Ollie’s Bargain Outlet is set to invest a significant $15 million to ensure it remains a leader in low pricing within the retail sector. The bulk of this investment, amounting to $10 million, will be allocated in the latter half of the year, according to information shared by company executives with analysts on Wednesday. There is potential for this figure to increase, they noted.
Maintaining Customer Trust
CEO Eric van der Valk emphasized that maintaining the lowest prices daily helps establish trust with customers, unlike promotional strategies such as high-low pricing or excessive coupon use, which can undermine their value proposition. During a conference call, he mentioned that pricing and margin are managed with diligence to sustain this trust.
Financial Performance
During the second quarter, Ollie’s reported a 360-basis point increase in their gross margin, which reached 43.5%. This rise included a 380-basis point contribution from tariff refunds, as well as benefits from reduced supply chain costs as outlined in a press release issued on Wednesday.
Despite achieving a net sales increase of over 9% to $741.3 million, comparable store sales declined by nearly 2%. This dip in performance was attributed to adverse weather conditions, cautious consumer behaviour, and intense competition from rivals offering significant price reductions. Chief Financial Officer Robert Helm highlighted the difficulty in pinpointing the primary factor affecting sales, given the blend of these challenges.
Expansion and Outlook
Ollie’s expanded its footprint by adding 14 new stores during the quarter, offsetting the closure of one store due to storm damage. By the end of Q2, the retailer operated 686 stores across 36 states, a nearly 12% increase. This growth also spurred a nearly 13% rise in loyalty programme membership, which now stands at over 18 million members. The company’s recent expansion efforts included taking over leases from Big Lots and several stores from 99 Cents Only in 2024.
The quarter’s underperformance and the challenges of 2026 were framed as temporary anomalies, according to executives, who noted the company’s decade-long strength in comparable sales outside the pandemic era. Helm expressed confidence that normal operations would resume by 2027. For 2026, Ollie’s has scaled down its projections for store-to-store sales, anticipating them to remain stable or improve slightly, a revision from the initial 2% growth target. However, they still aim to open 75 new stores.
Reporting based on coverage first published by retaildive.com.