Ollie's Bargain Outlet (OLLI) 28 May 202020 Q1 Earnings call transcript

Good afternoon, and welcome to the Ollie's Bargain Outlet Conference Call to Discuss Financial Results for the First Quarter of Fiscal 2020 [Operator Instructions]. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from Ollie's.

As a reminder, this call is being recorded.

On the call today from management are John Swygert, President and Chief Executive Officer; and Jay Stasz, Senior Vice President and Chief Financial Officer. I will turn the call over to Jean Fontana, Investor Relations, to get started. ma'am. ahead, go Please

be good from remind quarter A issued XXXX copy this website. release and and section may Investor the the call that of this release management's company's a company's can press that first financial want of in afternoon, you, the press Relations to everyone. I covering results afternoon found everyone Thank results on was future those remarks respect predictions, statements, on expectations limited or the could Litigation Act including, differ statements that and to be Private forward-looking Any materially contain call. Reform of forward-looking to, of actual mentioned with today's the such performance, but estimates including meaning XXXX. within Securities considered not items, should our

on update not results or future them information not and encourage statements, today, events. might undue forward-looking Factors detailed earlier of factors. filings, you as new earnings future our quarterly should well which revise issued are our to on we on a may report only place undertake obligation that be or and in reliance these control for any for Form no to filings. speak You these XX-K reports Form as We SEC our annual these XX-Q including release review description as in of today more our discussed affect and

earnings and adjusted we income measures important financial that such We to be are John. net operating measures to net call diluted assess non-GAAP now adjusted closely referring our GAAP most on included release. today's these to call will EBITDA, certain financial turn may will to financial be to to performance. as adjusted income believe income, the non-GAAP Reconciliations share, measures adjusted per over I the investors operating in our comparable

for a challenging what staying joining we Thanks know time call We all is deal you your that and and impacts hello, We our very of safe we you us families Jean, and and are with today. the hope everyone. healthy. joining Thanks, appreciate as COVID-XX.

remarkably been end in respects, bad for times. operating periods. Our to economic history the up closed over In XX good us and consistent navigate uncertain both industry effectively has that demonstrates many years sets well Ollie’s in

on This our and head many challenges opportunities unprecedented creating which was on. teams fronts, unique faced quarter

each number safety have nothing been tireless family reflect customers to for we express The entire thanks liquidity through has to the the and to and and Ollie’s knowhow, We That the and team's would during heartfelt managed the results crisis. ability our these I competencies. health flexibility times rally their other. deliver, our remained has short of together our been work continued of to our this of is the and ensure one and strength priority. This the do efforts what extraordinary. core model want my

and remained customers buy have hard work they need. provide what environment stores open a to Our to safe we for our

Our aggressively meet teams had in quarter. demand shifts to the move during and consumer to sudden quickly

So down. let break me this

sales continued needs. in to initial our to the weeks. quickly and open That we As in experienced with to last here reassure sales quarter, serve we the volatility we you responded consumer are customers significant following their We reaction COVID-XX. that pressure still in shared

very deliberate. focused was message marketing and Our

Our stores are open.

These and our our rebound essential we the great enables a improvement broad based trends stimulus across discussed improvement all a our other considerable including items X.X% goods We in departments. experienced the in offerings comp you last sourced our stores, monies. need to console quarter categories. in and end have in from products, keep to to every as great down unavailable We deals expanded We high surge certain across in call. at The new of the began people prices, then resulted sales addition to mid-April safe. are receive taking actions in in you all items providing precaution demand

able the to begins we the Now consumer insights how of changes move to demand. the some quickly and resulting pandemic team. share respond with I'd in challenges merchant to to It like were caused the by unique

leverage long standing relationships, merchants new to of our products source vendors for essential talented Our vendor and customers. obtain

now quarter, they of are position desire focused availability year. laser mentioned opportunities remain capacity in on and maintain I right some great all seeing While necessities, they not manifest categories. my as We're in for talked open of product strong. buy more across the what deal robust lose to getting did these more sight our uptick us, our of call had we're before, come Last to in That confident greatly on little us benefited deals that to We're because we're the to playing opportunistic better to the expect capitalize it and allow the I significant to said, recent full a and and for approach. lots disruption we've demands of take powder chasing impact sales to think consumer is offense opportunities business our But deals. of be want to changing And from the all I time closeout a respond this so us environment. dry and at have to times. about bigger flow this does marketplace later we sales. I

volumes product at is are full trends. operating second three substantially They our sales and part response plan the and supply higher equation processed chain. to aggressively DCs in The of steam. All pushing

flow stocked. to the them handling the getting to we're stores and are goods keep through out DCs Our

Our and our very busy time. store associates this restocking for and hard continue to to during shelves our required cleaning customers to working serve stores health adhering guidelines are safety, CDC

all that the due new closed XX We We during which have to on XX been permanently temporarily opened and fire. schedule. leased so year, quarter, of new stores, a to stores far two one stores. in this one Turning was

our new been adhere openings including pandemic, subdued, more that we guidelines, to this have distancing. ensuring During store CDC social

for said, We XX to remain track is on given and local disruption delays open state permitting the these pleased potential XX on restrictions year. the to due push the to which of created by That stores. we store this could early some openings are with performance construction pandemic, next and However, year. the to early there stores

results the difficult in our have indicate a As and navigate perform environment. ability we to

The is represented get very good normal, to second key for and off to performance and in remain priorities a first will quarter back things challenging start. quarter term a circumstances, as the same From good the reason. strong and longer perspective, our strategies

is model Our business sound. the and proven is underlying

to detail Before our over provide I to trends. want turning on it current Jay, more

Our in finish continued strong into May. April has

comp of is of While words a this exciting, to these needed are trends. few heightened caution in as demand the spike sustainability

well crisis, know is of economic will this skis business not downturn our get when trends the related our and suited how can for when the current our we think It's retailers and model over financial about important to either one or trends. periods uncertainty, be and impacted health stimulus the of we duration reopen. extent no While predict other

You going what know do; business cheap. keep and and we buy we doing our we're sell us. We're disciplined go about cheap to how about

how pleased most The we positioned As of positioned through this to past at we as valuable built has we for get prices as the this extremely we business be organization. comfortable with secure this I'm well crisis in and very work customers. pandemic, have operating continue great to part our the believe a asset how are we're with culture, company very be together. to these run deals proven all great of proud we our to we're

for to I field Our store want incredible during business get their our help distribution center they truly support need. contributions heroes diligently particularly centers, associates, what store and period. working X,XXX are members, over to this management thank difficult customers and team safely frontline dedication to are the our

We grateful are all do. for you

going You to know now. what I'm say

now to results. the take you Jay to call Ollie's. hand financial through over are We I'll the

due dedication sales with to and We offset in a quarter and afternoon, items decrease the basis and orders. rate We the everyone. carry increased year. XX.X%. to the in rates housewares. to a pandemic, opened openings by decreased more books, rebounded the increase substantial consumer million, the consisted Best very stores pay, to in and seeking closed first John store team way transactions. expenses operating to we expenses in million in to recognize such to results of to our X.X% included -- gross and production, In Thank expenses of $XX.X costs. of in quickly Thanks, new store number and response margin that consumables, this offered able for ending units the stores. entire an in a customers comparative states decrease per trip including quarter of want new penetration place decreased less to and in heightened count with electronics. shelter managed Bottom those sales maintain basket XX.X% customers saw sales beyond while higher we're quarter. and Despite you. of trucking, per our the included up domestics prior the X.X% the the $XXX.X each And respond our saw saw our healthcare, performance, were essential nicely of my aids, sales Gross departments shopping keeping crisis. throughout SG&A running. despite X.X% is making categories their associated were which and We're X.X% demand. I chain our all this start performing the and units those to due also able new the margin boundaries significantly teamwork [indiscernible] that and XXX life sales two transit to prior supply gross and the to net million challenging $XXX.X business Preopening following average $X.X pleased is were in through shift the heroes including as profit due in increased frequently year. to quarter during the to average increased We food Ollie's expenses, basket late XX quarter everyone food XX period additional deleveraging in good XX the stores frontline SG&A selling are only express in primarily in million. increased in to we expense from gratitude increase spike the store timing Comp premium volatile categories in discretionary Comparable while store in primarily down gross increase as an amazing flat to quarter. quarter performing with below count. year-over-year The margin points departments generally

million, percentage to Adjusted offset points $X.XX share $X.XX to quarter. the the in shape. or of year Adjusted prior due sales operating the inventory the a from basis Adjusted Inventory over by X.X%. per income, increased the XX quarter. share partially timing to from receipts Adjusted diluted basis tax $XX.X year, in $XX.X in is expenses by the reduction and increased up preopening worked in year margin $XX prior the margin X.X% insurance increased the We primarily the at flow diluted rebound an in end in after insurance operating decreased sales net net gross good which compensation consumer the to which expenses the in income, ramp million the due stock to XX.X% million of gain to store per prior our primarily $XX.X X.X% a response and based spike quarter. settlement excludes prior partially to the increased percentage to a to the points settlement gain of XX As in EBITDA X.X% quarter in X.X% related tax sales. the or preopening to from growth net new decrease decreased in million quickly as in the and demand. deal late Today year. excludes reduced benefits

demand. in strong cash. our borrowings expenditures the Last million, quarter we revolving million $XXX and the $XX.X for Capital keeping DC. is are year, and facility under the in prior period, had pipeline totaled million no million At with the of outstanding $XXX compared end DCs of the approximately year credit our construction quarter. our million new included $XX.X $XX.X with in pace Our expenditures

not Now turning providing to heightened impact including to fiscal guidance. uncertainty on earnings and associated XXXX, we XXXX are with fiscal consumer pandemic the duration due the demand,

level is but key some on Forecasting in high this share I environment obviously drivers. difficult can thoughts

sales. First

sales. year, to given and measures as are a throughout front volatility including a shelter regions the of continued liquidation across trends strong current the of and potential for economic impact retail of the John and the changes competitive factors, demand, Our scale That we number place consumer around expect of reopening stimulus mentioned. stores, said remainder continued the large uncertainty in on very

of of XX%. manage margin, our In to goal long-term gross terms we continue to

in year the XX of assumed This be to Texas we stated, sales that As mix new product may if our margin well a if and points changes our might XX be significant pressure sales by trends. experienced factors aggressive rate from as gross of we would widespread DC. impact as potential gross impacted be promotional Other shift rate had would our margin sales. basis we've see for headwind previously that we the liquidation will impacted course in usual occur

rein our we SG&A, our expenses know, expenses. always always a Finally, will on as tight you and have keep

rate largest quarter During controlling job did being flat teams first the related pay associates. managed a additional costs costs. great premium for the through we The SG&A a as despite COVID-XX

about is expenses As before we X.X a X said on leverage to comp. point our typically

better can we than do that we if expect leverage. some So

half XXXX provided with to The a we the early regard unexpected opening to XX earnings for and the following temporary remainder first openings, With half, XX the stores second current we handful in closure. with the what normalized one expect our into planned new closure store unchanged call. new pushing stores Our plans from with last cadence in of XX include and QX. those more on a one

Given to potential into our a be disruption the some by openings is for COVID-XX pushed next of created from or practical year. delayed realities there the

actively we $XX will but of deviating evaluating necessary. million We stores, not and are respond $XX marketplace expect these initiatives. level store and primarily capital for to as plans, projects new IT expenditures we from the to million To-date, are

to of Our proven record us track operator to start keep in back model financial the future. growth opportunities, about our Q&A strong disruption long now I'll navigating position the Operator? term the excited turn session. call

Thank Boss the comes question you. [Operator with JPMorgan. Matthew line Instructions] of Our from first

now Your line open. is

the front quarter. a maybe had I of you when on momentum to congrats Is we any and relative to talked pandemic. the John, low way comps the end half and at the single March thanks digit and quarter positive Great, the nice of in in the entered know there for half confidence May? in and materially driving and can your you second seen back that what the half of help quarter in you trends of size the up comp a categories the inflect April you're that just have the Maybe seeing year? second positive

date, April we positive early when right did very been nice the to and we comps more we then really drivers started XX, and to broadly through out as broad dabble we XX buying still started, turn Sure they certain April. offer. And in And buying based. products business in And that spike nice saw were essentials Matt. bit a money business very, we consumable and March the overall to the With May the April a you the a was And the people overall regards business. negative when know, do after saw theme a little has did uptick in see for by categories March. started And in we the in XX. see went March the stimulus go April necessities

of positive comping luggage, which very which But comping is is expect categories positive, strong. a you would one very than very All small and that to not our been category other are we which based broad it's in. operate be

percentages values stay time. it. we're in from about excited we're at specific away this that point But going giving comp color of on in or terms So to

half think the on as closeout Great. backdrop, margin about How And as of then margin. then the at the XX.X% margin that on front a quarter? of confidence for in see forecast think follow And the [ph] up the year to the year? in second the potentially the best you ground your up gross components gross it to about in original back we gross picking what's today,

We This can on XX.X% Jay. start in. we basis. targeting talked sales a And John Matt. is I year level and Yeah, chime a on about that full might had normalized were that

guidance, QX seen in low, again, with relatively April in only remainder expected increase what year annual normalized pressure the overall, happen model normalized on reported a nature in May the quarter sheltering not layer year an QX just if expect be given back We we're sales have the of would of margin XX.X%. in was if at end the ago, we now, into kind our changes everything come basis because of that's changes the we'd go could of for to and but volatile the at we've closer the because if happened QX and of sales and and at planning, an of you our up. place we consumer But demand, looked in think giving in and the not certainly I that do for rest model, liquidation if and recall, QX, XX.X%. and a we on

we a we zero well the the So happen to XX to And normal both of mix [indiscernible] trends XX have can't forward supply pick maybe because those hit comp would going have to year as merchandised a have as as side been that, expected the got to of remainder QX. on handicap on sales up the margin that would call well basis against costs chain for would it. we really thought QX, going up points. we X as in But with what's of both ago, we pick

Perfect.

of be and of in sure. The more is back say the some be expecting again on the a Matt pretty to habits back our we're COVID I to going good long to able I deals would breakout have we're would that to a probably half normalized, as margin don't some year add close we of for spending contraction consumer we shape as real of or down. the things the year and the see see of in to up remain that on massive contrary half make

Perfect. Is way And still incremental change dollars. then the the bottom to through line incremental model XX% that just one an No housekeeper. topline flow flows?

The basis? XX% pretax on Yes. a

you. Thank

question comes from line next of KeyBanc Thomas Our Markets. with the Capital Brad

now line open. Your is

the afternoon congrats Hi, Jay execution in John quarter. and and there good on

Brad. Thanks

follow to of on and up wanted I two the side parts. inventory purchasing Maybe things.

is, what that I part, about looked this you much a a which your categories first you've then been pretty you was might've down role interesting little Can the John, a that cadence you like, which behind as chasing and The be are in? And have talk of see bit. some will comment you trends coming business played could maybe the talk quickly out hoping you bit with that second close a about, think little the availability pipeline. may how

order availability become Brad, product, Sure. of takes with available of bit and manufacturer to said, have of have as a get to the of it little little manifest sometimes product to to bit has in with itself pricing levels. the we to some pain regards time our a that time and because

months that outs see that more So that becomes I a start outskirt expect that flow true next on. little to collapse we'll the see in close on maybe the say three to we nine we would able bit deal the at months to to six may

these little later will think year. We portions the start I bit a are on in starting of to the but see already, some significant

you said, Your remember other question, I what Brad. can't

Sorry.

the late, that With business respect been of to really the sales sort after accelerated having off weak. chasing

the [indiscernible]. quite about where which best you maybe which today categories you and and feel inventory Just your are stands inventory

right The strong. very HBA, Everything's very I strong. We're inventory very There's has Domestics has right very, now. strong. now. would nothing that very or pretty well all in. been our working has that we feel seasonal been been I chasing stale nothing say well. working single business of department. businesses very Everything's housewares every excess really have with is good

way. We're a we're a be are just buying. to position much So, business. bring finding it the into possibly we're And merchants able The great having where we're can we to to chain. excited buying the operate as chasing this time as

so Great. much. Thank you

Brad. Thanks,

Thank you.

from Keith next Peter of line the question comes Sandler. with Our Piper

Your now line is open.

in consumables question. taking essentials there to some or the been might closeout afternoon. world. On start availability of there's out the chatter the Hey, Thanks close for that availability, good up dry out

that charities, rumblings product or there John, to the bit setting might of quarters? Just CPG is anything larger some donating cause quarter you're of that that a be some starting in or liquidation chatter on closeup your mix companies now channel. little your or instead the the it might dip consumables coming to down to

velocity heard go We they just grocery of we when not had. April I that consumables in look the other shelves yet, to the retailer, any and go to stores would, But to from but mass merchant Peter. that donating necessarily suspected sheer wiped product, any haven't were the from that had the March you of the

opportunities available in as this be some that that capitalize or offset people companies there not not every of still that the be and of day label I you shortage the you able products working half year. a might need on consumables to are think that a positioned that a of we be So to from on I essentials I that consumable have may tell expected product CPG that the these lead could we'll on for to label be see. consumable shortage be way necessarily would to front the some that will and shortage are each compensate for But front. for. probably of feel to major CPG normally the well But hard other may and sourcing back private merchants that our looking

headwinds how kind maybe and year reverse starting just to just Could issues waterfall, back out? some play you're you the they're tee of maybe and going they're, the lap Okay. Very either starting current to those then, And around up perspective the dynamics. good. to one of think and cannibalization of on last those we

year. of like lot be got in dynamics, like really be did to environment lap certainly lapped we'd focused start to that past Yes, the to we we Obviously, we I call. about the the expect and a to especially be going calls, it talked not really with QX may and in we mirror on, on that it's earnings paid as in of it attention given half this Peter, rearview forward. expect this not environments fully mean, up and the into the something that something we've or bringing back

Okay.

Thanks guys. good lot and a Sounds luck. good

Peter. Thanks

you. Thank

question line next from Our comes Randy of the Jefferies. with Konik

is open. now Your line

hear me? you Can

Randy. you got We

faster to are curious at John, these they real from through time real any of improve from that Just future? you strategy change some the more executive to you? on did implement level basis changes Hey, navigate, that reacting to change as the the faster help a Anything you'll you perspective all how there helped anything process productivity continue you kind in you wise? that implement navigate respond top pop feel really business to Just here. a or a thought as long-term you perspective COVID process even up

little haven't Randy, the the buy with bit that as than dry was changed prior COVID be to that working my different a to biggest currently to maintain maintain that I strategy much much. are This March answer opportunistic the react of on talked to the deals mean, we more. about that heightens terms just thing able and the in to we open merchants had awareness powder available. to even

decisions nimble. business. in quickly. very, what's lot model very don't merchant our overhead consumer. the companywide the We've and the Our make We We for interest always to team to have best our built is a react rapidly company of

buying really with All marketplace they're to to as are and in the just And And up the put it. we're great got products the fast We merchants said, as work. I our reacting. really set they like doing no can. skill changes. So

updated to And geography how the you of give continue you're acquisition of of the pick any able year you to on That's to that of here. new and during quarter were throughout great go through up help next the balance Sure, the indicators as What estate model into any can year? performance terms kind of and real by during about responding the thinking type consumers customer we you shows hear. us about really perspective the in shine pandemic?

by speak and Yes, Jay this the it's Randy, I relatively John customer performance can to start new consistent is and might on a But acquisition. the been regional region.

I in as see orders shelter changing evolving. place think flows, we ebbs it and or

So But have peeking the from starting been ultimately, see of consistent. down. But peaks. longer to see that at May. strength to the when their and you that open come fairly day down see areas and been April, then end can can we it's maybe open pockets maybe then in early are started you And trending the recently late

For that it's consistent. part over time, the most been pretty period of

I acquisition, I our into recently transactions we mean, come new the think trends quarter end new terms customers in strong, and of seeing especially the our are customer of at certainly and May. stores, are certainly into

to in we're the in new stores have which And those do guidelines. CDC mean, adhere is up having we So best that the thing. great box, bear customers are signing mind to in people Ollie's as we I can.

doing We're capacity. running limiting every And sizeable register. we're So other we're volumes.

many would an maybe are getting increase we're those in definitely as quite up not as signed seeing like. But we of we So folks that.

Helpful. Thanks, guys.

Hello? Randy. Thanks Operator?

line your Ciccarelli, is Scot you. now Thank open.

are to We systems upgrade guys? How reason the there. need you

it a little was them. working for Scot, home they're think I from challenging So

end Nothing assume fade. you to the extrapolate mid But want stimulus period it upper was know most still No. the Because sales is that teens to current your of guys call through for you worst I embarrassing. tie don't running it it not like results. comps range negative starts March? retailers. guys the sounds fair to The to were

Scott. Absolutely. -- early middle March April. through the front in there of That's from XXX%,

been the it. for overall they're products retailers start these the couple then regarding in marketplace to more as to is I going months. just closed reopen, have Okay. you guess goods. discounted have older a how going Got second guys potential impact And question lot for to a of think They're the about

that of rate? bit high think reach from exhaustion cheap, low you other that just you're pretty people selling parameters. because value Some customers have the a to little that of overflow of do potentially your But pretty may creates lot stuff buying a going

comfortableness the in sense rationale it been the Home first of of any I there reopen that is remainder that The our, competitors And opened people lot of they're those There I when Because to tier have our that's guys do. of entire part is Depot, will what have all open. is a have we Targets, think lot Lowe's, of a for going time. a call what guidance not providing The been uncertainty Walmart's, QX. period of

hard in to still will the will crux who us, of really folks discounting but there up be clothing be going of But and there. and caution lines be it's the be the there. part the back for to The But some open that's not start our discounting that's business. a of retailers some So for obviously are something our nominal, home big problem the there. there'll But for going this think that's we're is half in going we out of And definitely quarter the currently that definitely happen. half to back year. on area then

it. Got

Thanks. that. appreciate I Okay.

Thanks, Scott.

Thank you.

comes question the Kessler line with from next Our Mike Stanley. of Morgan

Your line is now open.

bit My one. to a it's hopeful follow little a It's everyone. Hey, as well. of first up question, previous Simeon, a

have, there's operate of You states of talk know, stores about think states trend. a are that the of couple closed? performance maybe and between of in April still late I the cadence reopened? mentioned if I that May. some you versus nuance weeks consistent ones group was And that we And have somewhat worth where you the that don't any Can

all it's -- think. I the say we're than all couple is There's and air regions. our been an geographies. of John. very have warm and very been that of I still this based But it's you early regions our tell others would we're would seeing overall across before consistent very, -- been than such stages that a Simeon have all it's yet. that broad to regions across we've other of warmer benefits sell stores are little conditioners other we're a gotten gotten our I started

pretty which Got mentioned not moment. sense, providing right it. it's this factors all you And at and then tricky these makes guidance,

rate. helped an stimulus have planning regarding has You at you're pretty or internal business? from high guess selling the right, an internal how a perspective, thinking And

month. proper You're you high amount a turning And have month of inventory over at have to to rate. the still yet,

through share have stimulus that of that own be? a But going could the probably with us do you benefit. what process? do you that are how guess, I sense your And best So guess have on won't you you

the I XX. you -- stimulus saw share an you, you, impact coming with definitely in as would wouldn't And expect. when immediate I started business probably we would out checks April the it that tell

So as to you are guys marketplace know that continuing August. out those believe I funds through into go the

believe basis, So buy are we're looking a we're our to businesses. benefit of of do out. quantifying, weeks definitely to it or open We're all going and that's But in a five and that weekly us retailers managing four to all on that. not we

we make continue continue So as great it. adjustments we're need along just a chase position to the to where the arise And marketplace. we on business and to that push continuing to see capitalize continue the think to at in to merchants and we're opportunities we the

Great, thank you.

Simeon. Thanks

Thank you.

of question Your from Edward Fargo, line now Kelly a with Wells next Our open. is line

of how you on thinking especially much regularly, about this and some If there it think perspective of Is of of taking if is talking disruption the the about afternoon. is back give closeout experience out is? hi, just step any this help way up? that you here. mean, we back I'm have curious, in size I think thoughts you And a guys year. size can is about I that the this the running kind around guys. we're us the big about have this the half XX%, something business. any how the we opportunity opportunity Yeah, could as just double? associated could prize how business be with the there if was Good wondering

'XX. I would probably this you that don't seen. is never but something a Ed, I experienced We can percentage tell it we've with I think 'XX, put

I think between opportunities out out that this going problems I more going is than as we today. to be you there's But even know. to there going we to be seeing see How be to are they and and larger immediate large than it's to We're definitely a saw cracks probably guys what little there. more going starting themselves 'XX-'XX. lot to be imagine. don't a there's And something that presenting we're would going opportunities already, as speak be,

situation be will on position to And do our capitalize it. we're And is great about excited to excited going definitely tell it. able we're in as come So about financial put about. they you opportunities a us to we these

is would might for some that? pack do there the to can. As even it I you storage you much you things guys you if about and think to capacity, buy want How opportunity as out away products as guess and there I imagine much that like of these maybe capacity you can

which out XXX,XXX new that have capacity. up with future built There our obviously we bit a center just fully into And grow that's us in we already. opened Texas, in and is feet. to quite square And of for the that's distribution

perspective a issues. we of take So that take lot We take quickly. tell pass wanted from could a of off bit have could that inventory pretty to we any capacity can probably holding inventory, that it probably I $XXX a called could was control have a A if on down, quite we you goods down down didn't that dating we there's million of not

then last players is you. kind one talking not there other at just I'm to cycle going And curious through just it's how opportunity in really If that the this looking of Okay. close competition you're so or opportunity just been has for matter? outs. the And big about just

of I Yes, latter it. it's the think part

product. a just said, about easy not I already do become into do a close think getting lot to as closeout talk the of And to we've opportunity closeout decide I out big, is matter. not and it's but people going retailer so business, the to think that it's a

down makes deals the it, when for it's the make to get the talk think they and to that them it. person handle to I hard happen sell then So, them end game, people for sense trying to but for about to of them

-- while opportunities think So, for about it and I them. there's they talking they're

for go to be here. be the that price think going to able be is so to enough us and around find there'll big be I

you. Thank

line Rick Nelson comes of next Stephens. with the from question Our

line Your is now open.

Thanks, good what available, afternoon. you're plans? John, there can you comment you quality would store sites to the accelerate market, opening real your came estate seeing

Rick. Sure

We of a commercial haven't big as real change seen estate in yet.

that of acceleration and real our in a come answer I take push the for we've us envelope. terms feel cadence a by of we're able as white space and talked long-term store to out of of would rate think to what continue do we we And the normal It's lagging to algorithm, the than and that deliver going that control. the appropriate. in the with of do that in growth growing grow results couple to our to of continue We're would growth time. would that's have. our we mid-teens in for is work take our about very you And think the, based to change, greater our terms be long availability we we not know, I sites. have just We'll period We second on of no, estate. going on to opportunities. business even years sites not available But that's becoming generation a piece as real

take. work So take the when and on appropriate we'll they're landlords to them we'll them us for with

advantage buyers terms categories that. outs? of any to for new potential [indiscernible] that merchandise of in close Also hired Thanks take to

buyers No, to that it as relates we've hired this. there's new no

We our this people had first during us But items to are stores than what has we on looking team. executing do, our definitely powerful intact. the we're We and of other businesses the they moving market from demand and couple a replenishing benefited we're We're period big not and selling some needed that change. have probably are made the been us. that, a that for necessary time. -- the, real Categorically consumers just we quickly items within call have have Everyone's pretty fully always We're it and process jumped merchant We there. us. essential like I'll on the that of chased of our for. normal quickly,

Thanks, and good luck.

Rick. Thanks

Rick. Thanks

you. Thank

comes of from Our with Credit Suisse. the Frommer Judah next question line

open. is line Your

Thanks on as story about Yeah. in the further you just My congrats executing just opportunity big opportunity of one guys. of execution here. size customers? kind the Kind does Hi, of high on opportunity for the we in taking terms kind kind closeout particular, going extending Ollie the of level. potentially forward thinking question of or first do how and opportunity out and it If business market the this the be? Ollie's born for COVID about move the think to of is how you potentially are new see

need be to at other availability based I down probably with in, the would going discount least on we're I going it consumer also Judah, it's actually with place -- that and take close outs folks are impact I both have increase to product. both, with them is to for find some temporarily take the you'll move people where think of increase to I going down who we're to high situation here. And along and situation the coming retailers discounters of times folks think in to think place it's see and trade it's unemployment the the distressed say I of need, going unnatural, another those

know if kind hourly makes bonuses that in whether housekeeping you the that changes on is mentioned in there plan can and of just terms side, more what or Okay, I then tie into it's you And the of exactly you've And don't general pay, environment? premium done guys labor maybe there? just sense. the have what disclosed you

associates part generalities cover the, management the associates But weekly And we've started did, pay are now, need to staff planning hourly, the provide premium continue the we're through we'll evaluate on I'll numerics. we today. biweekly I And in shop to bonus Sure, time frontline on And in. full to to if that for Jay consumers XXth. it's very the to want can that running work the that our and into to about of a feel but And workers continuing now centers or that's basis as care long we We we to provide June environment them. for these believe, right take through something that as hard the pay, imperative well. March Judah. our continued the also get and what the increased pay hourly for gave time and stores. as probably back associates And we hourly a to distribution premium XXnd. to and store we then we our decide it

this it it. a is to not wasn't the $X.X but other million, In of of we like incremental about Judah, million the expense was We're $X Jay. some quarter, It pay. charges lot. these taking incurred And premium related companies,

Okay. Great. Thank you.

you. Thank

of from line the Chandni Goldman Sachs. from comes question next Luthra Our

is Your now open. line

into just you've you. Thank you your doing my throw the quarter could that are on, then about I if new the way color by essentially more Thank wondering been into was are way Hi. sticky open? But anything talked token of that closed? to environment. have more of forward? did that customer for gains that. question. And some acquisition what got your around change there retailers, you to most light share disseminated customers so your you market guys. this message get you some you a perhaps in sort much taking is Nice marketing And trying it to ensure, you is being going retailers then to assess you Just and in

on the too probably acquisition us that. a With related the early overall the Army customer. weeks. It's Sure. for actually of to It's Ollie's only to regards new been comment few to specifics

and I it to too that. got So into say for premature that it'd much figure us out. get about too data We to be think

that of -- sorry. With what yet. question, I'm not as We was your have regards other done to

dissemination of message, you your there? just in what's it? Not marketing changed the message are has what Just how but communicating

marketing quarter deal. out that Army and made major have But when know adjustments imprint sure Ollie's available all we lot real a And items been advertising. is the directly Because to if nothing have open digital. that don't consumer bit that little were scale. during we I essential things we minor were we a started, very print our changed. on on testing making our and they message a a working essential knew has for basically has But campaign business. calling to focusing first a our big it's Facebook open and communicating to that changed of product of primarily base our But few our emailed and them. Yes, everyone more in was go for we're little customers to not with We most small doing the know

that to get out to So we the had word marketplace well. as

so Got you much. it. Thank

Thank you.

you. Thank

Our line next of comes the America. of from Liz Bank Suzuki question with

open. now Your line is

you. thank Great,

basket customer existing that you cross data also you're that in guess bet are categories Ollie's Army So the customers acquisition size in getting I through finding any they shopping new shopping you are that mentioned I basket and weren't mean, you make or increased. to to they in you buying just in one those shopping size? just don't need are bottles mostly to where increases that they trips seeing before Like, consolidate up of sure in three of are frequently? instead shampoo come as

Basically, already lot Liz, from purchased departments central we're buy they dropping seeing before. cross them the product and a of

the level. So We've in They're to time down terms as we as said within dissecting not information wide earlier, broad it's buying of store base. that been yet. the customer of that very to had do

in seeing are categories a coming mean the some I I bankruptcies. opportunity potential anything just what's what's up. position closeout Okay. follow how retail that on on up you we're real categories available. differently product and pressure based broader can clothing you out seeing give industry up more about and sort the available your would maybe and and lineup like given of and And question mean other inventory categories then coming

were going we're we fashion. change Well, our business strategy. Because to to fast not going overall into not get

it. day terms and in fashion But I it's basic the that that Ross's definitely the think hard to come take deals. those because a that at in will not it's about, goods clothing come hard something ready take about and and we be fashion nature, goods comes marketplace I'll lines available that's TJs we really -- with. the and clothing in the willing that leave home have But other of if for their about we get involved to need may would look adapt and able oriented, the not to

already or fact starting up from of we're other have So orders retailers filed to those bankruptcy. that canceled in pop see some

active we're right now. So

do. and strategically think the John I a And stick going we're to I add we've buyers. that the every categories, about how both to And lot historically to deals, day this we're But just gotten in well questions about on going merchants is to we're to deals. get this scour do we thinking as Liz said, what new Jay. we're new we on -- And gotten to it the back customers of in. to as good And that. mean, existing ultimately, like that ultimately, for customers, in going new retaining during us if getting day the categories we've win that's new time our come to strong get in this

Thank sense. you. Makes Yeah.

you, Thank Liz.

you. Thank

with line Our of Jeremy next question comes from Capital. Hamblin the Craig-Hallum

open. Your now is line

Wanted potential with store guys. the delays. start for Congrats mentioned openings and to you Thanks.

of impacting Are the that of have a is or seeing permanent openings in the something we blades terms the is or are you wave don't crisis, second In currently hypothetical getting there that year? here. other through half store back things

what is of municipalities behind. some the Jeremy, seeing Hey, far to starting reopen, very but are are the local they we're

stores there done to There's is a the in we've early to to today push are probably into earlier them seen definitely had delays on needs the that stores So to the of get on Those mentioned to actually handful Jay definitely that period done buildings work for fourth by us risk some get the of that be a able at to time. the over quarter risk. landlords turn that we've call. out had

in very done, work perspective. having a The to to the just situations. in landlords but It's ready -- from getting and are control the not governments signed. all done So in probate there's the local do we're not leases we're not what -- get certain it's hard get of those pushing We're those take store. the trouble

is that be that's there work may got delayed. done So to be

CapEx Is that the follow-up then And just as quantified still understood. Okay, range. you think $XX a million in the you're at? that I to number looking had that, expectations

is. it Yes,

Okay.

an because in to going Lastly people in people seeing changes trying terms levels, of top with in terms of you're personnel store fewer it's each staffing potentially unusual lot any or in-stores situation. more is stores of need other? your you of Are such matrix, just have labor simply a on

in our boxes. low customer a Yeah, been Jeremy, employees always of low not lot touch with service a and we've business

needed of in to the we've but the hiring additional number man in So in in We stores more so with sales, there's pretty stores, light. third definitely, average we've and nothing material. using our been employees We our always our of XX been hours overall the since bodies employees week anywhere in to we and with we more more don't XX been square uptick in the boxes, people, our have needed store, associates April, XXX regards have store. from hours in

our So stores following and we're guidelines it's employee not the that a an distancing perspective. running we overwhelming have the need spacing register every and our for base from other with CDC social then at

have tremendous need hours we with but definitely out there, we sales are the pushing So increased a volumes. more don't

that any time Is over of hours?

sure. Yes,

And typical your store your of what's on overtime payroll a Okay. as a year? percent

right have right it We pay have I not place pretty the in time, manage like that, don't but over We really like the closely. material. it's time. to don't we to at right the bodies

luck. Good job. Great guys. Thanks

Jeremy. Thanks

you. Thank

I today's would concludes turn to This question-and-answer session. call you. to now like John Swygert remarks. Thank the for back closing

support. Thank quarter everyone for you our forward on you, continued our look Thanks to second next and participation with your operator. We call. sharing earnings results

conference call. and Thank concludes for this today's Ladies participating. gentlemen, you

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