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What changed in Ollie's Bargain Outlet Holdings, Inc.'s 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Ollie's Bargain Outlet Holdings, Inc.'s 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+276 added−269 removedSource: 10-K (2025-03-26) vs 10-K (2024-03-27)

Top changes in Ollie's Bargain Outlet Holdings, Inc.'s 2026 10-K

276 paragraphs added · 269 removed · 235 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+11 added−10 removed74 unchanged
Biggest changeWe augment these opportunistic deals on brand name merchandise with directly-sourced unbranded products or those under our own private label brands and exclusively licensed recognizable brands and celebrity names. Brand name closeout merchandise represented approximately 65% and non-closeout goods and private label products collectively represented approximately 35% of the retail value of our 2023 merchandise purchases.
Biggest changeOur product assortment frequently changes based on the wide variety of deals available from the hundreds of brand name suppliers we have relationships with. We augment these opportunistic deals on brand name merchandise with directly-sourced unbranded products or those under our own private label brands and exclusively licensed recognizable brands and celebrity names.
This approach results in frequently changing product assortments and localized offerings which encourage shopper frequency and a “shop now” sense of urgency as customers hunt to discover the next deal. The common element of our dynamic merchandise selection is the consistent delivery of great deals to our customers, with products offered at prices typically 20 to 70% off traditional retailers.
This approach results in frequently changing product assortments and localized offerings that encourage shopper frequency and a “shop now” sense of urgency as customers hunt to discover the next deal. The common element of our dynamic merchandise selection is the consistent delivery of great deals to our customers, with products offered at prices typically 20 to 70% off traditional retailers.
Our existing systems are scalable to support future growth. 10 Index Government regulation We are subject to state and federal laws including labor and employment laws, including minimum wage requirements and wage and hour laws, laws governing advertising, privacy laws, safety regulations, environmental laws and regulations, and other laws, including consumer protection regulations that regulate retailers and/or govern product standards, the promotion and sale of merchandise and the operation of stores and warehouse facilities.
Our existing systems are scalable to support future growth. 11 Index Government regulation We are subject to state and federal laws including labor and employment laws, including minimum wage requirements and wage and hour laws, laws governing advertising, privacy laws, safety regulations, environmental laws and regulations, and other laws, including consumer protection regulations that regulate retailers and/or govern product standards, the promotion and sale of merchandise and the operation of stores and warehouse facilities.
Our distinctive and often self-deprecating humor and highly recognizable caricatures are used in our stores, flyers, mailers, website and email campaigns. We attempt to make our customers laugh as we poke fun at ourselves and current events. We believe this approach creates a strong connection to our brand and sets us apart from other, more traditional retailers.
Our distinctive and often self-deprecating humor and highly recognizable caricatures are used in our stores, flyers, mailers, website, email campaigns, and digital marketing. We attempt to make our customers laugh as we poke fun at ourselves and current events. We believe this approach creates a strong connection to our brand and sets us apart from other, more traditional retailers.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act are available free of charge on our website, www.ollies.us, as soon as reasonably practicable after the electronic filing of such reports with the Securities and Exchange Commission (“SEC”).
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act are available free of charge on our website, www.ollies.com, as soon as reasonably practicable after the electronic filing of such reports with the Securities and Exchange Commission (“SEC”).
We believe that our consistent store performance, strategically-located distribution centers, and disciplined approach to site selection support the portability and predictability of our new unit growth strategy. Highly experienced and passionate management team . Our leadership team has guided our organization through its expansion and positioned us for continued growth. We have assembled a talented and dedicated team of executives.
We believe that our consistent store performance, strategically-located distribution centers, and disciplined approach to site selection support the portability and predictability of our growth strategy. Highly experienced and passionate management team . Our leadership team has guided our organization through its expansion and positioned us for continued growth. We have assembled a talented and dedicated team of executives.
At the same time, the retail side of the closeout industry is highly fragmented, with many independent operators and small format stores. 1 Index Our constantly changing merchandise assortment is procured by a highly experienced merchant team, who leverage deep, long-standing relationships with hundreds of major manufacturers, wholesalers, distributors, brokers, and retailers.
At the same time, the retail side of the closeout industry is highly fragmented, with many independent operators and small format stores. Our constantly changing merchandise assortment is procured by a highly experienced merchant team, who leverage deep, long-standing relationships with hundreds of major manufacturers, wholesalers, distributors, brokers, and retailers.
Our disciplined real estate strategy focuses on infilling existing geographies as well as expanding into contiguous markets in order to leverage our distribution infrastructure, field management team, store management, marketing investments and brand awareness. We maintain a pipeline of real estate sites that have been approved by our real estate committee.
Our disciplined real estate strategy focuses on infilling existing geographies as well as expanding into contiguous markets in order to leverage our distribution infrastructure, field management team, store management, marketing investments and brand awareness. 8 Index We maintain a pipeline of real estate sites that have been approved by our real estate committee.
Store team leaders and co-team leaders are also responsible for the hiring, training, and development of associates. We work tirelessly to hire talented people, to improve our ability to assess talent during the interview process and to regularly train those individuals at Ollie’s who are responsible for interviewing candidates.
Store team leaders and co-team leaders are also responsible for the hiring, training, and development of associates. 9 Index We work tirelessly to hire talented people, to improve our ability to assess talent during the interview process and to regularly train those individuals at Ollie’s who are responsible for interviewing candidates.
These factors provide us with increased access to goods, which enable us to be more selective in our deal-making and, we believe, help us provide compelling value and assortment of goods to our customers and fuel our continued profitable growth. Distinctive brand and engaging shopping experience .
These factors provide us with increased access to goods, which enable us to be more selective in our deal-making and, we believe, help us provide compelling value and assortment of goods to our customers and fuel our continued profitable growth. 2 Index Distinctive brand and engaging shopping experience .
This approach leverages our distribution infrastructure, field management team, store management, marketing investments and brand awareness. We expect our new store openings to be the primary driver of our continued, consistent growth in sales and profitability. Increase our offerings of great bargains.
This approach leverages our distribution infrastructure, field management team, store management, marketing investments and brand awareness. We expect our new store openings to be the primary driver of our continued, consistent growth in sales and profitability. 3 Index Increase our offerings of great bargains.
We believe these factors result in a cohesive team focused on sustainable long-term growth. 3 Index Our growth strategy We plan to continue to drive growth in sales and profitability by executing on the following strategies: Grow our store base.
We believe these factors result in a cohesive team focused on sustainable long-term growth. Our growth strategy We plan to continue to drive growth in sales and profitability by executing on the following strategies: Grow our store base.
None of our associates belong to a union or are party to any collective bargaining or similar agreement. 11 Index Associate Training and Development Programs We offer a compelling work environment with meaningful growth and career-development opportunities.
None of our associates belong to a union or are party to any collective bargaining or similar agreement. 12 Index Associate Training and Development Programs We offer a compelling work environment with meaningful growth and career-development opportunities.
(1) 2023 consisted of 53 weeks compared with 52 weeks in the prior-year periods. Our competitive strengths We believe the following strengths differentiate us from our competitors and serve as the foundation for our current and future growth: “ Good Stuff Cheap”—Ever changing product assortment at drastically reduced prices .
(1) 2023 consisted of 53 weeks compared with 52 weeks in the prior-year periods. Our competitive strengths We believe the following strengths differentiate us from our competitors and serve as the foundation for our current and future growth: “ Good Stuff Cheap”—Ever changing product assortment of national branded products at drastically reduced prices .
Each opportunity is unique, and our merchants negotiate directly with the supplier to lock in a particular deal. Our ability to select the most attractive opportunistic purchases from a growing number of available deals enables us to provide a wide assortment of goods to our customers at great bargain prices. We source from over 1,100 suppliers.
Each opportunity is unique, and our merchants negotiate directly with the supplier to lock in a particular deal. Our ability to select the most attractive opportunistic purchases from a growing number of available deals enables us to provide a wide assortment of goods to our customers at great bargain prices. 6 Index We source from over 1,200 suppliers.
In 2023, Ollie’s Army members accounted for over 82% of net sales and spent approximately 40% more per shopping trip, on average, than non-members.
In 2024, Ollie’s Army members accounted for over 82% of net sales and spent approximately 40% more per shopping trip, on average, than non-members.
At the store level, the leadership team consists of a store team leader and potentially a co-team leader and/or an assistant team leader, who supervise the full and part-time associated within the store.
At the store level, the leadership team consists of a store team leader and potentially a co-team leader and/or an assistant team leader, who supervise the full and part-time associates within the store.
Ollie’s Army members spend approximately 40% more per shopping trip at Ollie’s than non-members. We identify our target customer as “anyone age 25 or older with a wallet or a purse” seeking a great bargain. Strong and consistent store model built for growth.
Ollie’s Army members spend approximately 40% more per shopping trip at Ollie’s than non-members. We identify our target customer as “anyone age 25 or older with a wallet or a purse” seeking a great bargain. Opportunistic real estate strategy with strong and consistent store model built for growth.
Each OLI participant receives an individual development plan, designed to prepare them for their next level position. Reflecting our belief in our “home grown” talent, OLI is our preferred source for new supervisors and team leaders. In 2023, over 45% of our current district team leaders were internally promoted to their position.
Each OLI participant receives an individual development plan, designed to prepare them for their next level position. Reflecting our belief in our “home grown” talent, OLI is our preferred source for new supervisors and team leaders. In 2024, over 60% of our current district team leaders were internally promoted to their position.
The number of associates in a fiscal year fluctuates depending on the business needs at different times of the year. As of February 3, 2024, approximately 60% of our workforce is self-identified female and approximately 40% is self-identified male. Over 40% of our workforce has self-identified as having a racial or ethnic minority background.
The number of associates in a fiscal year fluctuates depending on the business needs at different times of the year. As of February 1, 2025, approximately 60% of our workforce is self-identified female and approximately 40% is self-identified male. Over 40% of our workforce has self-identified as having a racial or ethnic minority background.
We believe that our consistent store performance, corporate infrastructure, including our distribution centers, and disciplined approach to site selection support the portability and predictability of our new unit growth strategy. 8 Index Store-level management and training Our Vice President of Store Operations oversees all store activities. Our stores are grouped into five regions, divided generally along geographic lines.
We believe that our consistent store performance, corporate infrastructure, including our distribution centers, and disciplined approach to site selection support the portability and predictability of our new unit growth strategy. Store-level management and training Our Senior Vice President of Store Operations oversees all store activities. Our stores are grouped into six regions, divided generally along geographic lines.
Our recent store growth is summarized in the following table: 2023 2022 2021 Stores open at beginning of year 468 431 388 Stores opened 45 40 46 Stores closed (1 ) (3 ) (3 ) Stores open at end of year 512 468 431 We utilize a rigorous site selection and real estate approval process in order to leverage our infrastructure, marketing investments and brand awareness.
Our recent store growth is summarized in the following table: 2024 2023 2024 Stores open at beginning of year 512 468 431 Stores opened 50 45 40 Stores closed (3 ) (1 ) (3 ) Stores open at end of year 559 512 468 We utilize a rigorous site selection and real estate approval process in order to leverage our infrastructure, marketing investments and brand awareness.
Product mix Examples of our product offerings include: • Housewares: cooking utensils, dishes, appliances, plastic containers, cutlery, storage and garbage bags, detergents and cleaning supplies, cookware and glassware, candles, hardware, frames, and giftware; • Bed and bath: household goods including bedding, towels, curtains, and associated hardware; • Food: packaged food including coffee, bottled non-carbonated beverages, salty snacks, candy, condiments, sauces, spices, dry pasta, canned goods, cereal, and cookies; • Floor coverings: laminate flooring, commercial and residential carpeting, area rugs, and floor mats; • Books and stationery: novels, children’s, how-to, business, cooking, inspirational and coffee table books, greeting cards and various office supplies, and party goods; • Electronics: home electronics, cellular accessories, and as seen on television; • Toys: dolls, action figures, puzzles, educational toys, board games, and other related items; • Health and beauty aids: personal care, hair care, oral care, health and wellness, over-the-counter medicine, first aid, sun care, and personal grooming; • Seasonal: summer furniture, air conditioners, fans and space heaters, and lawn & garden; and • Other: clothing, sporting goods, pet products, luggage, and automotive.
Our product price tags allow customers to compare our competitor’s price against Ollie’s price to further highlight the savings they can realize by shopping at our stores. 4 Index Product categories and mix Examples of our product offerings include: • Housewares: cooking utensils, dishes, appliances, plastic containers, cutlery, paper goods, storage and garbage bags, detergents and cleaning supplies, cookware and glassware, candles, hardware, frames, and giftware; • Bed and bath: household goods including bedding, towels, curtains, and associated hardware; • Food: packaged food including coffee, bottled non-carbonated beverages, salty snacks, candy, condiments, sauces, spices, dry pasta, canned goods, cereal, and cookies; • Floor coverings: laminate flooring, commercial and residential carpeting, area rugs, and floor mats; • Books and stationery: novels, children’s, how-to, business, cooking, inspirational and coffee table books, greeting cards and various office supplies; • Electronics: home electronics, cellular accessories, and as seen on television; • Toys: dolls, action figures, puzzles, educational toys, board games, and other related items; • Health and beauty aids: personal care, hair care, oral care, health and wellness, over-the-counter medicine, first aid, sun care, and personal grooming; • Seasonal: summer furniture, air conditioners, fans and space heaters, and lawn & garden; and • Other: clothing, sporting goods, pet products, luggage, and automotive.
We have remodeled 56 stores to date and 35 stores in fiscal 2023 and continue to see a sales uplift in newly remodeled locations. With a relatively low upfront investment, our remodels have produced on average a payback period of approximately two years.
We have remodeled 76 stores to date and 20 stores in fiscal 2024 and continue to see a sales uplift in newly remodeled locations. With a relatively low upfront investment, our remodels have produced on average a payback period of approximately two years.
By focusing on key characteristics such as proximity to the nearest Ollie’s store, ability to leverage distribution infrastructure, visibility, traffic counts, population densities of at least 40,000 people within ten miles and low rent per square foot, we have developed a new store real estate model that has consistently delivered attractive returns on invested capital.
By focusing on key characteristics such as proximity to the nearest Ollie’s store, ability to leverage distribution infrastructure, visibility, traffic counts, population densities, and low rent per square foot, we have developed a new store real estate model that has consistently delivered attractive returns on invested capital.
The following map shows the number of stores in each of the states in which we operated as of February 3, 2024: 7 Index Store design and layout All of our warehouse format stores incorporate the same philosophy: no-frills, bright, “semi-lovely” stores and a fun, treasure hunt shopping experience.
This resulted in fewer store remodels in fiscal 2024, and we expect this to continue in fiscal 2025. 7 Index The following map shows the number of stores in each of the states in which we operated as of February 1, 2025: Store design and layout All of our warehouse format stores incorporate the same philosophy: no-frills, bright, “semi-lovely” stores and a fun, treasure hunt shopping experience.
Our strong unit growth is supported by our predictable and compelling new store model. We target 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 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 also own registered trademarks for many of our private labels such as “Sarasota Breeze,” “Steelton Tools,” “American Way,” and “Middleton Home,” among others. We routinely prosecute trademarks where appropriate, both for private label goods and to further identify our goods and services.
In addition, we maintain a federal trademark for the image of Ollie, the face of our company. We also own registered trademarks for many of our private labels such as “Sarasota Breeze,” “Steelton Tools,” “American Way,” and “Middleton Home,” among others. We routinely prosecute trademarks where appropriate, both for private label goods and to further identify our goods and services.
Our best customers are members of our Ollie’s Army customer loyalty program, which stands at 14.0 million members as of February 3, 2024. For 2023, over 80% of our sales were from Ollie’s Army members, and we grew our base of loyal members by 5.9% in 2023.
Our best customers are members of our Ollie’s Army customer loyalty program, which stands at 15.1 million members as of February 1, 2025. For 2024, over 82% of our sales were from Ollie’s Army members, and we grew our base of loyal members by 8.3% in 2024.
Our stores generally receive shipments from our distribution centers one to two times a week, depending on the season and specific store size and sales volume. We utilize independent third party freight carriers.
Distribution and logistics We have made significant investments in our distribution network and personnel to support our store growth plan. Our stores generally receive shipments from our distribution centers one to two times a week, depending on the season and specific store size and sales volume. We utilize independent third-party freight carriers.
Associates As of February 3, 2024, we employed over 11,500 associates, approximately 5,500 of whom were full-time and approximately 6,000 of whom were part-time. Of our total associate base, approximately 1,100 were based at our store support center and distribution centers, and the remaining were store and field associates.
Associates As of February 1, 2025, we employed over 12,800 associates, approximately 5,900 of whom were full-time and approximately 6,900 of whom were part-time. Of our total associate base, approximately 1,200 were based at our store support center and distribution centers, and the remaining were store and field associates.
We also utilize targeted email marketing to highlight our latest brand name offerings and drive traffic to our stores. 9 Index Ollie’s Army Our customer loyalty program, Ollie’s Army, stands at 14.0 million members as of February 3, 2024, an increase of 5.9% from 2022.
We also utilize targeted email marketing to highlight our latest brand name offerings and drive traffic to our stores. Ollie’s Army Our customer loyalty program, Ollie’s Army, stands at 15.1 million members as of February 1, 2025, an increase of 8.3% from 2023.
As we grow, we believe our increased scale has provided and will continue to provide us with even greater access to brand name products as larger manufacturers seek larger buyers capable of acquiring an entire deal. Our merchant team augments these deals with directly sourced products, including Ollie’s own private label brands and other products exclusive to Ollie’s.
As we grow, we believe our increased scale has provided and will continue to provide us with even greater access to brand name products as larger manufacturers seek larger buyers capable of acquiring an entire deal.
Our merchandise Strategy We offer a highly differentiated, constantly evolving assortment of brand name merchandise across a broad range of categories at drastically reduced prices. Our ever-changing assortment of “Good Stuff Cheap” includes brand name closeout merchandise from leading manufacturers.
Our merchandise Strategy We sell a wide assortment of household goods. Our focus is on national branded products that consumers know and recognize. We offer a highly differentiated, constantly evolving assortment of brand name merchandise across a broad range of categories at drastically reduced prices. Our ever-changing assortment of “Good Stuff Cheap” includes brand name closeout merchandise from leading manufacturers.
From 2019 through 2023: • Our store base expanded from 345 stores to 512 stores, a compound annual growth rate, or CAGR, of 10.4% and we entered five new states; • Comparable store sales grew at an average rate of 1.0% per year; and • Net sales increased from $1.408 billion to $2.103 billion, a CAGR of 10.5%.
From 2020 through 2024: • Our store base expanded from 388 stores to 559 stores, a compound annual growth rate, or CAGR, of 9.5% and we entered six new states; • Comparable store sales grew at an average rate of 2.0% per year; and • Net sales increased from $1.809 billion to $2.272 billion, a CAGR of 5.9%.
Our focus is to provide huge savings to our customers primarily through brand name products across a broad range of merchandise. Our experienced merchant team purchases deeply discounted, branded or closeout merchandise primarily from manufacturers, retailers, distributors, and brokers. This merchandise includes overstocks, discontinued merchandise, package changes, cancelled orders, excess inventory and buybacks from retailers, and major manufacturers.
Brand name closeout merchandise Brand name closeout merchandise represented approximately 65% of the retail value of our 2024 merchandise purchases. Our focus is to provide huge savings to our customers primarily through brand name products across a broad range of merchandise. Our experienced merchant team purchases deeply discounted, branded or closeout merchandise primarily from manufacturers, retailers, distributors, and brokers.
We believe our compelling value proposition and the unique nature of our merchandise offerings have fostered our customer appeal across a variety of demographics and socioeconomic profiles. 4 Index Our warehouse format stores feature a broad number of categories including housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics as well as other products including hardware, candy, clothing, sporting goods, pet and lawn and garden products.
Our warehouse format stores feature a broad number of categories including housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics as well as other products including hardware, candy, clothing, sporting goods, pet and lawn and garden products.
Our no-frills, “semi-lovely” warehouse style stores average approximately 33,000 square feet and generate consistently strong financial returns across all vintages, geographic regions, population densities, demographic groups, real estate formats and regardless of any co-tenant. Our business model has resulted in positive financial performance during strong and weak economic cycles.
As of February 1, 2025 we have grown to 559 stores in 31 states. Our no-frills, “semi-lovely” warehouse style stores average approximately 32,000 square feet and generate consistently strong financial returns across all vintages, geographic regions, population densities, demographic groups, real estate formats and regardless of any co-tenant.
Non-closeout goods/private label Non-closeout and private label products collectively represented approximately 35% of the retail value of our 2023 merchandise purchases. We augment the breadth of our brand name merchandise with non-closeout and private label merchandise.
This merchandise includes overstocks, discontinued merchandise, package changes, cancelled orders, excess inventory and buybacks from retailers, and major manufacturers. Non-closeout goods/private label Non-closeout and private label products collectively represented approximately 35% of the retail value of our 2024 merchandise purchases. We augment the breadth of our brand name merchandise with non-closeout and private label merchandise.
Fueling the growth is the consolidation of retailers and manufacturers around the globe. Larger retailers are being supplied by larger manufacturers and this is leading to larger order and product flows. In addition, manufacturers are constantly developing and introducing new products, new packaging, and working around endless changes and disruptions in the marketplace and supply chain.
In addition, manufacturers are constantly developing and introducing new products, new packaging, and working around endless changes and disruptions in the marketplace and supply chain. This is driving growth in the number of products being offered for sale by manufacturers at closeout-type prices.
We seek to build a diverse and inclusive workplace where we can leverage our collective talents, striving to ensure that all associates are treated with dignity and respect.
We seek to build a workplace of belonging where we can leverage our collective talents, striving to ensure that all associates are treated with dignity and respect. We believe that a workforce with a diversity of viewpoints, background, experience and industry knowledge is key to our culture and long-term success.
Our flyers are typically distributed semi-monthly, for a total of 22 times per year, with increased frequency in peak shopping periods, and serve as the foundation of our marketing strategy to remain top of mind with our shoppers.
We tailor our marketing mix and strategy for each market, deal or promotion. We primarily use the following forms of marketing and advertising: • Print and direct mail : Our flyers are typically distributed semi-monthly, with increased frequency in peak shopping periods, and serve as the foundation of our marketing strategy, to remain top of mind with our shoppers.
The principal basis on which we compete against other retailers is by offering an ever-changing selection of brand name products at compelling price points in an exciting shopping environment. Accordingly, we compete against a fragmented group of retailers, wholesalers, and jobbers to acquire merchandise for sale in our stores.
Competition We compete with a diverse group of retailers, including discount, closeout, mass merchant, department, grocery, drug, convenience, hardware, variety, online, and other specialty stores. The principal basis on which we compete against other retailers is by offering an ever-changing selection of brand name products at compelling price points in an exciting shopping environment.
The following table shows the breakdown of our product offerings as a percentage of net sales for each of the last three fiscal years: Percentage of Net Sales 2023 2022 2021 Consumables 23.8 % 21.6 % 19.8 % Home 35.7 % 38.3 % 39.8 % Seasonal 18.7 % 17.8 % 18.1 % Other 21.8 % 22.3 % 22.3 % Total 100.0 % 100.0 % 100.0 % Consumables includes items such as health and beauty aids, food, candy, and pet food.
The following table shows the breakdown of our product offerings as a percentage of net sales for each of the last three fiscal years: Percentage of Net Sales 2024 2023 2022 Consumables (1) 31.9 % 30.3 % 28.2 % Home (1) 28.0 % 29.2 % 31.7 % Seasonal 19.2 % 18.7 % 17.8 % Other 20.9 % 21.8 % 22.3 % Total 100.0 % 100.0 % 100.0 % (1) In fiscal 2024, the Company reclassified certain products out of the Home category and into the Consumables category.
Since our founding in 1982, Ollie’s has been offering customers high quality brand name products at drastically reduced prices through the buying and selling of closeout merchandise and excess inventory. As we grow, we believe our increased scale provides us with even greater access to brand name closeout products as larger manufacturers seek larger buyers.
Our long history, growing size and scale and highly experienced merchant team . Since our founding in 1982, Ollie’s has been offering customers high quality brand name products at drastically reduced prices through the buying and selling of closeout merchandise and excess inventory.
Other includes items such as books and stationery, electronics, clothing, sporting goods, pet products, luggage, and automotive. 5 Index Product categories We maintain consistent average margins across our primary product categories described below. Brand name closeout merchandise Brand name closeout merchandise represented approximately 65% of the retail value of our 2023 merchandise purchases.
Seasonal includes items such as summer furniture, air conditioners, fans and space heaters, toys, and lawn & garden. Other includes items such as books and stationery, electronics, clothing, sporting goods, pet products, luggage, and automotive. 5 Index Product categories We maintain consistent average margins across our primary product categories described below.
Trademarks and other intellectual property We own multiple state and federally registered trademarks related to our brand, including “Ollie’s,” “Ollie’s Bargain Outlet,” “Good Stuff Cheap,” “Ollie’s Army,” “Real Brands Real Cheap!,” and “Real Brands! Real Bargains!,” among others. In addition, we maintain a federal trademark for the image of Ollie, the face of our company.
Our direct relationships with suppliers have increased as we have grown, and we continuously strive to broaden our supplier network. Trademarks and other intellectual property We own multiple state and federally registered trademarks related to our brand, including “Ollie’s,” “Ollie’s Bargain Outlet,” “Good Stuff Cheap,” “Ollie’s Army,” “Real Brands Real Cheap!,” and “Real Brands! Real Bargains!,” among others.
Currently, we distribute approximately 95% of our merchandise from our distribution centers in York, PA, which completed a 201,000 square feet expansion in the beginning of fiscal 2023 (804,000 square feet), Commerce, GA (962,000 square feet), and Lancaster, TX (615,000 square feet).
We currently operate four distribution centers, which supply approximately 95% of our merchandise to our stores. These distribution centers are centrally located in, York, PA (804,000 square feet), Commerce, GA (962,000 square feet), Lancaster, TX (615,000 square feet), and Princeton, IL (615,000 square feet).
Our highly flexible real estate approach has proven successful across all vintages, geographic regions, population densities, demographic groups, real estate formats and regardless of any co-tenant. Our business model has resulted in positive financial performance during strong and weak economic cycles. We have successfully opened stores in five new states since 2019, highlighting the portability of our new store model.
Our business model has resulted in positive financial performance during strong and weak economic cycles. We have successfully opened stores in six new states since 2020, highlighting the portability of our new store model.
Brand name closeout merchandise represented approximately 65% and non-closeout goods and private label products collectively represented approximately 35% of the retail value of our 2023 merchandise purchases.
Brand name closeout merchandise represented approximately 65% and non-closeout goods and private label products collectively represented approximately 35% of the retail value of our 2024 merchandise purchases. We believe our compelling value proposition and the unique nature of our merchandise offerings have fostered our customer appeal across a variety of demographics and socioeconomic profiles.
Our established relationships with our suppliers, coupled with our scale, associated buying power, financial credibility and responsiveness, often makes Ollie’s the first call for available deals. Our direct relationships with suppliers have increased as we have grown, and we continuously strive to broaden our supplier network.
Accordingly, we compete against a fragmented group of retailers, wholesalers, and jobbers to acquire merchandise for sale in our stores. Our established relationships with our suppliers, coupled with our scale, associated buying power, financial credibility and responsiveness, often makes Ollie’s the first call for available deals.
As we continue to grow, we believe our increased scale will provide us with even greater access to brand name products since many major manufacturers seek a single buyer to acquire the entire deal. 6 Index Distribution and logistics We have made significant investments in our distribution network and personnel to support our store growth plan.
Our dedication to building strong relationships with suppliers is evidenced by an average relationship of over 15-years with our top 15 suppliers. As we continue to grow, we believe our increased scale will provide us with even greater access to brand name products since many major manufacturers seek a single buyer to acquire the entire deal.
The SEC maintains a website (www.sec.gov) that contains reports, proxy, and information statements and other information regarding issuers that file electronically with the SEC. 12 Index
The contents of our website are not, however, a part of this report or intended to be incorporated by reference in any other report or document we file with the SEC. The SEC also maintains a website (www.sec.gov) that contains reports, proxy, and information statements and other information regarding issuers that file electronically with the SEC. 13 Index
Our stores offer something for everyone across a diverse range of merchandise categories at prices typically 20 to 70% off traditional retailers. Our product assortment frequently changes based on the wide variety of deals available from the hundreds of brand name suppliers we have relationships with.
We sell a wide assortment of household goods. Our focus is on national branded products that consumers know and recognize. Our stores offer something for everyone across a diverse range of merchandise categories at prices typically 20% to 70% off traditional retailers.
Our treasure hunt shopping environment and slogan “when it’s gone, it’s gone” help to instill a “shop now” sense of urgency that encourages frequent customer visits. 2 Index Our growing scale and highly experienced and disciplined merchant team .
Brand name closeout merchandise represented approximately 65% and non-closeout goods and private label products collectively represented approximately 35% of the retail value of our 2024 merchandise purchases. Our treasure hunt shopping environment and slogan “when it’s gone, it’s gone” help to instill a “shop now” sense of urgency that encourages frequent customer visits.
We expect to continue leveraging the data gathered from our proprietary database of Ollie’s Army members to better segment and target our marketing initiatives and increase shopping frequency. Competition We compete with a diverse group of retailers, including discount, closeout, mass merchant, department, grocery, drug, convenience, hardware, variety, online, and other specialty stores.
We expect to continue leveraging the data gathered from our proprietary database of Ollie’s Army members to better segment and target our marketing initiatives and increase shopping frequency. 10 Index In July of fiscal 2024, the Company launched a co-branded Visa® credit card in an effort to expand the benefits available to our Customers under the Ollie’s Army loyalty program.
With the expansion of our York, PA distribution center and the addition of our fourth distribution center, we believe our distribution capabilities will support up to 750 stores. Our stores As of February 3, 2024, we operated 512 stores, averaging approximately 33,000 square feet, across 30 contiguous states in the eastern half of the United States.
We completed the construction of our Princeton, IL distribution center in the second quarter of 2024 and began shipping product from this facility in July 2024. With the addition of our fourth distribution center, we believe our distribution capabilities will support up to 750 stores.
Our business model has produced consistently strong growth and financial performance.
Our merchant team augments these deals with directly sourced products, including Ollie’s own private label brands and other products exclusive to Ollie’s. 1 Index Our business model has produced consistently strong growth and financial performance.
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Our store base has grown organically by backfilling existing markets and leveraging our brand awareness, marketing, and infrastructure to expand into new markets in contiguous states. We have grown to 512 stores in 30 states as of February 3, 2024.
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Historically, we have expanded our store base by opening new stores organically. More recently, we have expanded our store base through acquiring former store locations of bankrupt retailers through the bankruptcy store auction process. We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner.
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We recently completed our latest Real Estate feasibility study, which utilizes population and demographic data to look at store count and density across a changing United States landscape.
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Our business model has resulted in positive financial performance during strong and weak economic cycles. The closeout industry is large, highly fragmented, and growing. Fueling the growth is the consolidation of retailers and manufacturers around the globe. Larger retailers are being supplied by larger manufacturers and this is leading to larger order and product flows.
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The migration trend out of larger metropolitan areas and into rural suburban areas is a positive trend for Ollie’s and our latest analysis concludes that we could operate as many as 1,300 stores nationwide, up from a previous target of 1,050. The closeout industry is large, highly fragmented, and growing.
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We have built our people, process and systems from the ground up around the buying and selling of closeout merchandise and excess inventory. As we grow, we believe our increased scale provides us with even greater access to brand name closeout products as larger manufacturers seek larger buyers.
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This is driving growth in the number of products being offered for sale by manufacturers at closeout type of prices.
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In an effort to expand the benefits available to our Customers under the Ollie’s Army loyalty program the Company launched a co-branded credit card which provides Ollie’s loyalty program members additional points whenever they use their Ollie’s card for purchases at Ollie’s and anywhere the co-branded card is accepted.
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Our product price tags allow customers to compare our competitor’s price against Ollie’s price to further highlight the savings they can realize by shopping at our stores.
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These products included cleaning supplies, floor care, and other products such as paper goods. Prior periods have been adjusted for comparability. Consumables includes items such as health and beauty aids, food, candy, pet food, detergents and cleaning supplies. Home includes items such as housewares, domestics, floor coverings, and hardware.
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Home includes items such as housewares, domestics, floor coverings, and hardware. Seasonal includes items such as summer furniture, air conditioners, fans and space heaters, toys, and lawn & garden.
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Our stores As of February 1, 2025, we operated 559 stores, averaging approximately 32,000 square feet, across 31 contiguous states in the eastern half of the United States. Our highly flexible real estate approach has proven successful across all vintages, geographic regions, population densities, demographic groups, real estate formats and regardless of any co-tenant.
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Our dedication to building strong relationships with suppliers is evidenced by an average relationship of over 15-years with our top 15 suppliers.
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Beginning in fiscal 2024 into fiscal 2025, the Company has acquired a number of locations from former retailers through bankruptcy auction processes. As a result of these acquisitions, the Company has increased its new store opening growth target to 75 stores for the upcoming year.
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During the first quarter of fiscal 2023, the Company purchased a parcel of land in Princeton, Illinois for its fourth distribution center and broke ground on construction of the 615,000 square feet facility in April 2023, the distribution center is expected to be operational in the second half of fiscal 2024.
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In an effort to optimize the store opening cadence the Company has prioritized the opening of these acquired locations and shifted resources accordingly.
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We tailor our marketing mix and strategy for each market, deal or promotion. We primarily use the following forms of marketing and advertising: • Print and direct mail : During 2023, we distributed over 650 million highly recognizable flyers.
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In addition, in fiscal 2024, the Company acquired a number of new locations through the bankruptcy auction processes of various retailers, at favorable rental terms and leasing structures to current market conditions. This augments the Company’s pipeline of new stores for our accelerated growth strategy. Our strong unit growth is supported by our predictable and compelling new store model.
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We believe that a workforce with a diversity of viewpoints, background, experience and industry knowledge, as well as more traditional characteristics of diversity, such as race and gender, are key to our culture and long-term success.
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The Card Program is maintained by Sunbit, a leading financial technology solutions provider. Ollies Army Members can sign up for the card in stores and online. Customers are never charged fees, and the card features industry-high approval rates. The credit card helps increase Ollie’s brand presence in customers’ wallets, fostering long-term loyalty.
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Ollie’s loyalty program members earn additional points whenever they use their Ollie’s card for purchases at Ollie’s and anywhere else the card is accepted. The program was initially launched in Pennsylvania and will be rolled out across all stores by the end of fiscal 2025.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur inability to respond effectively to competitive pressures, improved performance by our competitors, and changes in the retail markets could result in lost market share and could have a material adverse effect on our business, financial condition, and results of operations. 18 Index If we fail to open new profitable stores on a timely basis, successfully enter new markets, or implement other elements of our long-term growth strategy, our financial performance could be materially adversely affected.
Biggest changeWe cannot guarantee that we will continue to be able to successfully compete against either existing or future competitors. Our inability to respond effectively to competitive pressures, improved performance by our competitors, and changes in the retail markets could result in lost market share and could have a material adverse effect on our business, financial condition, and results of operations.
Our customers, including our Ollie’s Army loyalty program members, may determine to shop at other stores or through web- and mobile-enabled services and therefore may not be as likely to shop at our stores; • We may not be able to develop and operate our distribution centers in an efficient or effective manner and that may result in not having sufficient inventory in our stores. • The loss or disruption of one or more of our distribution centers or disruption of our supply chain or third-party shipping carriers could also make it difficult for us to timely receive or distribute merchandise to our stores; • External economic pressures over which we have no or limited control, including among other items inflation, a significant decline in economic activity across the economy, occupancy costs, and transportation costs may reduce our profitability; • Shrinkage or the loss or theft of inventory and/or inventory management may result in material negative impacts on our results of operations; • We may not be able to hire and retain the right people to run our stores and our distribution centers.
Our customers, including our Ollie’s Army loyalty program members, may determine to shop at other stores or through web- and mobile-enabled services and therefore may not be as likely to shop at our stores; • We may not be able to develop and operate our distribution centers in an efficient or effective manner and that may result in not having sufficient inventory in our stores; • The loss or disruption of one or more of our distribution centers or disruption of our supply chain or third-party shipping carriers could also make it difficult for us to timely receive or distribute merchandise to our stores; • External economic pressures over which we have no or limited control, including among other items inflation, a significant decline in economic activity across the economy, occupancy costs, and transportation costs may reduce our profitability; • Shrinkage or the loss or theft of inventory and/or inventory management may result in material negative impacts on our results of operations; and • We may not be able to hire and retain the right people to run our stores and our distribution centers.
State privacy laws and regulations, such as The Connecticut Data Privacy Act, the New York Privacy Act, and The California Consumer Privacy Act of 2018, and others, have imposed and likely will impose additional data protection obligations on companies considered to be doing business in such applicable states and provides for substantial fines for non-compliance and, in some cases, a private right of action to consumers who are victims of data breaches.
State privacy laws and regulations, such as The Connecticut Data Privacy Act, the New York Privacy Act, The California Consumer Privacy Act of 2018, The California Privacy Rights Act, and others, have imposed and likely will impose additional data protection obligations on companies considered to be doing business in such applicable states and provides for substantial fines for non-compliance and, in some cases, a private right of action to consumers who are victims of data breaches.
If our fourth fiscal quarter sales results were substantially below expectations, we would realize less cash flows from operations, and may be forced to mark down our merchandise, especially our seasonal merchandise, which could have a material adverse effect on our business, financial condition, and results of operations. 21 Index Our business requires that we lease substantial amounts of space and there can be no assurance that we will be able to continue to lease space on terms as favorable as the leases negotiated in the past.
If our fourth fiscal quarter sales results were substantially below expectations, we would realize less cash flows from operations, and may be forced to mark down our merchandise, especially our seasonal merchandise, which could have a material adverse effect on our business, financial condition, and results of operations. 23 Index Our business requires that we lease substantial amounts of space and there can be no assurance that we will be able to continue to lease space on terms as favorable as the leases negotiated in the past.
Our low-price model and competitive pressures in our industry may inhibit our ability to reflect these increased costs in the prices of our merchandise and, therefore, reduce our profitability and have a material adverse effect on our business, financial condition, and results of operations. 16 Index Our ability to generate revenue is dependent on consumer confidence and spending, which may be subject to factors beyond our control, including changes in economic and political conditions, as well as health concerns.
Our low-price model and competitive pressures in our industry may inhibit our ability to reflect these increased costs in the prices of our merchandise and, therefore, reduce our profitability and have a material adverse effect on our business, financial condition, and results of operations. 17 Index Our ability to generate revenue is dependent on consumer confidence and spending, which may be subject to factors beyond our control, including changes in economic and political conditions, as well as health concerns.
For a more complete discussion of the material risks facing our business, see below. 14 Index BUSINESS AND OPERATIONS We may not be able to execute our opportunistic buying strategy, adequately manage our supply of inventory, or anticipate customer demand, which could have a material adverse effect on our business, financial condition, and results of operations.
For a more complete discussion of the material risks facing our business, see below. 15 Index BUSINESS AND OPERATIONS We may not be able to execute our opportunistic buying strategy, adequately manage our supply of inventory, or anticipate customer demand, which could have a material adverse effect on our business, financial condition, and results of operations.
Even if our share repurchase program is fully executed, it may not enhance long-term stockholder value. Also, the amount, timing, and execution of our share repurchase program may fluctuate based on our priorities for the use of cash for other purposes and because of changes in cash flows, tax laws, and the market price of our common stock. Item 1B.
Even if our share repurchase program is fully executed, it may not enhance long-term stockholder value. Also, the amount, timing, and execution of our share repurchase program may fluctuate based on our priorities for the use of cash for other purposes and because of changes in cash flows, tax laws, and the market price of our common stock.
Failure to attract new and retain existing qualified personnel could have a material adverse effect on our business, financial condition, and results of operations. 20 Index If we are unable to attract, train, and retain highly qualified managerial personnel and sales associates in our stores and our distribution centers, our sales, financial performance, and business operations may be materially adversely affected.
Failure to attract new and retain existing qualified personnel could have a material adverse effect on our business, financial condition, and results of operations. If we are unable to attract, train, and retain highly qualified managerial personnel and sales associates in our stores and our distribution centers, our sales, financial performance, and business operations may be materially adversely affected.
A number of factors beyond our control affect the level of customer confidence and spending on the merchandise that we sell, including, among other items: • energy and gasoline prices; • shipping and transportation costs; • disposable income of our customers, which is impacted by unemployment levels, personal debt levels, and wages; • interest rates and inflation; • discounts, promotions, and merchandise offered by our competitors; • negative reports and publicity about the discount retail industry; • outbreak of viruses or widespread illness, and behavioral changes from a fear of contracting such viruses or illness; • general economic and industry conditions; • food prices; • the state of the housing market; • customer confidence in future economic conditions; • fluctuations in the financial markets; • government sponsored relief packages and governmental benefits, such as social security benefits, as affected by current cost of living adjustments, as well as any government stimulus payments and enhanced unemployment benefits; • tax rates and policies; and • natural disasters, war, terrorism, and other hostilities.
A number of factors beyond our control affect the level of customer confidence and spending on the merchandise that we sell, including, among other items: • energy and gasoline prices; • shipping and transportation costs; • disposable income of our customers, which is impacted by unemployment levels, personal debt levels, and wages; • interest rates and inflation; • discounts, promotions, and merchandise offered by our competitors; • negative reports and publicity about the discount retail industry; • outbreak of viruses or widespread illness, and behavioral changes from a fear of contracting such viruses or illness; • general economic and industry conditions; • food prices; • the state of the housing market; • customer confidence in future economic conditions; • fluctuations in the financial markets; • government sponsored relief packages and governmental benefits, such as social security benefits, as affected by current cost of living adjustments, as well as any government stimulus payments and enhanced unemployment benefits; • tax rates and policies; • repercussions, or perceived repercussions, from the current presidential administration’s policies and activities; and • natural disasters, war, terrorism, and other hostilities.
The agreements governing our Credit Facility place certain conditions on us, including restrictions that may, among other items: • increase our vulnerability to adverse general economic or industry conditions; • limit our flexibility in planning for, or reacting to, changes in our business or the industries in which we operate; • make us more vulnerable to increases in interest rates, as borrowings under our Credit Facility are at variable rates; • limit our ability to obtain additional financing in the future for working capital or other purposes; • require us to utilize our cash flows from operations to make payments on indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity, and other general corporate purposes; and • place us at a competitive disadvantage compared to our competitors that have less indebtedness.
We may, from time to time, incur additional indebtedness. 32 Index The agreements governing our Credit Facility place certain conditions on us, including restrictions that may, among other items: • increase our vulnerability to adverse general economic or industry conditions; • limit our flexibility in planning for, or reacting to, changes in our business or the industries in which we operate; • make us more vulnerable to increases in interest rates, as borrowings under our Credit Facility are at variable rates; • limit our ability to obtain additional financing in the future for working capital or other purposes; • require us to utilize our cash flows from operations to make payments on indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity, and other general corporate purposes; and • place us at a competitive disadvantage compared to our competitors that have less indebtedness.
If consumers determine to shop more online due to cultural or health concerns, those consumers may be less likely to return to brick-and-mortar retailers in the future. 17 Index Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.
If consumers determine to shop more online due to cultural or health concerns, those consumers may be less likely to return to brick-and-mortar retailers in the future. Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.
We continue to focus on ways to reduce these risks, but we cannot ensure that we will be successful in our inventory management. Inventory shrinkage could have a material adverse effect on our business, financial condition and results of operations. We are subject to the risk of inventory loss and theft.
We continue to focus on ways to reduce these risks, but we cannot ensure that we will be successful in our inventory management. 21 Index Inventory shrinkage could have a material adverse effect on our business, financial condition, and results of operations. We are subject to the risk of inventory loss and theft.
If we experience a greater number of these losses than we anticipate, it could have a material adverse effect on our business, financial condition, and results of operations. We face litigation risks from customers, associates, suppliers, stockholders, and other third parties in the ordinary course of business.
If we experience a greater number of these losses than we anticipate, it could have a material adverse effect on our business, financial condition, and results of operations. 26 Index We face litigation risks from customers, associates, suppliers, stockholders, and other third parties in the ordinary course of business.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Credit Facilities.” 31 Index We may be unable to generate sufficient cash flows to satisfy debt service obligations, which could have a material adverse effect on our business, financial condition, and results of operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Credit Facilities.” 33 Index We may be unable to generate sufficient cash flows to satisfy debt service obligations, which could have a material adverse effect on our business, financial condition, and results of operations.
In addition, the increased proliferation of mobile devices and enhanced and robust connections to mobile networks, competition from other retailers in the online and omnichannel retail marketplace is expected to continue to increase and may negatively impact our results of operations. Certain of our competitors and a number of traditional online retailers have established robust online and omnichannel operations.
In addition, the increased proliferation of mobile devices and enhanced and robust connections to mobile networks, competition from other retailers in the online and omnichannel retail marketplace is expected to continue to increase and may negatively impact our results of operations. A number of traditional online retailers have established robust online and omnichannel operations.
Our ability to timely open new stores depends in part on several factors, many of which are beyond our control, including the availability of attractive rents and store locations; the absence of occupancy delays; the ability to negotiate and enter into leases with acceptable terms; our ability to obtain and retain permits and licenses; our ability to hire, train, and retain new personnel, especially store managers, in a cost effective manner; our ability to adapt and grow our distribution and other operational and management systems to an increasing and ever evolving network of stores; the availability of capital funding for expansion; our ability to respond to the demographic shifts and general economic conditions in the many different geographic markets where our stores and distribution centers are located.
Our ability to timely open new stores depends in part on several factors, many of which are beyond our control, including the availability of attractive rents and store locations; the absence of occupancy delays; the ability to negotiate and enter into leases, or acquire ownership of properties, on acceptable terms; our ability to obtain and retain permits and licenses; our ability to hire, train, and retain new personnel, especially store managers, in a cost effective manner; our ability to adapt and grow our distribution and other operational and management systems to an increasing and ever evolving network of stores; the availability of capital funding for expansion; our ability to respond to the demographic shifts and general economic conditions in the many different geographic markets where our stores and distribution centers are located.
Any such circumstances could adversely affect our results of operations and profitability. 15 Index Fluctuations in comparable store sales and results of operations, including fluctuations on a quarterly basis, could cause our business performance to decline substantially.
Any such circumstances could adversely affect our results of operations and profitability. 16 Index Fluctuations in comparable store sales and results of operations, including fluctuations on a quarterly basis, could cause our business performance to decline substantially.
With limited exceptions, inventory is shipped directly from suppliers to our distribution centers in York, PA, Commerce, GA, and Lancaster, TX, where the inventory is processed, sorted, and shipped to our stores.
With limited exceptions, inventory is shipped directly from suppliers to our distribution centers in York, PA, Commerce, GA, Lancaster, TX, and Princeton, IL where the inventory is processed, sorted, and shipped to our stores.
Our business may be materially adversely affected by legal and regulatory risks associated with international trade. We purchase merchandise directly from suppliers located outside of the United States. In 2023, substantially all of our private label inventory purchases were direct imports. Additionally, a significant amount of our domestically purchased merchandise is manufactured in foreign countries.
Our business may be materially adversely affected by legal and regulatory risks associated with international trade. We purchase merchandise directly from suppliers located outside of the United States. During fiscal 2024, substantially all of our private label inventory purchases were direct imports. Additionally, a significant amount of our domestically purchased merchandise is manufactured in foreign countries.
The Company’s certificate of incorporation provides that, unless we consent in writing in advance to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum, to the fullest extent provided by law, for the following types of actions or proceedings: • any derivative action or proceeding brought on behalf of the Company; • any action asserting a claim of breach of a fiduciary duty owed by, or any wrongdoing by, any director, officer, or employee of the Company to the Company, or the Company’s stockholders; • any action asserting a claim arising pursuant to any provision of the Delaware General Corporate Law, the certification of incorporation (as it may be amended from time to time), or the fourth amended and restated bylaws; • any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or the fourth amended and restated bylaws; or • any action asserting a claim governed by the internal affairs doctrine. 28 Index Application of the choice of forum provision may be limited in some instances by law.
The Company’s certificate of incorporation provides that, unless we consent in writing in advance to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum, to the fullest extent provided by law, for the following types of actions or proceedings: • any derivative action or proceeding brought on behalf of the Company; • any action asserting a claim of breach of a fiduciary duty owed by, or any wrongdoing by, any director, officer, or employee of the Company to the Company, or the Company’s stockholders; • any action asserting a claim arising pursuant to any provision of the Delaware General Corporate Law, the certification of incorporation (as it may be amended from time to time), or the fourth amended and restated bylaws; • any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or the fourth amended and restated bylaws; or • any action asserting a claim governed by the internal affairs doctrine.
Without limiting the generality of the foregoing statement, certain proposals regarding federal corporate tax reform and border-adjusted taxes, taxes levied on imported goods, may result in a material adverse effect on our financial position, results of operations, and cash flows.
Without limiting the generality of the foregoing statement, certain proposals regarding federal corporate tax reform and border-adjusted taxes, and taxes, tariffs, and trade sanctions levied on imported goods, all may result in a material adverse effect on our financial position, results of operations, and cash flows.
Our ability to control labor costs is subject to numerous external factors and compliance with laws and regulatory structures, including competition for, and availability of, qualified personnel in a given market, unemployment levels within those markets, governmental regulatory bodies such as the Equal Employment Opportunity Commission (“EEOC”) and the National Labor Relations Board (“NLRB”), prevailing wage rates and wage and hour laws, minimum wage laws, the impact of legislation governing labor and employee relations or benefits, such as the Affordable Care Act (“ACA”), health insurance costs, healthcare costs (including those related to potential pandemics or disease outbreaks and related testing and vaccination costs), and our ability to maintain good relations with our associates.
Our ability to control labor costs is subject to numerous external factors and compliance with laws and regulatory structures, including competition for, and availability of, qualified personnel in a given market, unemployment levels within those markets, governmental regulatory bodies such as the Equal Employment Opportunity Commission (“EEOC”) and the National Labor Relations Board (“NLRB”), prevailing wage rates and wage and hour laws, minimum wage laws, the impact of legislation governing labor and employee relations or benefits, such as the Affordable Care Act (“ACA”), costs of health insurance and other health benefits, healthcare costs, and our ability to maintain good relations with our associates.
Processing delays or difficulties in operations at our existing distribution centers or delays in opening, processing delays, or difficulties in operations at our new distribution centers, including our Princeton, IL distribution center, could adversely affect our current operations by causing existing stores to have insufficient inventory, and could adversely affect future operations by slowing store growth, which could, in turn, reduce sales growth.
Processing delays or difficulties in operations at our existing distribution centers or delays in opening, processing delays, or difficulties in operations at our new distribution centers, could adversely affect our current operations by causing existing stores to have insufficient inventory, and could adversely affect future operations by slowing store growth, which could, in turn, reduce sales growth.
Global sourcing and foreign trade involve numerous factors and uncertainties beyond our control, including possible changes to U.S. trade policy, increased shipping costs, the timing of shipments, increased import duties, more restrictive quotas, loss of most favored nation trading status, currency exchange rates, work stoppages, transportation delays, port of entry issues, economic uncertainties such as inflation, foreign government regulations, political unrest, natural disasters, war, terrorism, trade restrictions, political instability, the financial stability of vendors, merchandise quality issues, unexpected contagion, existing viruses or illnesses, and tariffs.
Global sourcing and foreign trade involve numerous factors and uncertainties beyond our control, including possible changes to U.S. trade policy, increased shipping costs, the timing of shipments, increased import duties, more restrictive quotas, loss of most favored nation trading status, currency exchange rates, work stoppages, transportation delays, port of entry issues, economic uncertainties such as inflation, foreign government regulations, political unrest, natural disasters, war, terrorism, trade restrictions, political instability, the financial stability of vendors, merchandise quality issues, unexpected contagion, existing viruses or illnesses, and tariffs or trade sanctions, as well as international trade disputes or changes in trading relationships resulting from current and future political environments.
Natural disasters, which may include tornadoes, hurricanes, floods, and earthquakes, may impact our stores or other operations. In addition, climate change may have an impact on the frequency and/or severity of such natural disasters. We have a growing number of stores in areas that may be impacted by weather events and natural disasters such as the types listed above.
Natural disasters, which may include tornadoes, hurricanes, floods, and earthquakes, may impact our stores or other operations. The frequency and/or severity of such natural disasters may be unpredictable, and we have a growing number of stores in areas that may be impacted by weather events and natural disasters such as the types listed above.
Additional factors, such as customs or border control policies and unanticipated tariffs, such as additional or new import tariffs, may further delay or hinder transportation of merchandise or the costs to obtain them.
Additional factors, such as customs or border control policies and new or changing tariffs or trade sanctions, such as additional or new import tariffs, may further delay or hinder transportation of merchandise or the costs to obtain them.
While the authorization of the repurchase program has an expiration date, the authorizations are subject to extension or earlier termination by the Board of Directors at any time and we are not obligated to repurchase a specified number or dollar value of shares under our share repurchase program.
While the authorization of the repurchase program has an expiration date, the authorizations are subject to extension or earlier termination by the Board of Directors at any time. We are not obligated to repurchase a specified number or dollar value of shares under our share repurchase program, and all repurchase decisions are made in our sole discretion.
If we are unable to attract and retain quality associates and management personnel, fail to comply with the regulations and laws impacting personnel, or have difficulty accurately predicting employee-related costs (including healthcare costs), and establishing accurate budgetary reserves for such costs, it could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to attract and retain quality associates and management personnel, fail to comply with the regulations and laws impacting personnel, or have difficulty accurately predicting employee-related costs (including healthcare costs), and establishing accurate budgetary reserves for such costs, it could have a material adverse effect on our business, financial condition, and results of operations. 22 Index Our success depends on our marketing, advertising, and promotional efforts.
The completion date and ultimate cost of future projects, including our Princeton, IL distribution center, could differ significantly from initial expectations due to construction-related or other reasons. We cannot guarantee that any project will be completed on time or within established budgets.
The completion date and ultimate cost of future projects could differ significantly from initial expectations due to construction-related or other reasons. We cannot guarantee that any project will be completed on time or within established budgets.
Our information technology, communications systems, and electronic data may be vulnerable to damage or interruption from computer viruses, ransomware attacks, loss of data, unauthorized data breaches, usage errors by our associates or our contractors or other attempts to harm our systems, including cyber-security attacks or other breaches of cardholder data, earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer, and telecommunications failures.
Our information technology, communications systems, and electronic data may be vulnerable to damage or interruption from malicious code, phishing, smishing, artificial intelligence deepfakes, computer viruses, other malware attacks, ransomware attacks, loss of data, unauthorized data breaches, usage errors by our associates or our contractors or other attempts to harm our systems, including cyber-security attacks or other breaches of cardholder data, earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer, and telecommunications failures.
Many of the factors identified above also affect commodity rates, transportation costs, costs of labor, insurance, and healthcare, the strength of the U.S. dollar, lease costs, measures that create barriers to or increase the costs associated with international trade, changes in other laws and regulations, and other economic factors, all of which may impact our cost of merchandise sold and our selling, general, and administrative expenses, which could have a material adverse effect on our business, financial condition, and results of operations.
Many of the factors identified above also affect commodity rates, transportation costs, costs of labor, insurance, and healthcare, the strength of the U.S. dollar, lease costs, measures that create barriers to or increase the costs associated with international trade, changes in other laws and regulations, and other economic factors, all of which may impact our cost of merchandise sold and our selling, general, and administrative expenses, which could have a material adverse effect on our business, financial condition, and results of operations. 18 Index We do not compete in the growing online and omnichannel retail marketplace, which could have a material adverse effect on our business, financial condition, and results of operations.
The Company’s 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”). As of February 3, 2024, we had no outstanding borrowings on the Revolving Credit Facility, with $90.0 million of borrowing availability.
The Company’s 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”). As of February 1, 2025, we had no outstanding borrowings on the Revolving Credit Facility, with $85.8 million of borrowing availability.
Increases in transportation costs (including increases in fuel and other variable costs), supplier-side delays, reductions in the capacity of carriers, changes in shipping companies, the impact of COVID-19 or another pandemic on our workforce, labor strikes, or shortages in the transportation industry, and unexpected delivery interruptions also have the potential to derail our orderly distribution process.
Increases in transportation costs (including increases in fuel and other variable costs), supplier-side delays, reductions in the capacity of carriers, changes in shipping companies, the impact of future pandemics or health crises on our workforce, labor strikes, or shortages in the transportation industry, and unexpected delivery interruptions also have the potential to derail our orderly distribution process.
Further, investment in funds that specialize in companies that perform well in ESG assessments have gained popularity, and several major institutional investors and advisors have publicly emphasized the importance of ESG measures to their investment decisions and recommendations.
Further, investment in funds that specialize in companies that perform well in ESG assessments have both gained popularity and been subject to criticism, and several major institutional investors and advisors have publicly emphasized or disfavored the importance of ESG measures to their investment decisions and recommendations.
A number of different competitive factors outside of our control could impact our ability to compete effectively, including without limitation: • entry of new competitors in our markets; • vertical integration of competitors; • increased operational efficiencies of competitors; • online and omnichannel retail capabilities of our competitors; • competitive pricing strategies, including deep discount pricing by a broad range of retailers during periods of poor customer confidence, low discretionary income, or economic uncertainty; • continued and prolonged promotional activity by our competitors; • liquidation sales by our competitors that have filed or may file in the future for bankruptcy; • geographic expansion by competitors into markets in which we operate; and • adoption by existing competitors of innovative store formats or retail sales methods, including online and omnichannel.
A number of different competitive factors outside of our control could impact our ability to compete effectively, including without limitation: • entry of new competitors in our markets; • vertical integration of competitors; • increased operational efficiencies of competitors; • online and omnichannel retail capabilities of our competitors; • competitive pricing strategies, including deep discount pricing by a broad range of retailers during periods of poor customer confidence, low discretionary income, or economic uncertainty; • continued and prolonged promotional activity by our competitors; • liquidation sales by our competitors that have filed or may file in the future for bankruptcy; • geographic expansion by competitors into markets in which we operate; and • adoption by existing competitors of innovative store formats or retail sales methods, including online and omnichannel. 19 Index A number of our competitors also have greater financial, operational, and other resources, greater brand recognition, longer operating histories, and a broader geographic presence than us.
Epidemic or pandemic outbreaks, could impact our management and sales associates, our inventory supply, delivery schedules, our ability to keep our stores open due to mandatory governmental restrictions, or may cause our customers to avoid shopping at brick-and-mortar retailers or reduce the number of trips they will make to our stores.
Epidemic or pandemic outbreaks, terrorist attacks or disruptive political events in regions where our stores are located could impact our management and sales associates, our inventory supply, our delivery schedules, or our ability to keep our stores open due to mandatory governmental restrictions or may cause our customers to avoid shopping at brick-and-mortar retailers or reduce the number of trips they will make to our stores.
Any material interruptions or failures in our payment-related systems could have a material adverse effect on our business, financial condition, and results of operations. If our information technology systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them.
Any material interruptions or failures in our payment-related systems, including in connection with our co-branded credit card program, could have a material adverse effect on our business, financial condition, and results of operations. 28 Index If our information technology systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them.
Our success depends on our marketing, advertising, and promotional efforts. If we are unable to implement those efforts successfully, or if our competitors engage in more effective marketing, advertising, and promotional efforts than we are, it could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to implement those efforts successfully, or if our competitors engage in more effective marketing, advertising, and promotional efforts than we are, it could have a material adverse effect on our business, financial condition, and results of operations. We use marketing and promotional programs to attract customers to our stores and to encourage purchases by our customers.
As of February 3, 2024, we have an aggregate of 1,470,288 shares of common stock issuable upon exercise of outstanding options and the vesting of restricted stock units under the 2015 Equity Incentive Plan (the “2015 Plan” and together with the 2012 Equity Incentive Plan, the “Equity Plans”) (582,221 of which are fully vested).
As of February 1, 2025, we have an aggregate of 1,168,785 shares of common stock issuable upon exercise of outstanding options and the vesting of restricted stock units under the 2015 Equity Incentive Plan (the “2015 Plan” and together with the 2012 Equity Incentive Plan, the “Equity Plans”) (360,480 of which are fully vested).
We may not anticipate all of the challenges imposed by the expansion of our business operations into new geographic markets. Some new stores may be located in areas with different competitive and market conditions, customer tastes, and discretionary spending patterns than our existing markets.
See “Item 1. Business (Growth Strategy)” and “Item 7. MD&A” for more information. We may not anticipate all of the challenges imposed by the expansion of our business operations into new geographic markets. Some new stores may be located in areas with different competitive and market conditions, customer tastes, and discretionary spending patterns than our existing markets.
We have no direct operations and no significant assets other than ownership of 100% of the capital stock of our subsidiaries. Because we conduct operations through our subsidiaries, we depend on those entities for dividends and other payments to generate the funds necessary to meet our financial obligations and to pay any dividends with respect to our common stock.
Because we conduct operations through our subsidiaries, we depend on those entities for dividends and other payments to generate the funds necessary to meet our financial obligations and to pay any dividends with respect to our common stock.
Any errors or vulnerabilities in our systems, or damage to or failure of our systems, could result in interruptions in our services, non-compliance with certain regulations, substantial remediation costs, and liability for lost or stolen information, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Any errors or vulnerabilities in our systems, or damage to or failure of our systems, could result in interruptions in our services, non-compliance with certain regulations, substantial remediation costs, and liability for lost or stolen information, any of which could have a material adverse effect on our business, financial condition, and results of operations. 27 Index Data protection requirements increase our operating costs, and a breach of information privacy or other related risks could negatively impact our operations.
Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The occurrence of intentional sabotage, unauthorized access, natural disaster, or other unanticipated problems could result in lengthy interruptions in our service.
Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The nature and scope of threats from artificial intelligence in particular represents a new, unpredictable frontier. The occurrence of intentional sabotage, unauthorized access, natural disaster, or other unanticipated problems could result in lengthy interruptions in our service.
LEGAL AND REGULATORY We are subject to governmental regulations, requirements, and procedures. A significant change in, or noncompliance with, these regulations, requirements, and procedures could have a material adverse effect on our business, financial condition, and results of operations. We routinely incur significant costs in complying with federal, state, and local laws and regulations.
These conditions could have a sustained material adverse effect on our business, financial condition, and results of operations. 24 Index LEGAL AND REGULATORY We are subject to governmental regulations, requirements, and procedures. A significant change in, or noncompliance with, these regulations, requirements, and procedures could have a material adverse effect on our business, financial condition, and results of operations.
If no or few analysts commence coverage of us, the trading price of our stock could decrease. Even if we do obtain analyst coverage, if one or more analysts adversely change their recommendation regarding our shares or our competitors’ stock, our share price might decline.
Even if we do obtain analyst coverage, if one or more analysts adversely change their recommendation regarding our shares or our competitors’ stock, our share price might decline.
Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation with governments, customers, employees, other third parties and the communities and industries in which we operate, as well as on our business, share price, financial condition, access to capital, or results of operations. 30 Index INDEBTEDNESS AND CAPITALIZATION Indebtedness may limit our ability to invest in the ongoing needs of our business, and if we are unable to comply with our financial covenants, it could have a material adverse effect on our liquidity and our business, financial condition, and results of operations.
Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation with governments, customers, employees, other third parties and the communities and industries in which we operate, as well as on our business, share price, financial condition, access to capital, or results of operations.
The market price of our common stock has fluctuated substantially in the past and may continue to fluctuate significantly. For example, during the fiscal year ended February 3, 2024, our stock price fluctuated from a high of $83.19 to a low of $50.95.
The market price of our common stock has fluctuated substantially in the past and may continue to fluctuate significantly. For example, during the fiscal year ended February 1, 2025, our stock price fluctuated from a high of $120.03 to a low of $68.05.
To the extent that such weather events or natural disasters may damage our stores or other operations, we may be unable to operate stores or other facilitates and our consolidated financial results may be materially adversely affected. This could have a sustained material adverse effect on our business, financial condition, and results of operations.
To the extent that such weather events or natural disasters may damage our stores or other operations, we may be unable to operate stores or other facilitates and our consolidated financial results may be materially adversely affected.
Future changes in product safety laws or regulations may lead to product recalls and the disposal or write-off of merchandise.
Federal and state legislation, including new product safety laws and regulations, may negatively impact our operations. Future changes in product safety laws or regulations may lead to product recalls and the disposal or write-off of merchandise.
The earnings from, or other available assets of, our subsidiaries might not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or other obligations. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, and cash flows.
The earnings from, or other available assets of, our subsidiaries might not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or other obligations.
As a consequence, our results of operations and financial results may suffer; and 13 Index Risks Related to Legal and Regulatory Issues • We are subject to governmental laws, regulations, procedures, and requirements that can lead to substantial penalties if we fail to achieve and/or maintain compliance; • We are subject to risks associated with laws and regulations generally applicable to retailers and the risks associated with failing to comply with these laws and regulations; • From time to time, we are involved in legal proceedings from customers, suppliers, other vendors, employees, governments and governmental agencies, or competitors; • From time to time, we are involved in legal proceedings from stockholders; and • Legislative, regulatory and other actions resulting from the November 2024 elections for the U.S.
As a consequence, our results of operations and financial results may suffer. 14 Index Risks Related to Legal and Regulatory Issues • We are subject to governmental laws, regulations, procedures, and requirements that can lead to substantial penalties if we fail to achieve and/or maintain compliance; • We are subject to risks associated with laws and regulations generally applicable to retailers and the risks associated with failing to comply with these laws and regulations; • From time to time, we are involved in legal proceedings from customers, suppliers, other vendors, employees, governments and governmental agencies, or competitors; • From time to time, we are involved in legal proceedings from stockholders; and • Legislative, regulatory, and other actions, as well as executive orders and other policies promulgated by the current administration, could be unpredictable and could have unforeseen consequences that could materially, adversely affect our business, financial position, results of operations, and cash flows.
Changes in market dynamics, shareholder expectations, local, national and international climate change policies, and the frequency and intensity of extreme weather events on critical infrastructure in the United States and abroad, all have the potential to disrupt our business and operations.
Changes in market dynamics, shareholder expectations, local, national, and international climate change policies, and the frequency and intensity of extreme weather events on critical infrastructure in the United States and abroad, all have the potential to disrupt our business and operations. Climate conditions such as drought, wildfires, storms, sea-level rise, and flooding, may occur more frequently or with greater intensity.
The complexity of the regulatory environment in which we operate, and the related costs of compliance, are increasing due to expanding and additional legal and regulatory requirements and increased enforcement efforts.
We routinely incur significant costs in complying with federal, state, and local laws and regulations. The complexity of the regulatory environment in which we operate, and the related costs of compliance, are increasing due to expanding and additional legal and regulatory requirements and increased or uncertain enforcement efforts.
Our insurance coverage reflects deductibles, self-insured retentions, limits of liability, and similar provisions that we believe are prudent based on the nature of our operations.
Our current insurance program may expose us to unexpected costs and negatively affect our financial performance. Our insurance coverage reflects deductibles, self-insured retentions, limits of liability, and similar provisions that we believe are prudent based on the nature of our operations.
Data protection requirements increase our operating costs, and a breach in information privacy or other related risks could negatively impact our operations. We have access to, collect, or maintain private or confidential information regarding our customers, associates, and suppliers, as well as our business. The protection of our customer, associate, supplier, and company data is critical to us.
We have access to, collect, or maintain private or confidential information regarding our customers, associates, and suppliers, as well as our business. The protection of our customer, associate, supplier, and company data is critical to us.
If securities analysts or industry analysts downgrade our shares, publish negative research or reports, or do not publish reports about our business, our share price and trading volume could decline. The trading market for our common stock is to some extent influenced by the research and reports that industry or securities analysts publish about us, our business, and our industry.
The trading market for our common stock is to some extent influenced by the research and reports that industry or securities analysts publish about us, our business, and our industry. If no or few analysts commence coverage of us, the trading price of our stock could decrease.
If we are unable to retain the loyalty of our customers, our net sales could decrease, and we may not be able to grow our store base as planned, which could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to retain the loyalty of our customers, our net sales could decrease, and we may not be able to grow our store base as planned, which could have a material adverse effect on our business, financial condition, and results of operations. 20 Index The failure to timely acquire, develop, open, and operate, or the loss of, disruption to, or interruption in the operations of, our centralized distribution centers could materially adversely affect our business and operations.
The cost of compliance with product safety regulations and risks related to product liability claims, lawsuits, and product recalls could damage our reputation, increase our cost of doing business, and have a material adverse effect on our business, financial condition, and results of operations. Federal and state legislation, including new product safety laws and regulations, may negatively impact our operations.
These and other issues affecting our international vendors could have a material adverse effect on our business, financial condition, and results of operations. 25 Index The cost of compliance with product safety regulations and risks related to product liability claims, lawsuits, and product recalls could damage our reputation, increase our cost of doing business, and have a material adverse effect on our business, financial condition, and results of operations.
It is also possible that, notwithstanding the forum selection clause, a court could rule that such a provision is inapplicable or unenforceable, which could have a material adverse effect on our business, financial condition, and adversely impact our results of operations, financial position, and cash flows.
It is also possible that, notwithstanding the forum selection clause, a court could rule that such a provision is inapplicable or unenforceable, which could have a material adverse effect on our business, financial condition, and adversely impact our results of operations, financial position, and cash flows. 30 Index If securities analysts or industry analysts downgrade our shares, publish negative research or reports, or do not publish reports about our business, our share price and trading volume could decline.
A breach of customer, employee, supplier, or company data could attract a substantial amount of negative media attention, damage our customer and supplier relationships and our reputation, and result in lost sales, costly fines, other expenses, and/or lawsuits, any of which could have a material adverse effect on our business, financial condition, and results of operations. 26 Index If we are unable to maintain or upgrade our information technology systems or if we are unable to convert to alternate systems in an efficient and timely manner, our operations may be disrupted or become less efficient.
A breach of customer, employee, supplier, or company data could attract a substantial amount of negative media attention, damage our customer and supplier relationships and our reputation, and result in lost sales, costly fines, other expenses, and/or lawsuits, any of which could have a material adverse effect on our business, financial condition, and results of operations.
The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, floods, and earthquakes, epidemic outbreaks, unusual weather conditions, terrorist attacks or disruptive political events in regions where our stores are located could adversely affect our business and result in lower sales.
The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, floods, and earthquakes, epidemic outbreaks, unusual weather conditions in regions where our stores are located could adversely affect our business and result in lower sales. Additionally, climate-related events and circumstances have resulted, and likely will continue to result, in increased costs for property insurance policies.
Any repeated, intermittent, or long-term disruption in the operations of our distribution centers would hinder our ability to provide merchandise to our stores and could have a material adverse effect on our business, financial condition, and results of operations. 19 Index Our new store growth is dependent on our ability to successfully expand our distribution network capacity, and failure to achieve or sustain these plans could adversely affect our performance.
Any repeated, intermittent, or long-term disruption in the operations of our distribution centers would hinder our ability to provide merchandise to our stores and could have a material adverse effect on our business, financial condition, and results of operations.
We rely on the integrity, security, and successful functioning of our information technology systems and network infrastructure across our operations, including point-of-sale processing at our stores.
We rely on the integrity, security, and successful functioning of our information technology systems and network infrastructure across our operations, including point-of-sale processing at our stores. In connection with sales, we make every effort not to transmit confidential credit and debit card information.
Investors who are focused on ESG matters may seek enhanced disclosures or require implementation of policies and procedures that may be adverse to our business, and there can be no assurances that shareholders will not advocate, via proxy contests, media campaigns, or by other public or private means, for us to take more ESG focused actions on an accelerated timeline.
There can be no assurances that shareholders will not advocate, via proxy contests, media campaigns, or by other public or private means, for us to either take more ESG focused actions on an accelerated timeline or not to do so.
Additionally, changes in tax laws, the interpretation of existing laws, or our failure to sustain our reporting positions on examination could materially adversely affect our effective tax rate and could have a material adverse effect on our business, financial condition, and results of operations. 23 Index If we fail to protect our intellectual property portfolio, including without limitation brand names and other trademarks, the value of these assets may be diluted.
Additionally, changes in tax laws, the interpretation of existing laws, or our failure to sustain our reporting positions on examination could materially adversely affect our effective tax rate and could have a material adverse effect on our business, financial condition, and results of operations.
We are in compliance with PCI, and compliance with PCI and implementing related procedures, technology and information security measures requires significant resources and ongoing attention.
We rely extensively on our information technology systems to process transactions, summarize results, and manage our business. We are in compliance with PCI, and compliance with PCI and implementing related procedures, technology and information security measures requires significant resources and ongoing attention.
We use marketing and promotional programs to attract customers to our stores and to encourage purchases by our customers. Although we use various media for our promotional efforts, including regular and Ollie’s Army mailers, email campaigns, radio and television advertisements, and sports marketing, we primarily advertise our in-store offerings through printed flyers.
Although we use various media for our promotional efforts, including regular and Ollie’s Army mailers, email campaigns, radio and television advertisements, and sports marketing, we primarily advertise our in-store offerings through printed flyers. In fiscal 2024, over 50% of our advertising spend was for the printing and distribution of flyers.
Even though we are compliant with such standards, we still may not be able to prevent or timely detect security breaches. An increasingly significant portion of our sales depends on the continuing operation of our information technology and communications systems, including, but not limited to, our point-of-sale system and our credit card processing systems.
An increasingly significant portion of our sales depends on the continuing operation of our information technology and communications systems, including, but not limited to, our point-of-sale system and our credit card processing systems.
Changes in the amount and degree of promotional intensity or merchandising strategy by our competitors could cause us to have difficulties in retaining existing customers and attracting new customers.
Changes in the amount and degree of promotional intensity or merchandising strategy by our competitors could cause us to have difficulties in retaining existing customers and attracting new customers. Further, social media allows for an increased speed at which publicity, both positive and negative, can be transmitted.
We depend on a variety of information technology systems for the efficient functioning of our business. We rely on certain hardware, telecommunications, and software vendors to maintain and periodically upgrade many of these systems so that we can continue to support our business.
We rely on certain hardware, telecommunications, and software vendors to maintain and periodically upgrade many of these systems so that we can continue to support our business. Various components of our information technology systems, including hardware, networks, and software, are licensed to us by third-party vendors.
Risks associated with heightened geopolitical instability include, among others, reductions in consumer confidence, heightened inflation, production disruptions, cyber disruptions or attacks, higher natural gas costs, higher manufacturing costs, and higher supply chain costs. Climate change may have a long-term impact on our business. There are inherent climate-related risks wherever our business is conducted.
Risks associated with heightened geopolitical instability include, among others, reductions in consumer confidence, heightened inflation, production disruptions, cyber disruptions or attacks, higher natural gas costs, higher manufacturing costs, and higher supply chain costs.
Anti-takeover provisions in our third amended and restated certificate of incorporation and fourth amended and restated bylaws and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
If we are unable to satisfy our obligations as a public company, we could be subject to, among other items, the delisting of our common stock, fines, sanctions, and other regulatory actions, as well as potential civil litigation. 29 Index Anti-takeover provisions in our third amended and restated certificate of incorporation and fourth amended and restated bylaws, and under Delaware law, could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.
Section 27 of the Securities Exchange Act of 1934 (“Exchange Act”) provides for exclusive federal court jurisdiction over Exchange Act claims.
Application of the choice of forum provision may be limited in some instances by law. Section 27 of the Securities Exchange Act of 1934 (“Exchange Act”) provides for exclusive federal court jurisdiction over Exchange Act claims.
Any payment of cash dividends will be at the discretion of our Board and will depend on our financial condition, capital requirements, legal requirements, earnings, and other factors. Our ability to pay dividends is restricted by the terms of our Credit Facility and might be restricted by the terms of any indebtedness that we incur in the future.
We do not anticipate that we will pay any dividends to holders of our common stock for the foreseeable future. Any payment of cash dividends will be at the discretion of our Board and will depend on our financial condition, capital requirements, legal requirements, earnings, and other factors.
We do not expect to pay any cash dividends for the foreseeable future. The continued operation and expansion of our business will require substantial funding. We do not anticipate that we will pay any dividends to holders of our common stock for the foreseeable future.
Any of the foregoing could materially and adversely affect our business, financial condition, results of operations, and cash flows. 31 Index We do not expect to pay any cash dividends for the foreseeable future. The continued operation and expansion of our business will require substantial funding.
We also rely on associates in our distribution centers to ensure the efficient processing and delivery of merchandise from our suppliers to our stores.
Further, anticipated changes in immigration laws and regulations could adversely affect the pool of candidates legally available to fill positions. We also rely on associates in our distribution centers to ensure the efficient processing and delivery of merchandise from our suppliers to our stores.
In addition, the stock market has experienced price and volume fluctuations that have affected the market price of many retail and other stocks that have often been unrelated or disproportionate to the operating performance of these companies. 29 Index We are a holding company and rely on dividends and other payments, advances, and transfers of funds from our subsidiaries to meet our obligations and pay any dividends.
In addition, the stock market has experienced price and volume fluctuations that have affected the market price of many retail and other stocks that have often been unrelated or disproportionate to the operating performance of these companies.
Accordingly, realization of any gain on our common stock will depend on the appreciation of the price of the shares of our common stock, which may never occur. Our business and reputation may be adversely affected by environmental, social and governance matters. Investor and regulatory focus has intensified with respect to certain environmental, social, and governance (“ESG”) matters.
Our business and reputation may be adversely affected by environmental, social, and governance matters. Investor and regulatory focus has intensified with respect to certain environmental, social, and governance (“ESG”) matters.
However, there can be no assurance that in the future we will be able to operate our facilities and our customer service and sales operations in accordance with PCI or other industry recommended or contractually required practices. We expect to incur additional expenses, and the time and effort of our information technology staff, to maintain PCI compliance.
We are compliant with the Payment Card Industry Data Security Standard (“PCI”) issued by the Payment Card Industry Security Standards Council. However, there can be no assurance that in the future we will be able to operate our facilities and our customer service and sales operations in accordance with PCI or other industry recommended or contractually required practices.
Other new accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future.
Other new accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future. Future changes to accounting rules or regulations could have a material adverse effect on our business, financial condition, and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Risk Committee reports quarterly to the Board’s Audit Committee, responding to the comments, questions, directives, and input from the members thereof, and engaging in a fulsome discussion of the Company’s approach to, among other things, cybersecurity risk management. 33 Index Company Management The CIO, in coordination with the Company’s IT Security and Compliance (“ITSEC”) team works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
Biggest changeCompany Management The CIO, in coordination with the Company’s IT Security and Compliance (“ITSEC”) team works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
Although we maintain cybersecurity insurance, there can be no guarantee that our insurer(s) will cover specific claims, pay the full costs of an incident, or provide payment in a timely manner. For more information, please see “Item 1A – Risk Factors – Technology and Cybersecurity.” 34 Index
Although we maintain cybersecurity insurance, there can be no guarantee that our insurer(s) will cover specific claims, pay the full costs of an incident, or provide payment in a timely manner. For more information, please see “Item 1A – Risk Factors – Technology and Cybersecurity.”
During the fiscal year ended February 3, 2024, we did not experience any material impact to our business, financial position, or operations resulting from previously identified cyberattacks or other information security incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material breaches.
During the fiscal year ended February 1, 2025, we did not experience any material impact to our business, financial position, or operations resulting from previously identified cyberattacks or other information security incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material breaches.
The CIO has served various roles in information technology for over 32 years, including 16 years with responsibility in overseeing cybersecurity efforts in large publicly traded companies. The ITSEC team includes a dedicated manager and security analysts.
The CIO has served various roles in information technology for over 33 years, including 17 years with responsibility in overseeing cybersecurity efforts in large publicly traded companies. The ITSEC team includes a dedicated manager and security analysts.
The CIO’s team reports the results of such assessments, audits, and reviews to the Risk Committee and the Audit Committee on a quarterly basis, and the Company adjusts its cybersecurity policies, standards, processes, and practices as necessary based on the valuable information gleaned during these assessments, audits, and reviews.
The CIO’s team reports the results of such assessments, audits, and reviews to the Risk Committee and the Audit Committee on a quarterly basis, and the Company adjusts its cybersecurity policies, standards, processes, and practices as necessary based on the valuable information gleaned during these assessments, audits, and reviews. 35 Index Governance and Board Oversight The Board, through its Audit Committee, pursuant to the Audit Committee’s charter, and in coordination with the Company’s Risk Committee, oversees the Company’s ERM process, including the management of risks arising from cybersecurity threats.
We continuously seek to maintain a robust program of information security and controls, but the impact of a material cybersecurity incident could have an adverse effect on our competitive position, reputation, results of operations, financial condition, and cash flows.
While our lack of an online shopping option or an omnichannel customer experience may pose risks to our business, the same aspect of our operations insulates us from the same level of cybersecurity risks relative to those peers. 36 Index We continuously seek to maintain a robust program of information security and controls, but the impact of a material cybersecurity incident could have an adverse effect on our competitive position, reputation, results of operations, financial condition, and cash flows.
In general, the Company addresses cybersecurity risks through a comprehensive, cross-functional approach focused on preserving the confidentiality, security, and availability of the information that the Company collects and stores by, first, identifying, preventing, and mitigating cybersecurity threats and, when needed, effectively responding to cybersecurity incidents. 32 Index Risk Management and Strategy The Company’s cybersecurity program focuses on the following key areas: • As discussed in more detail under the heading “Governance,” the Board oversees the Company’s ERM functions through its Audit Committee (the “Audit Committee”).
In general, the Company addresses cybersecurity risks through a comprehensive, cross-functional approach focused on preserving the confidentiality, security, and availability of the information that the Company collects and stores by, first, identifying, preventing, and mitigating cybersecurity threats and, when needed, effectively responding to cybersecurity incidents.
Removed
Governance and Board Oversight The Board, through its Audit Committee, pursuant to the Audit Committee’s charter, and in coordination with the Company’s Risk Committee, oversees the Company’s ERM process, including the management of risks arising from cybersecurity threats.
Added
Risk Management and Strategy The Company’s cybersecurity program focuses on the following key areas: • As discussed in more detail under the heading “Governance,” the Board oversees the Company’s ERM functions through its Audit Committee (the “Audit Committee”).
Removed
While our lack of an online shopping option or an omnichannel customer experience may pose risks to our business, the same aspect of our operations insulates us from the same level of cybersecurity risks relative to those peers.
Added
The Risk Committee reports quarterly to the Board’s Audit Committee, responding to the comments, questions, directives, and input from the members thereof, and engaging in a fulsome discussion of the Company’s approach to, among other things, cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we are constructing our fourth distribution center in Princeton, IL, which we anticipate to be operational in the second half of fiscal 2024. As of February 3, 2024, there were 512 Ollie’s Bargain Outlet locations across 30 contiguous states in the eastern half of the United States.
Biggest changeThe Princeton, IL facility is 615,000 square feet and began shipping product in July 2024. As of February 1, 2025, there were 559 Ollie’s Bargain Outlet locations across 31 contiguous states in the eastern half of the United States. We maintain a focused and disciplined approach to entering into lease arrangements.
Item 2. Properties We lease the majority of our retail stores, often in second generation sites ranging in size from 20,000 to 50,000 square feet. Our corporate headquarters, located in Harrisburg, PA, is 58,200 square feet and is leased under an agreement that expires in February 2033, with options to renew for three successive five-year periods.
Item 2. Properties We lease the majority of our retail stores, often in second generation sites ranging in size from 18,000 to 50,000 square feet. Our corporate headquarters, located in Harrisburg, PA, is 58,200 square feet and is leased under an agreement that expires in February 2033, with options to renew for three successive five-year periods.
Our corporate data center and additional office space is 19,800 square feet. Our recently expanded 804,000 square foot distribution center located in York, PA is leased under an agreement that expires in March 2033 with an option to renew for one five-year period, we completed the expansion in fiscal 2023 providing an additional 201,000 square feet of distribution capacity.
Our corporate data center and additional office space is 19,800 square feet. Our 804,000 square foot distribution center located in York, PA is leased under an agreement that expires in March 2033 with an option to renew for one five-year period.
Our leases generally have an initial term of approximately seven years with options to renew for three to five successive five-year periods and generally require us to pay a proportionate share of real estate taxes, insurance, and common area or other charges.
All leases are approved by our real estate committee, which is comprised of senior management and executive officers. Our leases generally have an initial term of approximately seven years with options to renew for three to five successive five-year periods and generally require us to pay a proportionate share of real estate taxes, insurance, and common area or other charges.
Our 962,000 square foot distribution center in Commerce, GA is leased under an agreement that expires in April 2024 with options to renew for three successive five-year periods. In 2019, we constructed our 615,000 square foot distribution center in Lancaster, TX. The Lancaster, TX distribution center became fully operational during the first quarter of 2020.
Our 962,000 square foot distribution center in Commerce, GA is leased under an agreement that expires in April 2029 with options to renew for two successive five-year periods. We also own and operate a 615,000 square foot distribution center in Lancaster, TX. In fiscal 2024, we completed construction of our fourth distribution center in Princeton, IL.
Removed
We maintain a focused and disciplined approach to entering into lease arrangements. All leases are approved by our real estate committee, which is comprised of senior management and executive officers.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeInformation on Share Repurchases Information regarding shares of common stock the Company repurchased during the fourteen weeks ended February 3, 2024 is as follows: Period Total number of shares repurchased (1) Average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (3) Approximate dollar value of shares that may yet be purchased under the plans or programs (3) October 29, 2023 through November 25, 2023 — — — $ 98,389,572 November 26, 2023 through December 30, 2023 68,299 $ 72.71 68,299 $ 93,387,292 December 31, 2023 through February 3, 2024 105,637 $ 72.60 105,637 $ 85,655,549 Total 173,936 173,936 (1) Consists of shares repurchased under the publicly announced share repurchase program.
Biggest changeInformation on Share Repurchases Information regarding shares of common stock the Company repurchased during the thirteen weeks ended February 1, 2025 is as follows: Period Total number of shares repurchased (1) Average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (3) Approximate dollar value of shares that may yet be purchased under the plans or programs (3) November 3, 2024 through November 30, 2024 — — — $ 38,395,894 December 1, 2024 through January 4, 2025 16,614 $ 114.78 16,614 $ 36,490,497 January 5, 2025 through February 1, 2025 35,541 $ 108.06 35,541 $ 32,646,530 Total 52,155 52,155 (1) Consists of shares repurchased under the publicly announced share repurchase program.
This graph assumes an initial investment of $100 on February 2, 2019 in our common stock, the NASDAQ Composite Total Return index and the NASDAQ US Benchmark Retail Index and assumes the reinvestment of dividends, if any.
This graph assumes an initial investment of $100 on February 1, 2020 in our common stock, the NASDAQ Composite Total Return index and the NASDAQ US Benchmark Retail Index and assumes the reinvestment of dividends, if any.
Stock Performance Graph The graph set forth below compares the cumulative stockholder return on our common stock between February 2, 2019 and February 3, 2024 to the cumulative return of (i) the NASDAQ Composite Total Return index and (ii) the NASDAQ US Benchmark Retail Index over the same period.
Stock Performance Graph The graph set forth below compares the cumulative stockholder return on our common stock between February 1, 2020 and February 1, 2025 to the cumulative return of (i) the NASDAQ Composite Total Return index and (ii) the NASDAQ US Benchmark Retail Index over the same period.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on NASDAQ under the symbol “OLLI.” The following tables set forth for the periods indicated the high and low sales prices of our common stock on NASDAQ. 2023 High Low First Quarter $ 65.97 $ 50.95 Second Quarter $ 73.71 $ 52.93 Third Quarter $ 80.94 $ 70.17 Fourth Quarter $ 83.19 $ 68.57 2022 High Low First Quarter $ 55.22 $ 37.67 Second Quarter $ 72.27 $ 40.40 Third Quarter $ 67.99 $ 48.95 Fourth Quarter $ 62.82 $ 44.72 As of February 3, 2024, we had approximately 460 stockholders of record.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on NASDAQ under the symbol “OLLI.” The following tables set forth for the periods indicated the high and low sales prices of our common stock on NASDAQ. 2024 High Low First Quarter $ 84.38 $ 68.05 Second Quarter $ 104.98 $ 72.19 Third Quarter $ 102.38 $ 86.05 Fourth Quarter $ 120.03 $ 86.88 2023 High Low First Quarter $ 65.97 $ 50.95 Second Quarter $ 73.71 $ 52.93 Third Quarter $ 80.94 $ 70.17 Fourth Quarter $ 83.19 $ 68.57 As of February 1, 2025, we had approximately 177,325 stockholders of record.
Shares to be repurchased are subject to the same considerations regarding timing and amount of repurchases as the initial authorization. As of February 3, 2024, the Company had approximately $85.7 million remaining under its share repurchase program. For further discussion on the share repurchase program, see “Part II, Item 7.
Shares to be repurchased are subject to the same considerations regarding timing and amount of repurchases as the initial authorization. As of February 1, 2025, the Company had approximately $32.7 million remaining under its share repurchase program.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources, Share Repurchase Program.” 37 Index Item 6. [Reserved]
For further discussion on the share repurchase program, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources, Share Repurchase Program.” 39 Index Item 6. [Reserved]
Such returns are based on historical results and are not intended to suggest future performance. 2/2/19 2/1/20 1/30/21 1/29/22 1/28/23 2/3/24 Ollie’s Bargain Outlet Holdings, Inc. 100.00 66.84 119.38 56.62 68.02 94.61 NASDAQ Composite Total Return Index 100.00 119.53 209.88 127.05 99.06 96.14 NASDAQ US Benchmark Retail Index 100.00 117.55 161.35 167.70 141.71 190.18 36 Index Dividends Our common stock began trading on July 16, 2015.
Such returns are based on historical results and are not intended to suggest future performance. 2/1/20 1/30/21 1/29/22 1/28/23 2/3/24 2/1/25 Ollie’s Bargain Outlet Holdings, Inc. 100.00 178.60 84.71 101.75 141.53 210.24 NASDAQ Composite Total Return Index 100.00 175.59 106.29 82.88 80.43 88.30 NASDAQ US Benchmark Retail Index 100.00 137.26 142.67 120.56 161.79 215.52 38 Index Dividends Our common stock began trading on July 16, 2015.
Added
On March 19, 2025, the Company announced the Board of Directors approved a new share repurchase authorization of an additional $300.0 million of the Company’s outstanding common stock; see further discussion in Note 14 “Subsequent Event” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur historical results are not necessarily indicative of the results that may be expected in the future. 2023 2022 (dollars in thousands) Net sales $ 2,102,662 $ 1,827,009 Cost of sales 1,270,297 1,170,915 Gross profit 832,365 656,094 Selling, general and administrative expenses 562,672 490,569 Depreciation and amortization expenses 27,819 22,907 Pre-opening expenses 14,075 11,700 Operating income 227,799 130,918 Interest expense (income), net (14,686 ) (2,965 ) Income before income taxes 242,485 133,883 Income tax expense 61,046 31,093 Net income $ 181,439 $ 102,790 Percentage of net sales (1) : Net sales 100.0 % 100.0 % Cost of sales 60.4 64.1 Gross profit 39.6 35.9 Selling, general and administrative expenses 26.8 26.9 Depreciation and amortization expenses 1.3 1.3 Pre-opening expenses 0.7 0.6 Operating income 10.8 7.2 Interest expense (income), net (0.7 ) (0.2 ) Income before income taxes 11.5 7.3 Income tax expense 2.9 1.7 Net income 8.6 % 5.6 % Select operating data: Number of new stores 45 40 Number of store closings (1 ) (3 ) Number of stores open at end of period 512 468 Average net sales per store (2) $ 4,286 $ 4,043 Comparable stores sales change 5.7 % (3.0 )% (1) Components may not add to totals due to rounding.
Biggest changeOur historical results are not necessarily indicative of the results that may be expected in the future. 2024 2023 (dollars in thousands) Net sales $ 2,271,705 $ 2,102,662 Cost of sales 1,357,253 1,270,297 Gross profit 914,452 832,365 Selling, general, and administrative expenses 612,406 562,672 Depreciation and amortization expenses 33,224 27,819 Pre-opening expenses 19,319 14,075 Operating income 249,503 227,799 Interest income, net (16,311 ) (14,686 ) Income before income taxes 265,814 242,485 Income tax expense 66,052 61,046 Net income $ 199,762 $ 181,439 Percentage of net sales (1) : Net sales 100.0 % 100.0 % Cost of sales 59.7 60.4 Gross profit 40.3 39.6 Selling, general, and administrative expenses 27.0 26.8 Depreciation and amortization expenses 1.5 1.3 Pre-opening expenses 0.9 0.7 Operating income 11.0 10.8 Interest income, net (0.7 ) (0.7 ) Income before income taxes 11.7 11.5 Income tax expense 2.9 2.9 Net income 8.8 % 8.6 % Select operating data: Number of new stores 50 45 Number of store closings (3 ) (1 ) Number of stores open at end of period 559 512 Average net sales per store (2) $ 4,271 $ 4,286 Comparable stores sales change 2.8 % 5.7 % (1) Components may not add to totals due to rounding.
Because we offer a broad selection of merchandise at extreme values, we believe we are generally 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. Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP.
Because we offer a broad selection of merchandise at extreme values, we believe we are generally 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. 50 Index Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP.
Depreciation and amortization are computed on the straight-line method for financial reporting purposes. Depreciation and amortization as it relates to our distribution centers is included within cost of sales on the 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 store closing costs.
Depreciation and amortization are computed on the straight-line method for financial reporting purposes. Depreciation and amortization as it relates to our distribution centers is included within cost of sales on the consolidated statements of income. 43 Index 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.
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.
We have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects. 47 Index 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.
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. We were in compliance with all terms of the Credit Facility during 2023.
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. We were in compliance with all terms of the Credit Facility during 2024.
The following tables summarize key components of our results of operations for 2023 and 2022, both in dollars and as a percentage of our net sales. We derived the consolidated statements of income for 2023 and 2022 from our consolidated financial statements and related notes.
The following tables summarize key components of our results of operations for 2024 and 2023, both in dollars and as a percentage of our net sales. We derived the consolidated statements of income for 2024 and 2023 from our consolidated financial statements and related notes.
If actual results prove inconsistent with our assumptions and judgments, we could be exposed to an impairment charge. For 2023 and 2022, we completed an impairment test of our goodwill and determined that no impairment of goodwill existed.
If actual results prove inconsistent with our assumptions and judgments, we could be exposed to an impairment charge. For 2024 and 2023, we completed an impairment test of our goodwill and determined that no impairment of goodwill existed.
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 our consolidated balance sheet as of February 3, 2024, 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.
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 our consolidated balance sheet as of February 1, 2025, 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.
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. We expect that our SG&A will continue to increase in future periods with future growth.
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. We expect that our SG&A will continue to increase in future periods with future growth.
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.” 42 Index Results of Operations This section includes comparisons of certain 2023 financial information to the same information for 2022.
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.” 44 Index Results of Operations This section includes comparisons of certain 2024 financial information to the same information for 2023.
Year-to-year comparisons of the 2022 financial information to the same information for fiscal 2021, the 52-week period ended January 28, 2022 (“2021”), are contained in Item 7 of our Form 10-K for 2022 filed with the SEC on March 24, 2023 and available through the SEC’s website at https://www.sec.gov/edgar/searchedgar/companysearch.html.
Year-to-year comparisons of the 2023 financial information to the same information for fiscal 2022, the 52-week period ended January 28, 2023 (“2022”), are contained in Item 7 of our Form 10-K for 2023 filed with the SEC on March 27, 2024 and available through the SEC’s website at https://www.sec.gov/edgar/searchedgar/companysearch.html.
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 the expansion of our store base in existing and new markets.
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 the expansion of our store base in existing and new markets.
References to “2023” refer to the 53 week fiscal year ended February 3, 2024 and references to “2022” refer to the 52 week fiscal year ended January 28, 2023. References to “2024” refer to the 52-week fiscal year ending February 1, 2025. Overview Ollie’s is America’s largest retailer of closeout merchandise and excess inventory.
References to “2024” refer to the 52-week fiscal year ended February 1, 2025 and references to “2023” refer to the 53-week fiscal year ended February 3, 2024. References to “2025” refer to the 52-week fiscal year ending January 31, 2026. Overview Ollie’s is America’s largest retailer of closeout merchandise and excess inventory.
Loans under the Revolving Credit Facility mature on January 9, 2029. 47 Index 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 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.
Similarly, for 2023 and 2022, we completed an impairment test of our tradename and determined that no impairment of the asset existed. 50 Index
Similarly, for 2024 and 2023, we completed an impairment test of our tradename and determined that no impairment of the asset existed. 52 Index
As a result, our SG&A may not be comparable to similar data made available by our competitors and other retailers. 41 Index Depreciation and Amortization Expenses Property and equipment are stated at original cost less accumulated depreciation and amortization.
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.
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. Although the Company maintains balances which exceed the FDIC insured limit, it has not experienced any losses related to these balances.
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.
In addition, our new stores generally open strong, contributing to the growth in net sales and profitability of our business. From 2019 to 2023, net sales grew at a CAGR of 10.5%.
In addition, our new stores generally open strong, contributing to the growth in net sales and profitability of our business. From 2020 to 2024, net sales grew at a CAGR of 5.9%.
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 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.
Interest (Income) Expense, Net Interest income, net was $14.7 million in 2023 compared with $3.0 million in 2022. The increase in interest income, net in 2023 is primarily due to favorable interest rates and higher average cash and cash equivalent and short-term investments balances compared to 2022.
Interest Income, Net Interest income, net was $16.3 million in 2024 compared with $14.7 million in 2023. The increase in interest income, net in 2024 is primarily due to higher average cash and cash equivalent and short-term investments balances compared to 2023.
As of February 3, 2024, we had $353.2 million of cash and cash equivalents and short-term investments on hand and $90.0 million available to borrow under our Revolving Credit Facility. For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to the Consolidated Financial Statements.” Our primary cash needs are for capital expenditures and working capital.
As of February 1, 2025, we had $428.7 million of cash and cash equivalents and short-term investments on hand and $85.8 million available to borrow under our Revolving Credit Facility. For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to the Consolidated Financial Statements.” Our primary cash needs are for capital expenditures and working capital.
Comparable store sales are impacted by the same factors that impact net sales. 40 Index We define comparable stores to be stores that: • have been remodeled while remaining open; • are closed for five or fewer days in any fiscal month; • are closed temporarily and relocated within their respective trade areas; and • have expanded, but are not significantly different in size, within their current locations.
We define comparable stores to be stores that: • have been remodeled while remaining open; • are closed for five or fewer days in any fiscal month; • are closed temporarily and relocated within their respective trade areas; and • have expanded, but are not significantly different in size, within their current locations.
Adjusted EBITDA Adjusted EBITDA increased to $275.2 million in 2023 from $168.9 million in 2022, an increase of $106.3 million, or 62.9%. Liquidity and Capital Resources Overview Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility.
Adjusted EBITDA Adjusted EBITDA increased to $313.1 million in 2024 from $275.2 million in 2023, an increase of $37.9 million, or 13.8%. Liquidity and Capital Resources Overview Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility.
These attributes have driven our rapid growth and strong store performance as evidenced by our store base expansion from 345 stores to 512 stores and net sales growth from $1.408 billion to $2.103 billion from 2019 to 2023 and average annual net sales per store of $4.3 million for the five-year period.
These attributes have driven our rapid growth and strong store performance as evidenced by our store base expansion from 388 stores to 559 stores and net sales growth from $1.809 billion to $2.272 billion from 2020 to 2024 and average annual net sales per store of $4.3 million for the five-year period.
We incurred unused line fees of approximately $0.1 million in each of 2023 and 2022. 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 we must comply with during the term of the agreement.
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 we must comply with during the term of the agreement.
The increase in gross margin in fiscal 2023 is primarily due to favorable supply chain costs. Selling, General and Administrative Expenses SG&A increased to $562.7 million in 2023 from $490.6 million in 2022, an increase of $72.1 million, or 14.7%.
The increase in gross margin in fiscal 2024 is primarily due to favorable supply chain costs. Selling, General, and Administrative Expenses SG&A increased to $612.4 million in 2024 from $562.7 million in 2023, an increase of $49.7 million, or 8.8%.
The increase in net sales was the result of new store unit growth, a comparable store sales increase of 5.7%, and $34.0 million of sales in the 53rd week. Excluding the 53rd week, sales increased 13.2% year over year. Comparable store sales increased 5.7% in 2023 compared with a 3.0% decrease in 2022.
The increase in net sales was the result of new store unit growth and a comparable store sales increase of 2.8%. Excluding the 53rd week, sales increased 9.8% year over year. Comparable store sales increased 2.8% in 2024 compared with a 5.7% increase in 2023.
Depreciation and Amortization Expenses Depreciation and amortization expenses increased to $27.8 million in 2023 from $22.9 million in 2022, an increase of $4.9 million, or 21.4%, the result of the i ncreased asset base due to new store growth and investments in existing stores . 44 Index Pre-Opening Expenses Pre-opening expenses increased to $14.1 million in 2023 from $11.7 million in 2022, an increase of $2.4 million, or 20.3%.
Depreciation and Amortization Expenses Depreciation and amortization expenses increased to $33.2 million in 2024 from $27.8 million in 2023, an increase of $5.4 million, or 19.4%, the result of the i ncreased asset base due to new store growth and investments in existing stores . 46 Index Pre-Opening Expenses Pre-opening expenses increased to $19.3 million in 2024 from $14.1 million in 2023, an increase of $5.2 million, or 37.3%.
For further information, see Note 8 under “Notes to Consolidated Financial Statements.” Net Income As a result of the foregoing, net income increased to $181.4 million in 2023 from $102.8 million in 2022, an increase of $78.6 million, or 76.5%.
For further information, see Note 8 under “Notes to Consolidated Financial Statements.” Net Income As a result of the foregoing, net income increased to $199.8 million in 2024 from $181.4 million in 2023, an increase of $18.3 million, or 10.1%.
Income Tax Expense Income tax expense increased to $61.0 million in 2023 from $31.1 million in 2022, an increase of $29.9 million, or 96.3%. The effective tax rates for 2023 and 2022 were 25.2% and 23.2%, respectively.
Income Tax Expense Income tax expense increased to $66.1 million in 2024 from $61.0 million in 2023, an increase of $5.0 million, or 8.2%. The effective tax rates for 2024 and 2023 were 24.9% and 25.2%, respectively.
The variance in the effective tax rates between the periods was primarily due to state tax rate changes, offset by an increase in discrete tax benefits related to stock-based compensation. Discrete tax benefits totaled $1.1 million and $0.3 million in 2023 and 2022, respectively.
The variance in the effective tax rates between the periods was primarily due to an increase in discrete tax benefits related to stock-based compensation. Discrete tax benefits totaled $2.8 million and $1.1 million in 2024 and 2023, respectively.
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.
Seasonality 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.
The dollar increase in SG&A was primarily driven by higher selling expenses associated with our new store unit growth, as well as higher incentive compensation. As a percentage of net sales, SG&A decreased 10 basis points to 26.8% in 2023 from 26.9% in 2022.
This increase was primarily driven by higher selling expenses associated with our new store unit growth. As a percentage of net sales, SG&A, exclusive of the one-time stock awards expense, decreased 10 basis points to 26.7% in 2024 from 26.8% in 2023.
The increase in comparable store sales consisted of an increase in the number of transactions. Gross Profit and Gross Margin Gross profit increased to $832.4 million in 2023 from $656.1 million in 2022, an increase of $176.3 million, or 26.9%. Gross margin increased 370 basis points to 39.6% in 2023 from 35.9% in 2022.
The increase in comparable store sales consisted of an increase in the number of transactions and basket size. Gross Profit and Gross Margin Gross profit increased to $914.5 million in 2024 from $832.4 million in 2023, an increase of $82.1 million, or 9.9%. Gross margin increased 70 basis points to 40.3% in 2024 from 39.6% in 2023.
(2) Average net sales per store represents the weighted average of total net weekly sales divided by the number of stores open at the end of each week for the respective periods presented. 43 Index The following table provides a reconciliation of our net income to Adjusted EBITDA for the periods presented: 2023 2022 (dollars in thousands) Net income $ 181,439 $ 102,790 Interest expense (income), net (14,686 ) (2,965 ) Depreciation and amortization expenses (1) 35,120 28,903 Income tax expense 61,046 31,093 EBITDA 262,919 159,821 Gains from insurance settlements - (897 ) Non-cash stock-based compensation expense 12,237 9,951 Adjusted EBITDA $ 275,156 $ 168,875 (1) Includes depreciation and amortization relating to our distribution centers, which is included within cost of sales on our consolidated statements of income. 2023 Compared with 2022 Net Sales Net sales increased to $2.103 billion in 2023 from $1.827 billion in 2022, an increase of $275.7 million, or 15.1%.
(2) Average net sales per store represents the weighted average of total net weekly sales divided by the number of stores open at the end of each week for the respective periods presented. 45 Index The following table provides a reconciliation of our net income to Adjusted EBITDA for the periods presented: 2024 2023 (dollars in thousands) Net income $ 199,762 $ 181,439 Interest income, net (16,311 ) (14,686 ) Depreciation and amortization expenses (1) 44,128 35,120 Income tax expense 66,052 61,046 EBITDA 293,631 262,919 Non-cash stock-based compensation expense 19,445 12,237 Adjusted EBITDA $ 313,076 $ 275,156 (1) Includes depreciation and amortization relating to our distribution centers, which is included within cost of sales on our consolidated statements of income. 2024 Compared with 2023 Net Sales Net sales increased to $2.272 billion in 2024 from $2.103 billion in 2023, an increase of $169.0 million, or 8.0%.
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. 48 Index Seasonality Our business is seasonal in nature and demand is generally the highest in our fourth fiscal quarter due to the holiday sales season.
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.
SG&A also include 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. SG&A generally increase as we grow our store base and as our net sales increase.
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. The components of our SG&A remain relatively consistent per store and for each new store opening.
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 $124.4 million and $51.7 million for capital expenditures in 2023 and 2022, respectively.
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.
Under the terms of the Revolving Credit Facility, as of February 3, 2024, we could borrow up to 90.0% of the most recent appraised value (valued at cost, discounted for the current net orderly liquidation value) of our eligible inventory, as defined, up to $100.0 million.
Under the terms of the Revolving Credit Facility, as of February 1, 2025, we could borrow up to 90.0% of the most recent appraised value (valued at cost, discounted for the current net orderly liquidation value) of our eligible inventory, as defined, up to $100.0 million. 49 Index As of February 1, 2025, we had no outstanding borrowings under the Revolving Credit Facility, with $85.8 million of borrowing availability, outstanding letters of credit commitments of $14.0 million and $0.2 million of rent reserves.
The increase in cash used in investing activities is primarily due to a larger investment in capital expenditures related to the completion of the Company’s distribution center expansion in York, PA and the construction of our new distribution center in Princeton, IL, and purchases of short-term investments of $273.5 million in the current year, partially offset by maturities of short-term investments of $247.4 million.
The increase in cash used in investing activities is primarily due to a larger investment in capital expenditures related to the development of new stores, the completion of our fourth distribution center in Princeton, IL, the acquisition of former 99 Cents Only Store locations and the acquisition of former Big Lots store leases, and purchases of short-term investments of $482.7 million in the current year, partially offset by maturities of short-term investments of $347.5 million.
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. 39 Index 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.
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.
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.
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.
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.
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. 42 Index 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.
The increase is primarily due to additional store openings and remodels. We opened 45 new stores and closed one store in 2023 compared with having opened 40 new stores and closed three stores in 2022. As a percentage of net sales, pre-opening expenses was 0.7% in 2023 from 0.6% in 2022.
We opened 50 new stores and closed three stores in 2024 compared with having opened 45 new stores and closed one store in 2023. As a percentage of net sales, pre-opening expenses increased 20 basis points to 0.9% in 2024 from 0.7% in 2023.
Gross Profit and Gross Margin 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 and amortization. Gross margin is gross profit as a percentage of our net sales.
Accordingly, comparable store sales are only one measure we use to assess the success of our growth strategy. Gross Profit and Gross Margin 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 and amortization.
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.
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.
With the expansion of our York, PA distribution center and the addition of our fourth distribution center, we believe our distribution capabilities will support up to 750 stores . 38 Index We have invested in our associates, infrastructure, distribution network, and information systems to allow us to continue to rapidly grow our store footprint, including: • growing our merchant buying team to increase our access to brand name/closeout merchandise; • adding members to our senior management team; • expanding the capacity of our distribution centers to their current 2.4 million square feet; and • investing in information technology, accounting, and warehouse management systems.
We have invested in our associates, infrastructure, distribution network, and information systems to allow us to continue to rapidly grow our store footprint, including: • growing our merchant buying team to increase our access to brand name/closeout merchandise; • adding members to our senior management team; • expanding the capacity of our distribution centers to their current 3.0 million square feet; and • investing in information technology, accounting, and warehouse management systems. 40 Index Our business model has produced consistent and predictable store growth over the past several years, during both strong and weaker economic cycles.
As previously stated, however, if our actual experience does not accurately reflect our assumptions and forecasts, we may be exposed to losses or gains that could be material. We believe a 10% change in our assumptions as of February 3, 2024 would have impacted net income by approximately $1.0 million in 2023.
As previously stated, however, if our actual experience does not accurately reflect our assumptions and forecasts, we may be exposed to losses or gains that could be material.
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. Net Sales We recognize retail sales in our stores when merchandise is sold and the customer takes possession of the merchandise.
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.
Summary of Cash Flows A summary of our cash flows from operating, investing, and financing activities is presented in the following table: 2023 2022 (in thousands) Net cash provided by operating activities $ 254,497 $ 114,346 Net cash used in investing activities (150,087 ) (111,454 ) Net cash used in financing activities (48,744 ) (39,273 ) Net increase (decrease) in cash and cash equivalents $ 55,666 $ (36,381 ) Cash Provided by Operating Activities Net cash provided by operating activities in 2023 totaled $254.5 million compared with $114.3 million in 2022.
There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any repurchases. 48 Index Summary of Cash Flows A summary of our cash flows from operating, investing, and financing activities is presented in the following table: 2024 2023 (in thousands) Net cash provided by operating activities $ 227,454 $ 254,497 Net cash used in investing activities (255,341 ) (150,087 ) Net cash used in financing activities (33,252 ) (48,744 ) Net increase (decrease) in cash and cash equivalents $ (61,139 ) $ 55,666 Cash Provided by Operating Activities Net cash provided by operating activities in 2024 totaled $227.5 million compared with $254.5 million in 2023.
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 We recognize retail sales in our 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, gift card breakage, and income from our co-branded credit card program.
Cash Used in Financing Activities Net cash used in financing activities totaled $48.7 million in 2023 compared with $39.3 million in 2022. The change in cash outflow in 2023 is primarily due to $52.5 million of shares repurchased in fiscal 2023 as compared to share repurchases of $41.8 million in fiscal 2022.
Cash Used in Financing Activities Net cash used in financing activities totaled $33.3 million in 2024 compared with $48.7 million in 2023. The change in cash outflow in 2024 is primarily due to $24.0 million of proceeds from stock option exercises in fiscal 2024 as compared to $6.7 million of proceeds from stock option exercises in fiscal 2023.
The increase in net cash provided by operating activities in 2023 was primarily due to higher net income year over year. Cash Used in Investing Activities Net cash used in investing activities totaled $150.1 million in 2023 compared with $111.5 million in 2022.
The decrease in net cash provided by operating activities in 2024 was primarily due to changes in working capital, most notably the timing of tax and merchandise payments, partially offset by higher net income year over year. Cash Used in Investing Activities Net cash used in investing activities totaled $255.3 million in 2024 compared with $150.1 million in 2023.
We opened 45 new stores and closed one store in 2023. 45 Index Capital expenditures in 2024 are planned to be approximately $85 million, primarily for the construction of our fourth distribution center, which is anticipated to be operational in the second half of fiscal 2024 , as well as the opening of 50 new stores, store-level initiatives at our existing stores, as well as general corporate capital expenditures, including information technology.
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.
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 can vary.
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.
To the extent that subsequent physical inventories yield different results than the estimated accrual, our effective shrink rate for a given reporting period will include the impact of adjusting to the actual results. 49 Index We have not made any material changes in the methodology used to recognize permanent markdowns or inventory shrinkage in the financial periods presented nor do we anticipate material changes in assumptions we use for permanent markdowns or shrinkage.
To the extent that subsequent physical inventories yield different results than the estimated accrual, our effective shrink rate for a given reporting period will include the impact of adjusting to the actual results.
The following table summarizes our material cash requirements over the next several periods from known contractual obligations, including contractual lease obligations: Less than 1 year 1-3 Years 3-5 Years Thereafter Total (in thousands) Operating leases (1) $ 106,625 $ 181,855 $ 136,762 $ 132,033 $ 557,275 Finance leases 1,011 835 13 1,859 Purchase obligations (2) 21,400 - - - 21,400 Total $ 129,036 $ 182,690 $ 136,775 $ 132,033 $ 580,534 (1) Operating lease payments exclude $26.6 million of legally binding minimum lease payments for leases signed, but not yet commenced.
The following table summarizes our material cash requirements over the next several periods from known contractual obligations, including contractual lease obligations: Less than 1 year 1-3 Years 3-5 Years Thereafter Total (in thousands) Operating leases (1) $ 108,249 $ 217,754 $ 153,559 $ 188,025 $ 667,587 Finance leases 961 721 - - 1,682 Purchase obligations (2) 12,795 - - - 12,795 Total $ 122,005 $ 218,475 $ 153,559 $ 188,025 $ 682,064 (1) Operating lease payments exclude $20.0 million of legally binding minimum lease payments for leases signed, but not yet commenced.
Historically, we have funded our capital expenditures and working capital requirements during the fiscal year with cash flows from operations. 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.
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 Federal Deposit Insurance Corporation (“FDIC”) insurance limit.
As of February 3, 2024, we had no outstanding borrowings under the Revolving Credit Facility, with $90.0 million of borrowing availability, outstanding letters of credit commitments of $9.7 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 Revolving Credit Facility also contains a variable unused line fee ranging from 0.125% to 0.250% per annum. We incurred unused line fees of approximately $0.1 million in each of 2024 and 2023.
Repurchases are expected to be funded from cash on hand or through the utilization of our Revolving Credit Facility.
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.
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 opened 45 new stores in 2023. We expect new store growth to be the primary driver of our sales growth.
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.
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.
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 operations.
Our stores are supported by three distribution centers, one each in York, PA, Commerce, GA, and Lancaster, TX. We completed the expansion of our York, PA distribution center in fiscal 2023 providing an additional 201,000 square feet of distribution capacity.
As of February 1, 2025 we have grown to 559 stores in 31 states. Our stores are supported by four distribution centers, one each in York, PA, Commerce, GA, Lancaster, TX, and Princeton, IL. We completed the construction of our Princeton, IL distribution center in the second quarter of 2024 and began shipping product in July 2024.
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. 46 Index During 2023, we repurchased 808,669 shares of our common stock for $52.5 million, inclusive of transaction costs, pursuant to our share repurchase program, and during 2022, we repurchased 848,133 shares of our common stock for $41.8 million, inclusive of transaction costs.
During 2024, we repurchased 639,788 shares of our common stock for $53.0 million, inclusive of transaction costs, pursuant to our share repurchase program, and during 2023, we repurchased 808,669 shares of our common stock for $52.5 million, inclusive of transaction costs. These expenditures were funded by cash generated from operations.
Goodwill/Intangible Assets We amortize intangible assets over their useful lives unless we determine such lives to be indefinite.
We believe a 10% change in our assumptions as of February 1, 2025 would have impacted net income by approximately $1.0 million in 2024. 51 Index Goodwill/Intangible Assets We amortize intangible assets over their useful lives unless we determine such lives to be indefinite.
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.
We also make initial capital investments in fixtures and equipment, which we amortize over time. 41 Index We opened 50 new stores in 2024. 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 periods.
Removed
Our Growth Strategy Since the founding of Ollie’s in 1982, we have grown organically by backfilling existing markets and leveraging our brand awareness, marketing, and infrastructure to expand into new markets in contiguous states. We have expanded to 512 stores located in 30 states as of February 3, 2024.
Added
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 expanded our store base by opening new stores organically. More recently, we have expanded our store base through acquiring former store locations of bankrupt retailers through the bankruptcy auction process.
Removed
In addition, we broke ground on construction of our fourth distribution center in Princeton, IL in April 2023, the distribution center is expected to be operational in the second half of fiscal 2024.
Added
Our growth strategy continuously evaluates the best opportunities in the marketplace and combines organic new store openings with the acquisition of store locations. We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner.
Removed
Our business model has produced consistent and predictable store growth over the past several years, during both strong and weaker economic cycles.
Added
With the addition of our fourth distribution center, we believe our distribution capabilities will support up to 750 stores .
Removed
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.
Added
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.
Removed
Our disciplined buying approach has produced consistent gross margins and we believe helps to mitigate adverse impacts on gross profit and results of operations. 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.
Added
Included in SG&A expenses in 2024 is a one-time expense of $5.5 million for the accelerated expense resulting from the modification of existing equity awards for our Executive Chairman. Excluding this one-time expense, SG&A increased 7.9% to $606.9 million in 2024 from $562.7 million in 2023.
Removed
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.
Added
This decrease is primarily the result of increased leverage of fixed expenses from the increase in comparable store sales.
Removed
This decrease is primarily the result of leverage of fixed expenses, partially offset by higher incentive compensation expense. Included in SG&A in 2022 is $0.9 million, respectively, of income related to gains from insurance settlements. Excluding the gains in both years, SG&A decreased 10 basis points as a percentage of net sales in 2023.
Added
The increase is primarily due to the earlier timing of new store openings in fiscal 2025 as compared to fiscal 2024, start-up costs related to opening the Princeton, IL distribution center, and dark rent expense associated with the bankruptcy acquired new store locations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risks Interest Rate Risk Our operating results are subject to risk from interest rate fluctuations on our Credit Facility, which carries variable interest rates. As of February 3, 2024, our Credit Facility consisted solely of a Revolving Credit Facility with advances tied to a borrowing base.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risks Interest Rate Risk Our operating results are subject to risk from interest rate fluctuations on our Credit Facility, which carries variable interest rates. As of February 1, 2025, our Credit Facility consisted solely of a Revolving Credit Facility with advances tied to a borrowing base.
We cannot be assured that our results of operations and financial condition will not be materially impacted by inflation in the future. 51 Index
We cannot be assured that our results of operations and financial condition will not be materially impacted by inflation in the future. 53 Index
Because our Credit Facility bears interest at a variable rate, we are exposed to market risks relating to changes in interest rates. As of February 3, 2024, we had no outstanding variable rate debt under our Revolving Credit Facility.
Because our Credit Facility bears interest at a variable rate, we are exposed to market risks relating to changes in interest rates. As of February 1, 2025, we had no outstanding variable rate debt under our Revolving Credit Facility.

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