Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) shares climbed 5.4% in premarket trading after the discount retailer reported stronger-than-expected first-quarter earnings and raised its profit outlook for fiscal 2026.
The results highlighted continued customer demand, margin expansion and disciplined cost management despite a challenging retail environment.
Earnings Outperform Expectations
For the quarter ended May 2, Ollie’s posted adjusted earnings of $0.91 per share, exceeding analyst forecasts of $0.87.
Revenue increased 14% year over year to $658.9 million, compared with $576.8 million in the same period last year. While sales came in slightly below Wall Street expectations of $662.3 million, investors focused on the stronger profitability and improved outlook.
Company Raises Fiscal 2026 Guidance
Management lifted its adjusted earnings per share forecast for fiscal 2026 to a range of $4.45 to $4.55.
The updated guidance compares with the previous outlook of $4.40 to $4.50 and raises the midpoint forecast to $4.50 from $4.45.
The increase reflects management’s confidence in the company’s operating performance and growth strategy.
Comparable Sales and Margins Improve
Comparable-store sales increased 1.7% during the quarter, driven primarily by higher average transaction values.
Gross margin expanded by 80 basis points to 41.9%, outperforming expectations as a result of lower supply-chain expenses and modest improvements in merchandise margins.
The stronger profitability demonstrated the company’s ability to manage costs effectively while maintaining its value-oriented pricing strategy.
Store Expansion Continues at a Rapid Pace
Ollie’s continued to expand its physical footprint during the quarter, opening 27 new locations.
At quarter-end, the retailer operated 672 stores across 35 states, representing approximately 15% growth compared with the prior year.
The ongoing expansion remains a key component of the company’s long-term growth strategy.
Management Highlights Resilient Business Model
President and Chief Executive Officer Eric van der Valk pointed to the company’s ability to deliver growth despite ongoing pressure on consumers.
“We delivered strong earnings growth driven by solid top line results and unit growth, robust margins, and disciplined expense control,” said Eric van der Valk, President and Chief Executive Officer. “These results underscore the durability of our business model, the strength of our value proposition, and our ability to execute through a challenging consumer backdrop.”
Loyalty Program and Share Repurchases Gain Momentum
The company’s Ollie’s Army loyalty program continued to expand, with membership rising 13% year over year to 17.5 million members.
Ollie’s also returned capital to shareholders through its share repurchase program, buying back 542,486 shares for approximately $53.4 million during the quarter.
Reflecting confidence in its financial position, the company increased its planned fiscal 2026 share repurchases to roughly $125 million, up from its previous target of $100 million.
The combination of stronger earnings, expanding margins, continued store growth and an enhanced capital return program helped reinforce investor confidence in the retailer’s outlook.