[Management View]
Ollie's Bargain Outlet reported $577 million in net sales, a 13% increase driven by 25 new store openings and a 2.6% rise in comparable store sales. The Ollie's Army loyalty program saw a 9% membership increase, contributing over 80% of total sales. The company maintained a flat gross margin of 41.1% despite increased SG&A expenses due to higher medical claims and store growth.

[Outlook]
Ollie's reaffirmed its FY2025 guidance with net sales between $2.579 billion and $2.599 billion, and comparable store sales growth of 1.4%-2.2%. The company plans to open 75 new stores and expects a gross margin of 40%. Tariff impacts are included in the guidance, with a focus on reducing reliance on Chinese imports.

[Financial Performance]
The company reported a 13% YoY increase in net sales, driven by new store openings and a 2.6% increase in comparable store sales. Adjusted net income was $46.1 million, with adjusted earnings per share of $0.75. Inventories rose 16% YoY, reflecting accelerated store growth and strong deal flow.

[Q&A Highlights]
Question 1: Could you elaborate on the state of closeout availability and any concerns across categories?
Answer: Inventory was up 16% at the end of Q1, indicating strong deal flow. Retail bankruptcies and store closings have provided access to product pipelines previously unavailable. The environment is expected to create more product availability in the back half of the year.

Question 2: How are tariffs affecting negotiations with suppliers and pricing strategies?
Answer: Ollie's maintains strong vendor relationships and is committed to its value proposition. The company is reducing reliance on Chinese imports and expects retailers to be strategic in pricing. Ollie's remains a fast follower in pricing, ensuring value for customers.

Question 3: What is the outlook for real estate opportunities and store growth?
Answer: The setup for 2026 is strong, with potential for above-algo growth in real estate. The company is pleased with signings from Big Lots and sees high-quality real estate opportunities.

Question 4: Can you quantify the impact of Big Lots closures on comps and visibility on comp lift?
Answer: Big Lots closures had a less than 25 basis point headwind on comps. Stores near former Big Lots locations are seeing low to mid-single-digit lifts, indicating market share gains.

Question 5: How is the Ollie's Army loyalty program evolving, and what are the expectations for the new shopping event?
Answer: The program is being enhanced with a second Ollie's Army Night in June, offering exclusive discounts. The event aims to drive loyalty and long-term value, with expectations for a positive impact on sales and earnings.

Question 6: How should we think about the phasing of gross margin and tariff impacts?
Answer: The company targets a 40% gross margin for the year, with tariffs included. The third quarter is expected to be above 40%, while the second and fourth quarters may be below due to promotional events.

Question 7: What is the impact of Big Lots' reduced scale on deal flow and terms?
Answer: Ollie's is seeing abandoned product pipelines, particularly in consumables, due to Big Lots' reduced scale. This has led to better terms and expanded relationships with manufacturers.

[Sentiment Analysis]
Analysts expressed optimism about Ollie's strategic expansion and strong deal flow. Management's tone was confident, emphasizing the company's ability to navigate challenges and capitalize on market opportunities.

[Quarterly Comparison]
| Metric | Q1 2025 | Q1 2024 | YoY Change |
|-------------------------|---------|---------|------------|
| Net Sales | $577M | N/A | +13% |
| Comparable Store Sales | +2.6% | N/A | N/A |
| Adjusted Net Income | $46.1M | N/A | N/A |
| Adjusted EPS | $0.75 | N/A | N/A |
| Gross Margin | 41.1% | N/A | Flat |
| Inventory Increase | +16% | N/A | N/A |

[Risks and Concerns]
Key risks include potential tariff impacts, reliance on Chinese imports, and the ability to maintain pricing gaps. Seasonal category performance may be affected by weather conditions.

[Final Takeaway]
Ollie's Bargain Outlet demonstrated strong financial performance in Q1 2025, driven by strategic store expansion and robust deal flow. The company is well-positioned to capitalize on market disruptions and maintain its value proposition. With a focus on loyalty program enhancements and real estate opportunities, Ollie's is poised for continued growth despite potential tariff challenges.