31, 2026, the Company could borrow up to 90.0 % of the most recent appraised value (valued at cost, discounted for the current net orderly liquidation value) of its eligible inventory, as defined, up to $ 100.0 million. As of January 31, 2026, the Company had no outstanding borrowings under the Revolving Credit Facility, with $ 86.5 million of borrowing availability, outstanding letters of credit commitments of $ 13.3 million, and $ 0.2 million of rent reserves. The Revolving Credit Facility also contains a variable unused line fee ranging from 0.125 % to 0.250 % per annum. The Company incurred unused line fees of $ 0.1 million in each of the years ended 2025, 2024, and 2023. The Credit Facility is collateralized by the Company’s assets and equity and contains a financial covenant, as well as certain business covenants, including restrictions on dividend payments, which the Company must comply with during the term of the agreement. The financial covenant is a consolidated fixed charge coverage ratio test of at least 1.0 to 1.0 applicable during a covenant period, based on reference to availability. The Company was in compliance with all terms of the Credit Facility during 2025. The provisions of the Credit Facility restrict all of the net assets of the Company’s consolidated subsidiaries, which constitutes all of the net assets on the Company’s consolidated balance sheet as of January 31, 2026, from being used to pay any dividends or make other restricted payments to the Company without prior written consent from the financial institutions that are a party to the Credit Facility, subject to material exceptions including proforma compliance with the applicable conditions described in the Credit Facility. (8) Income Taxes The components of the income tax provision (benefit) are as follows: Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 (in thousands) Current: Federal $ 51,013 $ 43,127 $ 45,871 State 15,975 13,678 13,930 66,988 56,805 59,801 Deferred: Federal 10,095 8,571 1,915 State ( 1,295 ) 676 ( 670 ) 8,800 9,247 1,245 Income tax expense $ 75,788 $ 66,052 $ 61,046 58 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements As further described in Note 1 “Recently Adopted Accounting Pronouncements,” the Company has elected to prospectively adopt the guidance in ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Taxes Disclosures,” or ASU 2023-09. The following table is a reconciliation of the U.S. federal statutory rate of 21.0 % to the Company’s effective income tax rate for the year ended January 31, 2026 in accordance with the guidance in ASU No. 2023-09: Fiscal year ended January 31, 2026 Amount (in thousands) Percent Provision for income taxes at U.S. federal statutory rate $ 66,445 21.0 % State and local income taxes, net of federal benefit (a) 11,597 3.7 Excess tax benefits related to stock-based compensation ( 3,461 ) ( 1.1 ) Tax credits ( 2,117 ) ( 0.7 ) Nontaxable/nondeductible items 3,324 1.1 Total tax provision and effective tax rate $ 75,788 24.0 % (a) During the year ended January 31, 2026, state and local income taxes in Pennsylvania, New York, Florida, Georgia, Virginia, Tennessee, and Michigan comprised greater than 50% of the tax effect in this category. As previously disclosed for the years ended February 1, 2025 and February 3, 2024, prior to the adoption of ASU 2023-09, the following table is a reconciliation of the U.S. federal statutory rate of 21.0 % to the Company’s effective income tax rate: Fiscal year ended February 1, 2025 February 3, 2024 Statutory federal rate 21.0 % 21.0 % State taxes, net of federal benefit 4.3 4.3 Excess tax benefits related to stock-based compensation ( 1.1 ) ( 0.3 ) Other 0.7 0.2 24.9 % 25.2 % The following table presents income taxes paid (net of refunds received) for the year ended January 31, 2026 (in thousands): Income Taxes Paid U.S. Federal $ 43,222 U.S. State Pennsylvania 3,950 Other 12,231 U.S. State Subtotal 16,181 Total $ 59,403 59 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Deferred income taxes reflect the effect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the carrying amounts used for income tax reporting purposes. Significant components of deferred tax assets and liabilities are as follows: January 31, 2026 February 1, 2025 (in thousands) Deferred tax assets: Inventory reserves $ 1,332 $ 999 Lease liabilities 169,746 141,654 Stock-based compensation 2,921 3,746 Deferred revenue 3,368 3,329 Other 3,228 3,548 Total deferred tax assets 180,595 153,276 Deferred tax liabilities: Tradename ( 57,160 ) ( 57,964 ) Depreciation ( 48,642 ) ( 36,932 ) Operating lease right-of-use assets ( 164,717 ) ( 139,504 ) Total deferred tax liabilities ( 270,519 ) ( 234,400 ) Net deferred tax liabilities $ ( 89,924 ) $ ( 81,124 ) In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income and the scheduled reversal of deferred liabilities over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences as of January 31, 2026 and February 1, 2025. Ollie’s has no material accrual for uncertain tax positions or interest or penalties related to income taxes on the Company’s consolidated balance sheets as of January 31, 2026 or February 1, 2025, and has no t recognized any material uncertain tax positions or interest or penalties related to income taxes in the consolidated statements of income for 2025, 2024 or 2023. On July 4, 2025, the U.S. federal government enacted the “One Big Beautiful Bill Act” resulting in significant changes to the federal tax code, most notably the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 and the restoration of favorable tax treatment for certain business provisions. The Company has evaluated and incorporated the effects of the legislation in its income tax provision for the fifty-two weeks ended January 31, 2026. (9) Equity Incentive Plans In connection with its initial public offering, the Company adopted the 2015 equity incentive plan (the “2015 Plan”) pursuant to which the Company’s Board of Directors may grant stock options, restricted shares or other awards to employees, directors and consultants. The 2015 Plan allowed for the issuance of up to 5,250,000 shares. Awards were made pursuant to agreements and are subject to vesting and other restrictions as determined by the Board of Directors or the Compensation Committee of the Board. The Company uses authorized and unissued shares to satisfy share award exercises. After adoption of the 2025 Plan as described below, no additional equity grants were made under the 2015 Plan, although equity grants made under the 2015 Plan will continue to be governed by the 2015 Plan. 60 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements As of June 12, 2025, upon stockholder approval of the same at the Company’s annual meeting, the Company adopted a new 2025 Equity Incentive Plan (the “2025 Plan”). Pursuant to the 2025 Plan, the Company’s Board of Directors may grant stock options, restricted shares, restricted stock units, or other awards to officers, directors, key employees, and professional service providers, pursuant to agreements and subject to vesting and other restrictions as determined by the Board of Directors. As of January 31, 2026, there were 4,909,853 shares available for grant under the 2025 Plan. Stock Options The exercise price for stock options is determined at the fair value of the underlying stock on the date of grant. The vesting period for awards granted is generally set at four years ( 25 % ratably per year). Awards are subject to employment for vesting, expire 10 years from the date of grant, and are not transferable other than upon death. A summary of the Company’s stock option activity and related information follows for 2023, 2024 and 2025: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value (in thousands, except share and per share amounts) Outstanding at January 28, 2023 1,209,251 $ 53.92 Granted 144,630 57.91 Forfeited ( 54,119 ) 62.90 Exercised ( 180,278 ) 37.09 Outstanding at February 3, 2024 1,119,484 56.71 Granted 126,683 75.37 Forfeited ( 8,645 ) 65.72 Exercised ( 453,859 ) 52.87 Outstanding at February 1, 2025 783,663 61.85 Granted 99,718 111.16 Forfeited ( 3,982 ) 56.61 Exercised ( 284,978 ) 65.47 Outstanding at January 31, 2026 594,421 68.42 6.9 $ 25,112 Exercisable at January 31, 2026 261,863 58.77 5.7 $ 13,497 The intrinsic value of stock options exercised for 2025, 2024 and 2023 was $ 16.3 million, $ 19.6 million and $ 5.8 million, respectively. 61 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The weighted average grant date fair value per option for options granted during 2025, 2024 and 2023 was $ 53.80 , $ 39.27 , and $ 29.07 , respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model that used the weighted average assumptions in the following table: Fiscal Year Ended January 31, 2026 February 1, 2025 February 3, 2024 Risk-free interest rate 4.08 % 4.27 % 3.36 % Expected dividend yield — — — Expected life 5.32 years 6.25 years 6.25 years Expected volatility 48.20 % 47.63 % 47.16 % To estimate the expected life of stock options, the Company uses its historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants. For expected volatility, the Company uses its historical information over the expected life of the option granted to calculate the fair value of option grants. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. Restricted Stock Units Restricted stock units (“RSUs”) are issued at the closing price of the Company’s common stock on the date of grant. RSUs outstanding generally vest ratably over four years or cliff vest in one or four years . Awards are subject to employment for vesting and are not transferable other than upon death. A summary of the Company’s RSU activity and related information for 2023, 2024 and 2025 is as follows: Number of shares Weighted average grant date fair value Nonvested balance at January 28, 2023 276,278 50.32 Granted 205,663 58.10 Forfeited ( 27,783 ) 53.24 Vested ( 103,354 ) 52.70 Nonvested balance at February 3, 2024 350,804 53.94 Granted 173,376 74.90 Forfeited ( 18,682 ) 61.89 Vested ( 120,376 ) 54.26 Nonvested balance at February 1, 2025 385,122 62.89 Granted 121,126 113.38 Forfeited ( 21,294 ) 78.56 Vested ( 146,471 ) 61.53 Nonvested balance at January 31, 2026 338,483 80.56 62 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Stock-Based Compensation Expense The compensation cost for stock options and RSUs, which have been recorded within selling, general, and administrative expenses on the condensed consolidated statements of income, related to the Company’s equity incentive plans, was $ 13.1 million, $ 19.4 million, and $ 12.2 million for 2025, 2024, and 2023, respectively. As of January 31, 2026, there was $ 23.6 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 2.5 years. Compensation costs related to awards are recognized using the straight-line method. (10) Employee Benefit Plans Ollie’s sponsors a defined contribution plan (the “Plan”), qualified under Internal Revenue Code (“IRC”) Section 401(k), for the benefit of employees. An employee becomes eligible to participate in the Plan upon attaining at least 21 years of age and completing three months of full-time employment. An employee may elect to contribute annual compensation up to the maximum allowable under the IRC. The Company assumes all administrative costs of the Plan. Beginning January 2024, the Company transitioned to a safe harbor plan and increased matches for employee contributions to 100 % of the first 3 % contributed of employee’s annual compensation, and 50 % of the next 2 % contributed for a total match of up to 4 %. Prior to the transition, the Company matched employee’s contributions up to 25 % of the first 6 % of their annual compensation and the portion that the Company matched vested ratably over six years . The enhancements under the safe harbor plan also include 100 % immediate vesting of the portion that the Company matches. The employer matching contributions to the Plan were $ 1.9 million, $ 1.6 million, and $ 0.4 million for 2025, 2024, and 2023, respectively. In addition to the regular matching contribution, the Company may elect to make a discretionary matching contribution. Discretionary contributions shall be allocated as a percentage of compensation of eligible participants for the Plan year. There were no discretionary contributions in 2025, 2024 or 2023. (11) Common Stock Common Stock The Company’s capital structure consists of a single class of common stock with one vote per share. The Company has authorized 500,000,000 shares at $ 0.001 par value per share. Additionally, the Company has authorized 50,000,000 shares of preferred stock at $ 0.001 par value per share; to date, however, no preferred shares have been issued. Treasury stock, which consists of the Company’s common stock, is accounted for using the cost method. Share Repurchase Program In December 2020, the Company’s Board of Directors authorized common stock repurchases under a share repurchase program. The authorized amount of the program, which has been increased from time to time, is authorized for up to $ 700.0 million of shares of the Company’s stock as of January 31, 2026. The share repurchase program is 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 the Company’s 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 the Company to purchase its shares during periods when it 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 the Company’s 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 the Company’s Board at any time. 63 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements During 2025, the Company repurchased 636,640 shares of its common stock for $ 73.8 million, inclusive of transaction costs, pursuant to its share repurchase program. During 2024, the Company repurchased 639,788 shares of its common stock for $ 53.0 million, inclusive of transaction costs, and during 2023, the Company repurchased 808,669 shares of its common stock for $ 52.5 million, inclusive of transaction costs. These expenditures were funded by cash generated from operations. As of January 31, 2026, the Company had $ 258.8 million remaining under its 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. (12) Segment Reporting and Entity-Wide Information For purposes of the disclosure requirements for segments of a business enterprise, it has been determined that the Company is comprised of one operating segment and one reportable segment. The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM regularly reviews operations and financial performance at a consolidated level, for purposes of assessing performance and allocating resources. The CODM uses net income to allocate resources for the single segment to make decisions regarding annual budget, new store openings, landlord and vendor negotiations, marketing decisions, pursuing new business ventures, and driving the Company’s values. The CODM reviews asset information on a consolidated basis. The following table summarizes the percentage of net sales by each product group for each year presented: Fiscal Year Ended January 31, 2026 February 1, 2025 February 3, 2024 (in thousands) Consumables (1) $ 846,305 31.9 % $ 726,344 31.9 % $ 635,820 30.3 % Home (1) 749,159 28.3 % 635,871 28.0 % 614,729 29.2 % Seasonal 506,096 19.1 % 435,471 19.2 % 393,563 18.7 % Other 547,638 20.7 % 474,019 20.9 % 458,550 21.8 % Total $ 2,649,198 100.0 % $ 2,271,705 100.0 % $ 2,102,662 100.0 % (1) In fiscal 2024, the Company reclassified certain products out of the Home category and into the Consumables category. These products included cleaning supplies, floor care, and other products such as paper goods. Prior periods have been adjusted for comparability. 64 Index OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Our single segment net sales, net income, and significant expenses are as follows for fiscal 2025, 2024, and 2023: January 31, 2026 February 1, 2025 February 3, 2024 Net sales $ 2,649,198 $ 2,271,705 $ 2,102,662 Cost of sales 1,576,254 1,357,253 1,270,297 Selling, general, and administrative expenses other 480,283 403,002 376,289 Occupancy 142,123 121,902 111,741 Advertising expenses (1) 73,536 68,057 62,405 Depreciation and amortization expenses (2) 40,996 33,224 27,819 Stock-based compensation expense 13,060 19,445 12,237 Pre-opening expenses 25,281 19,319 14,075 Interest income, net ( 18,719 ) ( 16,311 ) ( 14,686 ) Income tax expense 75,788 66,052 61,046 Segment income 240,596 199,762 181,439 Reconciliation of profit or loss: Adjustments and reconciling items - - - Consolidated net income $ 240,596 $ 199,762 $ 181,439 (1) Expenses reported in operating expenses, excludes advertising expenses recorded in pre-opening. (2) Expenses reported in operating expenses, excludes depreciation and amortization recorded in cost of sales. (13) Subsequent Event U.S. Tariff Update On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on the Company. The Company continues to monitor and evaluate these developments and assess their potential impact on its business, financial condition, and results of operations. 65 Index Schedule I - Condensed Financial Information of Registrant Ollie’s Bargain Outlet Holdings, Inc. (parent company only) Condensed Balance Sheets (In thousands) January 31, 2026 February 1, 2025 Assets Total current assets $ - $ - Long-term assets: Investment in subsidiaries 1,888,076 1,695,310 Total assets $ 1,888,076 $ 1,695,310 Liabilities and stockholders’ equity Total current liabilities $ - $ - Total long-term liabilities - - Total liabilities - - Stockholders’ equity: Common stock 68 67 Additional paid-in capital 761,300 735,284 Retained earnings 1,608,309 1,367,713 Treasury stock, at cost ( 481,601 ) ( 407,754 ) Total stockholders’ equity 1,888,076 1,695,310 Total liabilities and stockholders’ equity $ 1,888,076 $ 1,695,310 See accompanying Notes to Condensed Financial Statements. 66 Index Schedule I - Condensed Financial Information of Registrant Ollie’s Bargain Outlet Holdings, Inc. (parent company only) Condensed Statements of Income (In thousands) Fiscal year ended January 31, 2026 February 1, 2025 February 3, 2024 Net sales $ - $ - $ - Cost of sales - - - Gross profit - - - Selling, general, and administrative expenses - - - Depreciation and amortization expenses - - - Pre-opening expenses - - - Operating income - - - Interest expense, net - - - Income before income taxes and equity in net income of subsidiaries - - - Income tax expense - - - Income before equity in net income of subsidiaries - - - Net income of subsidiaries 240,596 199,762 181,439 Net income $ 240,596 $ 199,762 $ 181,439 See accompanying Notes to Condensed Financial Statements. 67 Index Schedule I - Condensed Financial Information of Registrant Ollie’s Bargain Outlet Holdings, Inc. (parent company only) Notes to Condensed Financial Statements 1. Basis of presentation In the parent-company-only condensed financial statements, Ollie’s Bargain Outlet Holdings, Inc.’s (the “Company”) investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The parent-company-only condensed financial statements should be read in conjunction with the Company’s consolidated financial statements. A condensed statement of cash flows was not presented because Ollie’s Bargain Outlet Holdings, Inc. had no cash flow activities during 2025, 2024 or 2023. 2. Guarantees and restrictions On January 9, 2024, Ollie’s Bargain Outlet, Inc., a subsidiary of the Company, completed a transaction in which it refinanced its Credit Facility. The Credit Facility provides for a five-year $ 100.0 million revolving credit facility, which includes a $ 45.0 million sub-facility for letters of credit and a $ 25.0 million sub-facility for swingline loans (the “Revolving Credit Facility”). The loans under the Revolving Credit Facility mature on January 9, 2029 . In addition, Ollie’s Bargain Outlet, Inc. may at any time add term loan facilities or additional revolving commitments up to $ 150.0 million pursuant to the terms and conditions set out in the Credit Facility. Under the terms of the Credit Facility, Bargain Parent, Inc., a subsidiary of the Company, guaranteed the payment of all principal and interest. In the event of a default under the Credit Facility, Bargain Parent, Inc. will be directly liable to the debt holders. As of January 31, 2026, Ollie’s Bargain Outlet, Inc. had $ 86.5 million available for borrowing under its Revolving Credit Facility. The Credit Facility is collateralized by the Company’s assets and equity and contains a financial covenant, as well as certain business covenants, including restrictions on dividend payments, which the Company must comply with during the term of the agreement. The Company was in compliance with all terms of the agreement during and as of the fiscal year ended January 31, 2026. The provisions of the Credit Facility restrict all of the net assets of the Company’s consolidated subsidiaries, which constitutes all of the net assets on the Company’s consolidated balance sheet as of January 31, 2026, from being used to pay any dividends or make other restricted payments without prior written consent from the lenders under the Credit Facility, subject to certain exceptions. 68 Index Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.