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On September 2, Ollie's Bargain Outlet Holdings (NASDAQ:OLLI) reported a second quarter that looked much stronger on the bottom line than on the sales floor. Adjusted earnings per share jumped 43.4% to $1.42, even as comparable store sales fell 1.8% and shoppers pulled back on seasonal goods. Most of that gap traces back to a one-time tariff refund, and the question now at the center of this stock is how much of Ollie's earnings growth is durable versus borrowed from Washington.
Ollie's opened 15 new stores in the quarter, bringing its total to 686 locations across 36 states, an 11.9% increase in store count from a year earlier. That expansion, not comparable sales, drove the 9.1% jump in net sales to $741.3 million. The company is more than halfway to its full-year target of 75 new stores after opening 42 in the first half. Alongside that growth, Ollie's Army membership climbed 12.7% to 18.1 million, with management pointing to shoppers between 35 and 55 as its fastest-growing group.
The bargain model is also pulling in an unusual kind of customer. Management said shoppers earning more than $100,000 are increasingly trading down to Ollie's in search of value, even as its traditional lower-income base shops less often. The closeout pipeline behind that strategy remains strong, as CEO Eric van der Valk put it: "The treasure hunt remains alive and well at Ollie's," pointing to a flexible buying model built to scoop up excess inventory other retailers need to offload. Ollie's is backing that confidence with cash, ending the quarter with $507.1 million in cash and investments and no meaningful long-term debt, while buying back $84 million of stock and raising its full-year repurchase target to roughly $175 million.
