Ollie's Bargain Outlet (OLLI) 3 Dec 202020 Q3 Earnings call transcript

Good afternoon and welcome to the Ollie's Bargain Outlet Conference Call to Discuss Financial Results for the Third Quarter of Fiscal 2020. At this time, all participants are in a listen-only mode. [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. call Jean the to Investor turn started. get will over Fontana, to Relations, I ma'am. ahead, go Please

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

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

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

express our joining Ollie's that for healthy call family the for and and Thanks your healthy everyone. hello, gratitude and sustain their to you to hope entire today. Jean, Thanks, my want to We work and I tireless family serve environment. rally safe. priority. efforts to short been and these together safe our nothing one and maintaining has The during while our extraordinary. remains has ability team's number of been customers That a shopping times

Our results performance and store our them. our changes every merchants, demand our opportunities steady of our and reflects store entire center the one an in times. unprecedented were to delivered possible of thank the react made ability sincerely these teams, by the third marketplace, to I We even strong This organization, the and resilience center, distribution quarter. outstanding each support execution and consumer associates. challenging during in

strong a an margin new sales increased in and Our growth flow, line overall income growth, by comparable gross of This great deal XX% expansion top robust performance control productive adjusted our sales expense XX.X% in line. the in combined store top stores, sales increase drove net with driven was led tight growth to Comparable XX%. store quarter.

broad again of quarters almost based once were departments with positive. comping sales Our three our

bed and beauty categories performing bath, housewares, food. top and Our and flooring were aids, health

of laser execution cannot focused plans. on remain from our of we we pandemic, the the predict While here, direction the

our The sourcing across relationships and product vendor to all incredible it customers begins As our leverage our you of to continued deals, new strong, vendors. all merchant know, with standing team long provide to categories. amazing value deals from merchandise for

the cough, over For major new supplier worked cold, flu instance, a counter really and medicines, get. a we good of with

innovation to value identify opportunities ever. deals excess seeing the and inventory, and in customers. every capture generated of large each variety day, opportunities. scale merchants and to deals from strongest to are to this Our product Closer our ranging bankruptcies. these The we and like exceptional great deliver remains We're well-positioned changes Deal and visibility happen. ways makes our continuing are to overruns, deals flow and source are package

We deals an position it liquidity relationships, strong large to and long-term proven to make have handle exceptionally ability vendor the happen. the

on a inventory, of we hand chased terms velocity. continued to little In our due the during business the sales quarter

position pleased compared are product our up We with to year. of ending flowing. There's inventory last X.X%, ton

and flexibility said an consumer my managed million midst with of demands, to less are inventories this increase the in prior goal ramp keeps members, year. our We and increasing inventory improved us biggest us to of Fresh is to leaner end the the in over demonstrated store. clean front the a powder selling Ollie's in was levels to Ollie's than also levels the quarter respond are a square the as in shopping big in past receipts second our action. an active Having up standpoint over our stores sales We two busy pushing third from device crisp, be quarters. our I dry into even new all product opportunistic This customer inventory that, distribution our a record reduced we give with increase receipts believe ended quickly at changing the for benefit Maintain holiday continued as allows well driver from run customer per history. success new of to foot have Well centers by open growing. to Army in averaged. more the historically a the just experience store to presenting period. customers call deals XX.X% period with and signups membership XX.X purchases.

growth the increases and sales drive Army New in customers have helped Ollie's transactions. to numbers have of the and contributed

new have in these customers We excited the to very Army. enlisted are

benefits new tools to such utilize Ollie's have for onboarding, long-term bonuses, communicating We as deals special become the including will we customers continue introduce Army exciting to our members. enlistment and and

have more substantially often shop larger stores drive stated past, and the Army As we members in our a basket.

redeploying dollars optimize to programs We marketing and are the stages early our of in spend. enhancing

attracting engagement continues customers, well on focus to as customers]. deepening Our be as [look-a-like with existing

with been will and read some We as test continue early digital pleased new such far initiatives so have customized ads. to

great successful are change this dollars Instead to pandemic. to of customers the December members, most due continue up will as Ollie's have Army We're Army rewards exclusive event we're learn, the for will We week XX, December members giving year through to calendar an a deployed. tactics shopping and Army with to The week test, to going event always. Sunday, our of making Saturday, the Ollie's one same night run special evening were best from entire get ramp deals. for also normally and XX

the savings will be a associates and bit just our will event for This stretched longer. out and be week-long the Importantly, safer year, little our customers. fun

Our new driver to of be stores significant continue a our growth.

results in date year as even to quarter performance the achieved store comply with social distancing with to We limited we our expectations. guidelines. events market New sought these and outstanding exceeded

and of year, We have one very stores during to opening and the new relocation team's of I opened of am despite proud this including execute complexities pandemic. operating a ability these projects the total XX the added

growth relationships marketplace. continued one and And we of a attractive retail, the sectors scale, from and disruption have knowhow, benefit company are the believe and in the the the the to the most We we closeout industry.

about very sites. believe the business laser real plans. tremendous expanding growth focused availability for model of estate much With growth, and extreme value supports the great footprint on are of runway proposition are our retail We we our excited our we

see stores long-term to an of of component pipeline. continue growth build a store we to out target XX algorithm As new as important stores We per stores our year. with our XX

XX existing of new store openings, Our looks to of markets with up XXXX mix expectations both pipeline solid and strong four relocations. with a including

single latter the timing Turning In quarter were of first saw peer third Black the fourth moderated few some low and calendars our with of the Friday, some date as to weather as with they quarter, pleased comps comp in-line weekend categories. the Friday sales weeks promotional in positive in November, of as we Black to so around impact were part We quarter expectations. and do stores from continue with impact cold our to now digits. well our the

we the say, would Mark locked remainder of the for As loaded holiday and season. are

to weeks of financial beginning including ahead consumer the on big Army impact great There week of and predict of related us, XX. crisis continued and cannot remains lot a uncertainty Ollie's behavior. COVID the have a deal health of We December we

we our customers. to is very in feel what about we control holiday manage great tightly good always, and deals our provide will our As ability to

We to do focused do stay will continue we and what best, execute.

lost over to successfully. Looking our so friend the and our our forward highly since carry and be It ahead, Co-Founder, passionate, of our we future other challenging long-term I of unexpectedly missed times. the our business have and bullish not has all and team and ago serve these talented, I and sorely am growth during legacy to proud thank XX,XXX intact algorithm together rallied communities demanding will a the as be CEO remains Mark entire know how we for leader to could was passing. Mark’s support and family. responded regarded that loved customers prouder by was I members they're Ollie's want doing Butler. Mark one-year how team his each year almost I Mark about ever prospects.

it As now results. financial I'll Ollie's. the to to we hand you are over through we Jay say, take

do. teamwork. the also that dedication my afternoon, We I their Thanks and team to Ollie's and express good everyone. all for entire to gratitude John, you Like want amazing appreciate

XX.X% increased million. very third transactions. in our XX.X% average $XXX.X are We and with basket quarter Comparable to sales both results. driven Net the increased sales in pleased by increases quarter, store

stores XXX new increase. the year-over-year During stores XX the quarter, for we opened XX total XX in ending quarter-end, we stores four one quarter for an a relocation have the year. including states and XX.X of Since opened with stores more new

primarily expenditures Gross points stores outstanding Operating borrowings and under operating SG&A navigate increased million offset in the supply margin by related tight sheet above increased labor last selling to year. which increased times. new with and excludes million have points partially XX in and based due to in year, income, year. quarter our net to improvement The decreased existing additional the other million to XX.X%. Operating million XX.X%. to from diluted gross the increased very basis and SG&A At to capacity higher performance carrier robust share XX.X%. benefits control. increase $X.X due earnings prior sales. costs income XX.X% the merchandise store we new XXX new margin, in $XX.X flexibility $XXX totaled domestic $XXX expectations percentage import new to the across $XX.X our of million chain cash. and to included no Capital in per compensation margin rates XX% driven $X.XX increased end to million increases to many DC in of pressures. in XX.X% and Last and and and increased compared period, to markets. increased approximately expenditures basis expenses continued in tax occupancy due $XX.X year. by leverage $XX.X million the continued was to $XX.X margin XX.X% was million to our continued the million expense payroll and Adjusted Adjusted strong $XX.X stock our strong both had balance increased adjusted EBITDA due and basis DC. facility, our $XX as our $XXX.X costs increased expenses XXX stores million, and sales from cash decrease flow, EBITDA points in costs the revolving With $XXX.X higher million prior to $XX.X additional XX.X% The to we XX.X%. to $X.XX Our the Adjusted last of XXX perform from quarter wage from net support these million, driven basis to increase year. sales to for a margin million profit by the and points construction for credit

related demand. are increasing optimistic business, about to we impacts, consumer which and is affect While momentum of potential COVID-XX there our the could uncertainty its

practice of year. not specific the we the our balance for these of continuing For guidance reasons, providing are

to execute. ability As remain confident always, we our in

strong operator environment We the to opportunities our model model like The now and performance have flow in closely margin challenging results start to turn stores. our we to well-positioned the consistent business more to the We excited growth maintain estate and to quickly algorithm Operator? to and we this capture of that real deal great in as results gross and this. session. look demonstrate call to when delivered back new even customers economic is have ever our I'll uncertain long-term both our from our for our pivot the expect target us grow expenses times always cycles. manage X,XXX in Q&A flexibility strong us strength of enables The do. navigating and just of

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

now Your line is open.

thanks. Great,

maybe could the could cadence do versus just magnitude XQ John, of remainder if you basket deceleration So of the you you think What by you progressed? drove that of touch how quarter? or Maybe speak about in category transactions and fourth on thinking comps the the to are November?

Yeah, Jay is I of speak John in hey, and this can some metrics as to well. chime and Matt, will those

part And You was the in that, that know, high September, the about comps. moderation of first XX% August, shift a We of driven promotional teens you a like months, strong close talked October, large third probably to we in know, had we in saw a in by that. And in quarter quarter. great some part two performance was very the then calendar.

out year-over-year. went mailer later week one Our

an about, so impact And know, for quarter. the helping is really Black you us. the then, talked the There’s the think, know the what at know, you the of to play. we weather, few roots cold in we've over that the our in lack we've of was weather not And, stick out retailers there's this know, other certainly that cold kind a factors terms far you trend disclosed also, on of we we October. obviously, So is, of doorbusters And and course month. spread Friday, know, you

where with now us. with which are season, I'll really of and really is let And those are think for holiday comments. for ready feel positive the we biggest rest but very we add drivers, we So, John the big the that, some

spot it. on one holiday loaded that. thing we're Jay remaining Matt, is, in and believe locked position we think to I that good do would we tell – with the one the I period, on is we The for think a and are you takeaway capitalize

retailers now. good that cold our Black And and definitely the we're where box of run Friday sales. right some on the the impact had sitting feel by obviously, weather The we apparel, how our So, outerwear, heater I has us. or timing hit big think

with locked were loaded we So, and those.

the out pretty quarter. with for come we'll think I of good the remainder

Okay, how great. relative expansion to gross margin then a basis saw quarter? fourth in could best that to merchandise the on third maybe think about in And up quarter? you points in gross third just margin margin, XX And expansion the we quarter follow quantify the the

points In margin higher merchandise third basis quarter, Yeah. was of the the we XX were that on points year-over-year and side. XX basis improvement

we've going So, you think certainly, you Matt, giving we're about for not of but thing guidance, think I is that that know, QX. the and you're targeting margin kind year, And asking about XX%. that. know, we're know, you talked this to before one shoot mean, I I

thinking transit, pressure we're with we're still to that I well think it the the But front on at as to certainly be know call our in chain ballpark we XX.X% on you experiencing are side, XX%. as of, the labor supply DCs. the going

guys. luck of Best Great.

Thanks Matt.

Matt. Thanks

Thank you.

Our question line Scot the of RBC from Capital next Markets. with comes Ciccarelli

now Your is line open.

Hey, guys.

Obviously, steady this per before extra dollars pay, etcetera. this at year, incurred SG&A So you've COVID, you pretty year had expenses store. Hazard

of can a had As gear we increase of we step is just our think if should us know, piece? models know, what about, this XXXX? in to you out with kind in back Or costs, seeing you kind of been kind we, function that you XXXX, help

you of giving talking no, we're I think are about there parts But to get we're it. given moving Scott, uncertainty, we going for is certainly, back mean, which not guidance premium expect this to you and about how QX, the forward is SG&A level. not the the kind with not some at in we're Jay, know, really QX, we're, we some – know, continue incurred to pay, we've we expect would normal XXXX. would

parts lot there. We there's about of haven't a moving next determination made year. And mean, I a

normalized at a I standpoint sales impacts from be know, would basis. look tend that. I You know, or XXXX, a that basis, and up but expect, modeling you on mean, say, obviously, you speaking, base to we around would be arena, I in we even down, on to And XX% think a generally if full-year going

And cadence you question, us the just Matt’s on year? okay. up can remind Well, then of last follow of a XQ

Of the comps?

Yes.

disclosed think don't I Yeah, we've that.

really haven't We gotten the by in into month cadence a quarter.

Okay. I you. Thank believe [indiscernible].

[XX for negative the [Indiscernible] month], for the or quarter?

Yeah, got it. Thanks.

Thank you.

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

is line Your now open.

give that taking color into and fourth Could And you question. on quarter? quarter? traffic us my you ticket some trended how in for trends has thank third Hi,

mean, quarter. both. XX.X% the and like And driven disclose of in talk Sure. by not the was basket I in said, average really, saw an third fourth by trends. driven we comp was was XX.X% I the And can average XX% driven going about the by increases transactions. basket was increase we It quarter XX% about we're to

closeout go could as that, then environment any mega possibility XXXX? to previously a is is And manifest the everywhere deals give you there you demand know, should you're to? of you they're deals, on into so pipeline? what mega update of really lot signs get closeout us Or it. about robust deal that there in you Got seeing spoken robust out not said know, there that You’ve a that an perhaps developing are

as Yeah, you out deals mega of put ever. is believe I would industry I tell Closeout the robust I that that that before, word regardless the as

has and the of, it before. talked has retailers uncertainty is ever mega been that deal lot as robust cancelled lot happened. The so Bankruptcies marketplace, merchants that the have been. of out environment lot still on a is a it closeout lot call about inventory day still every deals I've there's of closeout by flow in excess as a deals. There's Our collapsing I’ll of There each other are there. a

happening think the producing now manufacturers I never believe due to a there. timing are time. things and with those where try right on I come there's of in demand, major get will up catch the lot right to they

be be may year not us excess hoped, to us. early So, be it'll coming there'll well. coming as I think as inventory next It to as I had but

closeout very having on are market. So, our one of success on the departments. for bullish merchants feel products very getting I The each and every much

flow. any So, inventory there's that we're in pockets no Any missing. real deal or

about today. excited very sit we we're So, where

you. Thank you. thank Great,

you. Thank

Thank you.

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

is line now Your open.

a lot. Yeah, thanks

of Army have instead [indiscernible] that week impact of day John, current on communication the your the of Ollie's So, in thus in of performance the all? any quarter view at may kind far business

full not, hours Randy, or giving question. it's we're come week in sure giving you I'm not great that's the shoppers them normally going it store. four has to to now evening shop. but give madhouse, a to to the if a And them we're the one know, we're them give and

So now, very the the possible. coupon and big seven Christmas it's rest and have days to discounts pretty also store. get possible, going it's toys, on that of full They're use some to to

it we why of still the on feel back the part bullish very So, quarter That's very is possible. here. of half

lot weekends there's to of three So still a huge There's do. to volume come.

feel nice trends And tell Friday. that us recent post responses Black would seeing we're very So, here some good. we

loaded, to go. So, and locked I think we're ready and

about room expansion been, of Perfect. as us like little longer-term? current it's quarter, give by you how forward? opportunity, item your margin just merchandise still that think merchandise holistically expand thoughts kind but you margin and kind have, just good feel know, on saw And do in think as closeout to comments about you line of a then in there the know just to you some ever you're general the as how industry around I deal it thinking general, go you depended move about basis, you obviously just do it's deal further, being

is XX the point always process I consumer. if think a the back we're margin. have to to more think and important. not that building for thought we're model the loyalty built expand points holistically, brand that We we We're building We the a give XX margin. always better we shooting looking our doing than normally gross the

with margin. have XX% operating gross We the great margins

So, We're there's supply very the our expand no can gross pleased shareholders. on chain if we need deliver the XX% margin very, that to cover and to with that. impacts still

on how out So but that's shoot we an that's It manage basis. quarter, work annual that what margin. doesn't single way the really every we for

uncertainty, tech long-term now know, mean, the talk but And this fact, you to that. a about environment a when it's know, is this know, we to the very intact. fully and talk deals. longer-term, even you about and positioning, to next Randy, of algorithm just lot a got always expect you continue. into obviously real overall going Jay, estate flow. We a we've consistent be And, good lot is year of I we business. you this lot in is we we with It just done, expect know, And of of good what that deal get

are right We customers now. new getting

So, we think very that all up well. sets us of

about a very the know, basis. that algorithm long-term we're in of long-term You excited terms delivering on

new you know, the cash, war chest that your lastly, the know, of gotten distribution looks because like a in lot down with and, Thanks. the through sheet you you’re hump cash have we’ve an look expense. of center a gone CapEx of position enviable balance is looks needs it And just it

do think how do should excess flavor point, be thinking give when just the board you about cash proper of at cash with about does this how point? at and know, You a cash? And cash this enough what isn't just cushion yield, enough we little

it's is but something now, chase it's Yeah, Randy, flexibility. every we reasons Jay, of and pandemic, deals, a cash to with great we at meetings, big with to have our that cash, board the problem quarter now, for – keep given about that, the and this a remain it's most to to the conservative think the our and uncertainty and liquid talk right in remain just right building our with prudent environment and number we

continues what certainty that stock opportunistic nature. cash as to doing in in talked know, You get you about we we a know, the build, an environment, buybacks little is and more but

ready, need little around to happens, a when everything think we again, think, can the market that's that atmosphere I And from once and buyback stock I really, when so, standpoint. are get we But know, the COVID bit. and we you settle into a

lean needs, have refreshing horizon. not immediate term, also We you a We years – some but a stores. into could on can we our other of know, capital we DC certainly, couple the in got

So there cash, uses other are near-term. some for relative the and

Yeah Randy, to. we it to to work will afraid we be need if put

to So, is something we there and do need with it, we will.

Got it. Thanks, guys.

Thanks Randy.

Thank you.

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

Your line now open. is

afternoon, thanks. Hi, thanks and taking the Good for questions.

John, the And chatter calling cracked excited? the some circulars ago. that’s deals First And haven't this categories that not the I where happening, guess some really that some your maybe that thought it's maybe on changed is you're be environment, maybe on or on where for the closeout. elevated months more items certainly observations some backdrop, is maybe be us? all of or Could examples couple just that up even you're really very would or stores there’s a there's Wall helpful specific tangible that provide we products you us Street, of seeing that out of to it much. closeout just some

is ever. that better than in feel that strong would our you, ever stores as our our Peter, I flyers flow all. I assortment well. that as as feel is deal don't and the think the mix at Yeah. tell we on And We

opportunities we and had they think of that different with different last I consumer. have the year consumer see a might that [indiscernible] year lot year this different removing year was than given categories to that this sales the categories. were assortment providing certain around last things the And up we've are down in

seeing we're that of they been sector. here pressure But may have year there So, each goods. in not the available in pockets and that closeout every consumable to There's getting happens any as I you, us couple last and tell would things are a readily year. not are that nature

a But children lot goods, used real seeing in, it we're opportunities working as we're has it. educational well. call with seeing with more scrapbooking category. deals we're we're in Candy deals business mattress and We're year through. sporting I'll So, been additional book deals, furniture seeing or come that dealing our this strong the seeing to

So, deals some coming there's of flooring, We've through and on that's business. variety major the bath. lot a had bed

and open not So, push. of there our there – a to opportunities bought merchants to us correctly continuing shortage buy to numbers. They’re the all out is for are

where excited merchants are vendors new existing the vendor. sourcing great doing we're sitting So, and a we’re from and job products

we're across the entire good seeing So, flow board.

better historically. you through brighter could you stores, gives a see bit, but most that I think and the have so our I stock And look in than And our know can actually a we the quite stores a they I historically. have think walk that Peter, customer the all shopping you're stores they eliminated the getting top lot in experience. store end-to-end. the from stores are goods faster much

we're excited we're where today. So, sitting

through contemplated the And on helpful your just in and having after as know, the negative so focus we that Okay, not but term this impact you lack of the an time, maybe holiday that's in then get as particular stock lack, point and to alleviates slowdown is near John. the indicating down market, color, also maybe a maybe here e-com strategy much, November, season?

I think strategy obviously an the model. is model not e-com

not We and So, really call it, from field number feel mortars doesn't we definitely spike some play that there's away shop the and the why stayed that's do increased more believe spike who in in online. It COVID, there But and we and brick nature. an that's temporary two. was know, you I'll people bother us.

lot and our this model I is throughout We're learning positioned process very think well. very we're a very, resilient.

trends pop started well we've And us. we're positioned part the to some see we holiday. So, on already think think I the and pretty of back remainder for well

again, to offer the nature. and consumer, the So, in duplicate capitalize temporary can't it's you we that treasure once we're I think online. that hunt going very And experience to

Okay. the the Thanks all the of for a lot season. for Good holiday color luck guys. rest

Peter. Thanks

Peter. Thanks

Thank you.

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

open. now is line Your

Hi thanks. Good afternoon.

inventory. on question a First,

bit you most you that last a but What end that I from you that here a where position were of a about you bit feels after in like You you're you having had quite this the think trouble? past. all the you And inventory John, little running in in you standpoint talked you. wanted. more seem business obviously late have you than an quarter talk about categories little little the can leaner still more? seeing were been better bit have inventory quarter, chasing going Can of at forward bit Thank decision? than and didn't a talk

Sure. Brad, think year at would the quarter. like, to to Up real, want seems over right actually I close we the third be we I where X% the but I end prior were the of that X.X% year. were tell prior up it you, real being

there we're do. I was was stock that would sorry, pretty need think real up all. don't were good with buildings. we do that at anywhere square in all used a that top building $X That sellable on not was $X, retailer a in stock box. $X, carry as XX.X% say, I And well at here. good any last from year. a we I'm our in So, positioned have had we I much inventory as to sitting doesn't that's – foot what non-productive we Mark believe to to top a believe

but got inventory. be in I over, over in we next with against were it's I quicker QX start work where much we so be year-over-year a store over and like coming dry pretty think took year were really we fourth I to think see see helped from could, X.X%, little ended talking up cycle was we versus much XX% think away it, But with the quarter because to next much powder trying us, flat I that bit year think I QX, year year. would comps, after be where inventory. be COVID right discussion. Could caught probably surprise to it on XX%, really but quarter, than us thought this how would that didn't. of with inventory. I Comps a right we're by year, but cycled immaterial get that start over might we the know, business maybe, and to I XX% next we'd about when less in-line I X% accomplish growth more So, our in first I'd start this that we to the that to I you the mentioned

our our I in a shape. relied right much in real think buy good line have. departments all every with business. that of category pretty not open missing to in single any we really We're are that missing in categories We're

are how running on rather follow up about whole a you the having And Army event, promotional potential I margin Great. event of than a Ollie's thinking if gross a day? could implications the one week

successful is. be the Brad, how baked into think could It on but be our well expectations. it it got we've event I and could it big depending how a number,

I for to think we're okay. It's see to fourth be negative going a expecting quarter. what real overall not from we're

Thanks so good you. Got much and luck.

Thanks Brad.

Thanks Brad.

you. Thank

Stanley. with Morgan the Our of comes line next Simeon question Gutman from

Your now line open. is

short-term of in date, or November you years, earlier? another similar question, for and first in flow My happening other guess early of question. could as changes my can there normal pre-holiday over you about I the is taking you for one past November or of the that shift this see some Thanks you to sort this the few it And quarter sort sell QX, talk guys. far in category a to on as that as ones? end matchup Hey, does there earlier that spend consumer changes October gets coming? was Was anything product just and

No, more We week this I was earlier, year design. by inflicted. mailer as self our had little one year. mentioned was Jay than last actually less think And that October was – ran a

out the much. quarter the of So help that very didn't end

even do folks a piece. I natural, on a little think and were natural we the a slowdown saw QX was there was QX. The from running lighter income lower off bit and the So, money into stimulus running

answer but because that is was year whole ourselves. Thanksgiving. to against started I of November a say last shift had was much October tell prior pretty We hard to [anonymous So there], a year. self would little week induced

from cadence XXXX. impact great of that had XXXX robust we real a XXXX Us XXXX, a had very, and "R" not took very place, there's we the So, to and events the Toys

would would this do. our shifts year historically some So, pretty is I tell But on. what going cadence normal you we to there's

difference acted bit year. deals. break with out bit than is year was only the holiday trying we've little to a Friday experienced frenzy the year later most this importantly, think it it is I last than Friday Black putting But retailers and last a differently year that cold little Black before weather this their did going up and out

back Black after nice as week. far. coming impacted saw results I see in Friday some right away so think bounce We we the a that us,

But And guess paraphrase Okay. regarding no fourth you're reasonable. I what think you've and what make I to, – sounds want sure I it there's quarter, said then I guidance. know

it think started is like range, you things quarter you do it I to at but that expect You the based that on sounds some know, seeing, date strengthen you're of to mid-single-digit, the you fair? said,

tell the fourth would not you, giving for I Well, we're quarter. guidance

very we very, a uncertainty we've what we've – control. you can't recent seen But think so far good. lot trends still I know, that of been have there's

my cannot But that of we're a trends good out said, us recent was I locked that control, So loaded we're and I impact. in told have position. like

that's for as fourth quarter the on I color So, can put about much you.

a inventory, you assume planning may That's it, is you this this if up. that And going fair. to and also it unanswerable know, And magnitude then thinking about you other to how be I'd my or And grow, plans again, to we're XXXX, follow planning expectations. know, are get etcetera around the purchase not but whenever Yeah. you're that? or business, than order less. that if about your right needs like lap], what you to how you can think traditional look plan you to be can you're in what you if finalize you And in retailer be, bit [lap little in a how flexible more that do know, – flexible place, did

Yeah, a most market. in product I flexible probably the would a say retailer perspective, from we're the from procurement

buy, have our flexible open We decisions. to drives the and deal a

it. where go the So, to we on deal depending is,

anybody do So, We the it do. better in what is than marketplace. this we

tell would I So, how you that respond. and we're that's to what for we're going built

have center. We distribution our capacity in holding

the right it on to to margin deal going right. have we're ready So, we'll desirability, And it]. the right once it's and our the sell to profile if and comes customers [collapse right

these but I continue in I that Yeah, that. do there's very we've mean, effectively excited we're year a you know, about year. environment lot first proven, and we well. would you mean, this this and know, quarters I can three of uncertainty, next it operate in

be where going the the you don't to to been real their do. well. you there spending we opportunity right deals on even expect what and complements obviously, carry know, we consumer estate. We know money, they've is departments But on And more know, very

of expect We some continue. to that

Some of those think. will continue we be that trends on

excited we're that. So, yeah, about

it. Good thanks, luck. Appreciate Okay, guys.

Thank you.

Thank you.

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

Your now line is open.

of had the a those Thanks. kept Good you with standpoint, talked about to growth rates? stronger that the John, you pace can speak areas merchandise afternoon. from haven't strength categories

the were In QX, electronics for business. that us us departments, really Rick, were impacted the exiting was which categories weakest the appliance by large

that was that our we a athletic that clothing had, like our of talked knew we because later and we August and ideally categories, all the and was during which that an in impacted clothing department, that to be our already furniture it, than we business The our analyzing then our department garden about patio lawn negative had So, two deal QX. last little us was outdoor would decision. arriving and was sold and a which and next bit XXX% would have our outerwear which

So, quarters performing three were And departments all positive. departments. of lowest said those as our we our four before, were

negative So, that for of departments our performing you. all encapsulates almost

that. categories are know Thanks as target? into would bringing buyers on categories look personnel, curious new if any you're Great. for if we I'm XXXX you what you and adding new they what

next the to fits operate we understand to industry We for a we closeout don't look that We plan very who way specific business The bringing on even category. closeout do we in in. Rick, go for the market. the can few Yeah, year. the the that someone on market. new team culturally buyers look There learn merchants that are

a of do. there's have lot training So, to we

have have So, around you, if we to. we look I capable best of person their available. with the And buy we people for tell and would them will will buying our then move most

for So, a we per looking we're department se. not specific

good continue We trained. are Mark pretty but And out college our to get in minor of job people now. full them up we'll can develop continue fully And hire and say the will build, to the to the they our we're bring doing at like young leagues And very we're staffed in doing right continue come what will them to big that. would departments, so internal currently minor to leagues we're leagues. in a

And good Great. Thanks. luck.

Thanks Rick.

Rick. Thanks

Thank you.

from line Lejuez the question Paul with next Citi. comes Our of

is line Your now open.

then you of fourth about, you? if you of you what Hey, still you thanks, just typically quarter, year's the quarter just would of, I chain back supply some look curious Thanks. you to. that know, later, the in think quantify just earlier, arriving XQ, pressures, at you think whole you from looked And curious the of pressures saw much you you the have in you versus are XQ? know, understand of approximation sales guys. to. what sort prior [how somebody I'm do terms think volume comment November if want I Also made to could, is referring can about of behind to taking] how was on megadeals wanted perspective If go in did, represent you quarter? what front cost you that that how a

us. larger to moves that's store than a more see we're produce be get business, than me mega some just to one large And they're the going Those going we're with into first. are deal about We're believe what and a it And every have going year, at you we that what there's day, Yeah, able time, concept concept deals on the when much to of someone to see going that deals but turn one with do of deal sell. production mega that'd manufacturing the to next item from confusion that's those that'll deal of when few think know to then getting it. that far take the plenty to into sell for there's on I and something background had now. tell if someone's doing to we'd coming. between have sure that be with right history don't handle trying we we're But talked overproduce our they're let deal visibility that coming, nice talked I and created our it, how mega about lot I we that where our going each that's to of that's something could keep and I would excited see. we a Because we're That's not are what a just have not when us it. up those, that so

time it mean, about on XX guys competitive Paul, from DCs get from of standpoint, the I into not is is mean, we to and the bifurcation workload I it's of third front, the impact don't those quarter. the you I velocity going wages. XX basis terms that points, I these and are probably points to granular. basis we're in XX to just you the that doing. had of from, say, We points, know, just, November just pay would supply you in quarter, pressure Jay. get a this the and rates the chain headwinds, basis the increased know, And, both at a know, mean, labor And

on rate we So, the do fourth the And import as the into to quarter. on the bigger the expect there's some is turnover well there. in-bound costs. those trucking, But as continue impact in-bound really

XX]. to slides we're basis you And, that the about work for maybe. that's why, pretty from possible standpoint, from XX get consistent And us going and area is expect basis. we gets [XX.X were standpoint, hard XX there, about know, can but points to maybe by full it's to talked expectation to closer a a the be, that margin an call on on we now a XX% you but one talk had again, the so So, it guidance shoot we not know, to gross we and margin year and

a Which we year. initially guided is started we had actually the to little better than when

Texas, absorbing third Right, we headwinds has that that which includes some to it. because inherently DC in Yeah. know

you month Obviously, a of Paul, we're four quarter. November going not the color on to overall where sales. will me weeks out bit that's of little And XX for to month our but the add let a I the quarter, the tell week of quantify

a to still are our still remaining of the ahead had the business And quarter. of weeks biggest three portion So, be there's us. of lot for

So, we're there's locked to it. us business a lot have. loaded, ready to and And for with of go

Got it. luck. Good you. Thank

Thanks Paul.

Paul. Thanks

you. Thank

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

Your line is now open.

know, Thanks. CapEx some first roughly Jay, question forward look wanted as sense you of units. to next to we needs a XX give just year you quick us the XX, ask Can new you CapEx a us with investment DC, years, you're what kind made you obviously can give a that on but know, in you had, the of of you range couple the level thinking on past of…?

revenue, ballpark. up, be of I runs it I that in in typically would of we're, about mean, you the expect to rolling we're that process know, X% Yeah, but and

pulled have Great. have be you've their know, you kind the you week, XX, to of want setup because you Black e-commerce spent and And the a the you is promotions, know, you at that, risk it, consumers up competitors in shopping do you it biggest kind on to got about done, clean the deals know, having to or minute is you of late the Army you you last of of shopping that timing like point, there know, weeks revisit thinking Friday, that know, that going last, shoppers. the remaining, some specifically chance has and December kind any most Ollie's forward then the three that your the and that that know, the, their beginning, know, of

Yeah, the kind at we around day. Normally Army period. Jeremy is start. we positioned intentionally of right strategy Ollie’s time normally look what just how that's this It's on a day

the the – in all stores retailers is time wait know other They online Ollie’s I to XX% know deal off below it a that pricing off it's get shopper us. of season. knows in latter that or period think it for that going towards [indiscernible], and Christmas. XX% the they're So, part want Army do a toys and shopping them. the we don't at it, too they early the don't to for We do very already those the big get powerful impacted it's they pricing to for because holiday

So, for happen. to normally will wait that they

taking guys. for Thanks Great. Good questions, luck. the

Jeremy. Thanks,

you. Thank

you. Thank

line question comes Edward from with Fargo. Wells next Our of the Kelly

Your line now is open.

afternoon. to you Hi, ask inventory. I guys. about Good wanted

that be, disproportionate You at know, sort responsible pretty us of deals a that Does you low and retailers. been like we feeling market just question are equality deals? you that you focused you I that of And together how wow relative we the returns. is hoping asking about the historically all of that, of sales? tell just sort other take us? on? put Returns we versus I’m sort around know, are the guess And should for a of of this know, you inventory I'm amount to back for is business today? have deals to look of step aspect that quantity

to levels with Yeah, I of do don't think either the our inventory have two. anything one

presentation a levels the you cartons top I your investment desire store. on I as the the inventory that stores in like have When think I our overall shopper better all never our strategic in of reduce shopping have. inventory said gondolas, I experience is the give don't to to earlier

I that tell would So, anything. more strategic you than it's

when strong you, pretty in as get you're long-term built QX, consumer the comp do to done a our a of deals and exciting. of a have box. I the XX X% a think in them our to excite merchants and to algorithm comp I job QX the in wow factor is I'll phenomenal ever. XX mean, tell as of off X%,

want inventory So, really quality the in do. that anyone box. the think lack of is levels trying we're the availability what inventory – I It's of lack to means to a strategically don't any by or

we still turn. to be turn, would impressive. be is phenomenal. a going turn anything five get that or four to to not We're get not three a If to Our looking

be. of to kind want where We’re we

exceptional turn not other us. So to impressive would retailers get for all. And for that's us to a for at be three most very

more of in experience slow the operational a store, bit So, us for the to give tuning shopping just efficiency We're bit doing and fine little little we're still consumer. a hopefully business. a better turn a little

box a top add to And to thing just can't mean, about bit Yeah. the top you is, that. I when shelf. stock the brown that it's sell I a think, the of know, color on little inventory of you in other

we're important So, that people be kind cluttered, They then still the do, now they're out. and that our little And know, a you we've maybe out it probably on to would they the cleaner, actually but feedback little down lighter stand were of deals we've actually the it's have stand cluttered get from sellable customer. when the more. like, deals shelves we those he'd little bit a are gotten much stores as and a mean, as Mark have walk to actually, here, is he I if themselves they that bit not say, present better. bit

all So, we think it's a really across win fronts.

Thank you.

the from Jason BOA. with Haas comes question next of Our line

Your is line open. now

talk an the that about like Can your holidays. much changes? been seems you promotions marketing on digital changes issue talk the prices are than have it around average, about making Great. more Thanks taking Can more your strategy? increasingly specifically but you for my you're know the your in I question. lower competition,

to offering not maybe you're digital improve you're getting I genesis So, that? marketing the that of if pushing digital for credit changing if value And you're wonder is the strategy consumers. into more the

because if your Hey, asking the our discount? Jason, that, more we're done credit there's of by for is getting promotions others? not question So

that toys, I'm things. last We're now promotions. I being of guess kind an about competitors like to just it the a different I up Yeah. less issue. past, issue [Yen]. was XQ I from know, two match in year, potential heard is promotions hearing trying the and One about think with we've in

changing you're up strategy. marketing So, also then and your

I we've checks. So, I'm that curious your and – pricing your if than lower competitors, done know because prices the are

digital your a flyers, rather know, thing, are more lower, just the it that that. to So, just that and out you around maybe not curious, be the I'm I'm there thoughts your curious but than getting that needs messaging maybe you they’re, not, know, you're if deals message it's yeah,

our that, starting the like obviously, print our test And for do we Instagram, that's look-a-like that current to audience reach something is to, more almost we digital audience a gives walk partnerships possibility. that whatnot. is been We Jason, in world. us membership lives. exclusively and and and and larger experiment entire We've Army a that through ability Stitcher Ollie’s to Yeah, were said, a think the Facebook, advertising an with reach ads, of

much to but are we walk something It’s a we’ll to message So, other of that's we've of has little this at our faster experience that outside of us the something XXXX, in very help lot look that a of I marketing think folks start Army. get will done in head not to our XXXX. in bit out arena. starting And

you. Thank

the Our Capital McNamara Markets. next question with from line of comes Brian Berenberg

now Your is open. line

question. Hi, thank you for taking my

where I It curious were your very seemed results is of And expected had August there. in pretty some with though a half. November, really you was you inflicted good, expectations. guys your that a in slowdown even impressed been kind kind slowdown September October saying you of even off, historically. With relative I'm though even to slowdown the have was And where back had guys. First good. but issues then you self the big you like QX landed obviously, November

I'm of last Thank year your you. the internal at to has least curious, report? kind So, how expectations, relative just up shaped your since

what We right disappointed say on were would hit with whatsoever. expected Brian, I not we Yeah, at. were QX, we had to in-line

our one if would have I normally bit of don't had with would And expectations we theory, the mailer out been November, a quarter. could in intra have little probably in it's of more with ahead say October, business. So, week – we report we overall that

we So, of can up make of left, business do hard little a much it's that, ground. there's to heck a still because lot that a so

we're is number we seven, people are the here. in may up business potentially eight of a next setting disappointment. And coming surprise giving we that So, real everybody weeks at for and out the

just So, we with things much it's with be so but the of pandemic, for this, to that to do can't rest the normal uncertainty expect going hard are quarter.

we what can are we So, and have far, us trends to so we we've very the and and for locked you encouraged recent done ready loaded. to but tell are data point I only I you go give are is think

for I quick you that. want on to asked a but a of This before, little just dig follow is Thank kind had deeper up. I it.

in hiring the terms the to small In of of but senior kind in merchant how the the is out it them senior of business to of of kind put you’ve like relative kind merchant long-term? maybe like has it's big leagues. merchants minor seems I'm your up at space, much the just opinion team none of merchant my kind and into the built curious as leaguers team, for been towards know, you put you the the seems that second really kind as building team had least just mentioned thought growing

from that that Well, a the small the us we're we closeouts, I'd I Even to when say out, built we differentiates thing in place plan much you think you most goods, buy folks when last, takes though have color before. you in one Brian, don't were a and where really years, last team team, seven, buying lot do size eight compared you're we've other and buy and you takes planning ladders as have analysis of planet unit do that everyday grant that like and by more you place. retailers type

in buyers what's up react marketplace. Our the to

good. on. just the buy it, much they the buys you're, another know, of don't expert our They you the business goods. of and – the a the They deal with know, never pricing never see you people, goods They folks with and as not you we in buyer view become category them retailer it. move basic necessarily a So, once deal that general your

time own from it store. purchaser] it the leaves the till merchants the the Our [right

perspective. So, we're it's need But for from different there's feel a like help we more we team. need we merchant to bigger, because to model more continue But And that well in that to we have get as more and positioned. it invest the we do.

we the on appropriately. we're will we and more as bring We’re need so. And staffed senior do well currently do in focusing as buyers, to

of Best you. Thank luck.

you. Thank

Thanks, Brian.

further are There for I at this to you. over no the to questions like closing Thank remarks. turn call time. now would back John Swygert

support. happy to continued earnings on for Thank you and you, our a safe our quarter Wish look very results and participation operator. forward you and everyone Thanks with your call. sharing next holiday season fourth

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