Ollie's Bargain Outlet (OLLI) 22 Mar 232022 Q4 Earnings call transcript

Welcome to Ollie's Bargain Outlet Conference Call to discuss the financial results for the Fourth Quarter and Full Year 2022. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and interactive instructions will follow at that time. Please be advised that this call is being recorded and the reproduction of this call in whole or in part is not permitted without expressed written authorization of Ollie's.

Joining us on today's call from Ollie's management are John Swygert, President and Chief Executive Officer; and Eric van der Valk, Executive Vice President and Chief Operating Officer; and Rob Helm, Senior Vice President and Chief Financial Officer.

the with over ICR. turn today your now Walther Lyn will conference to call host I Please ahead. go

Thank you. company's Good of Investor quarter issued conference Relations morning, morning that and welcome A this the found release to release press section can covering in a of the and financial be was call. results copy Ollie's the fourth website. company's

Reform and statements, predictions, remind on of differ those this respect contain items be estimates, meaning forward-looking statements should Act remarks expectations could everyone to call considered including performance limited management's including, within actual XXXX. the that to the not materially want mentioned of Litigation I call. but results on with that or Any forward-looking our may from to today's such Securities

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

are believe may of for included measures comparable release. referring non-GAAP Reconciliation today's to financial closely the important certain financial that be be earnings to our GAAP non-GAAP we will to on operating most We assess measures investors in those performance. our financial measures call

call And over with the will that, to John. I turn

store X% in with We the quarter, joining you morning, sales good generated in each a quarter. were environment today. ahead Thank highly of our sales an comparable improvement expectations. the which executed increase fourth as Thanks, we comparable well through during the promotional month We performance moved and Lyn, for of our our call store our reflected and everyone. pleased despite

growth store for drove comparable strong store sales increase our X.X% new quarter. a Our in sales total combined with the

by in as encouraged the our customers are We trends fourth we incredible the deals. responded quarter transaction to experienced

Our strongest candy, experienced such seasonal, bed in and we discretionary some as softness automotive, beauty, were and while food, toys, categories and health and categories bath.

margin Merchandise gross by quarter driven lower during basis improved XX.X% to and XXX challenges was due productivity margin Our shrink. XX.X% to costs promotional to despite ability points uptick chain last to year, flat last transportation the with expenses. increased an improved year. an supply reduced gross compared margin compared and our last navigate increased and markdowns these year to were deliver pleased in We to fourth

income expense On the sales, a bottom by increased in margin, store adjusted control. driven delivered gross XX.X% increase line, and we disciplined net improved comparable

price continues we our to targets. flow maintaining deal in As investing are motivate be gross margin consumers selectively competitive to given the strong, while environment,

the current consumers months. As the strength our business to we to the thrive our past responding tremendous environment We our money, seen are and and acceleration believe are resonating in in the over in is our have of we value proposition stores. need few an well-positioned to values customers save

Our the us. deal about of robust excited and ahead are pipeline opportunities is we

particularly and our deals in terms impactful. of be brand communication we opportunities on marketing, greater and clear In focused of developing see strengthen are awareness, markets, to to newer more

and and drive between elevate the optimize media We print digital traffic. balance work continue our messaging to to to

our going make pleased with influencer marketing We part and program of our this are forward. of mix results the we'll

an were X.X% prior quarter. with pleased sales most Army the active in members. XX.X Night, the continues The over we for our to Ollie's event remains of offer year, grew discounts to the over million and loyal period exclusive Army deals customers. steadily our Army where and a key almost XX% driver We accounting grow of sales, fourth with our Ollie's ending

shoppers used non-Ollie's build database of comprised is which initiatives. We being civilian for continue other email, our to Army digital messaging marketing and

remain compelling growing suppliers. focused our have long three different are market operating customers one chain challenges flow deals, seen to model With strategic base. disruptions on margins, The We last robust time. expanding I the pillars: review and and growing seeing our opportunities of have for offering year's many environments turn operating are in to the extremely and in expanding our store remains discuss today strong. and to we business led will then Eric margins call confident from The over closeout the our market a deal in base. most our the supply closeout we store incredible

preferred us the on in Our best makes brands the of relationships longstanding some market. call deals the first for the vendor best

out each vendors New us we easy to are are of reaching every how day because and our to and with. scale work

for our customers. have with the get merchant We to an experienced deals the team best know-how

the on and offerings, which of to stores. urgency to We drives newness sense product more a are adding sizzle and our focused shoppers creates

the and our we While buys, strong facing we in are pressures margins and of selective in opportunities incredibly excited today our about to cheap our customers which believe both we and stuff to are recognize position consumers will to front us good will shareholders. the us, deliver, remain disciplined

to to going strategic pillars. Eric? discuss turn over the Eric now the to call I'm other

good morning, everyone. and Thanks, John,

expand to increasing expense in maintaining discipline. our over the and Our strong growth operating supply back of through margins there retaining know ahead by made scale, a expand have see in the more is while pillar is clear of XXXX, management margin, made this half time operating we progress We leverage path great but us. chain leveraging We enhancements margins. toward work second merchandise in to fiscal strategic goal gains

procurement ease. seeing continue freight in will benefit us import to to approach the are we Our costs and market continue to transportation

year. XXX the is priority ending quarter compared grow last the in third our with in stores stores opened We base. stores five states Our XXX to XX year store fourth to

below due to times in annually, stores lead to planning longer we have permitting open XX construction and XX the are our slightly stores to target for We XX fiscal experienced. of XXXX stores long-term

stores open our confident However, plan remain our returning normal we fiscal and on X,XXX for store in ability to cadence least XXXX. opening at to

improve experience of existing last first our as such store adding category checkout and customer shopping pleased results changes our are updating testing flow began lines, with a in tracks, the store and program stores. race queues. We year remodel layouts stores, XX To the our we and we to made improving sight

continue initial stores remodel to Our this XXXX. to to and program in additional stores to we the XX us an fiscal give expand plan results confidence XX

network the soon open fiscal the the on fourth have center store quarter XXX of Illinois, growth. position we quarter the supply support investments underway XXXX. We We to be the we distribution and our investments are center will are our ground believe The consistent benefiting our over will our growth. additional second is we to distribution When expect deliver us are making we from to will Pennsylvania plan that in chain continue stores. second expect XXXX. expansion completed enhancements the support made capacity to We to have of we break and make well of completed, in it to expansions by long-term we which to to

I'd teammates customers. and associates hard Rob, to a for over experience making Ollie's to for both to work almost commitment and like their it special hand I thank Before our XX,XXX our

for XXXX fiscal through take now in financial you Rob? outlook and results our will detail. our more Rob

start XXXX. going everyone. of then review morning, our performance, fiscal guidance good and fourth I'm I'll Eric, a quarter Thanks, to with provide our for

the increase X.X% Starting by sales with the increase compared year, quarter fourth of totaled strong million, sales $XXX to in quarter, an primarily our from expectations. deliver an year. pleased store prior Net in are we transactions. Comparable last results driven X% to above increased the

XX X.X% while stores in we in count increase we During with five and year-over-year, early, quarter, the opened quarter pleased states stores are the these the new ending and new stores. with store performance XXX in

closed we've of year Gross we margins to opened Since an to store location. to additional an shrink XXX did improved to one and supply basis the quarter. QX highly the last in the QX end lower experience were in eight XX.X% year points stores Merchandise promotional uptick quarter, to margin compared chain due for Similar profit the flat retailers, XX.X% costs. other environment. last during despite fourth

by $X.XX compared XX% and offset higher per $XX last sales adjusted expenses. partially points year. $X.XX growth, to increased XX.X% compared at Operating an to the totaled percentage flat XX.X%. XX.X%, of income the $XX for basis XX new Adjusted to driven a as unit EBITDA net million by XX.X% million to was quarter, increased last for year store basis were EBITDA chain margin XX.X% net quarter. adjusted supply income increased points Operating increased year. and expenses SG&A to to and increase to the $XX share last million selling XX earnings lower of margin costs Adjusted

Turning to balance the sheet.

and at year-end. strong short-term a facility sheet cash [Technical balance $XXX outstanding million compared remained the credit million year with between hand investments Our no and on quarter borrowings with $XXX cash ago. position to $XXX our on X% million revolving in Difficulty] Inventory

million. to XX% in-transit entering in of our of with these lead of lower normalization represented line for are our the inventory and starting We and expectations. $XX items, see are pleased our costs inventory total our the Adjusting approximately in benefits position combined freight a XXXX inventory, increased remaining times with which

in center. totaled $X the existing Pennsylvania This year. primarily of stores distribution $XX and expenditures million the with expansion new and for Capital the prior million compares

repurchase balancing investors to of our growth to program to during our During stock. our have the remaining repurchases, the repurchase invested our returning opportunities working share quarter strategic capital We million and repurchased on common million shares while and $XX million $XXX remain needs. $XX committed we share We capital through year authorization.

outlook Turning fiscal XXXX. for to our

margin more growth, current of planning XX to of our that our full X% compensation. net which benefits comp of to million; in with $X.XX, related are we $XXX target place, week, X%; and we trends to unit tax of XX.X%; With operating in new closure; XXrd in our XX.X% with of business we total believe the billion; million opening of for confident annual which $X.XXX billion stores, framework $XXX expect to of excess to of stock-based stores. sales the $X.XXX comp $XXX the our million; X% a coupled we range per store includes that $X.XX X% to and $XXX new to net sales exclude to sales income one are less of well-positioned, both adjusted momentum line long-term and store XX are million gross While income growth the earnings in year, share of adjusted

An weighted $XX annual shares of and compensation effective average benefits million. diluted related to stock-based excludes outstanding which XX% rate tax tax of the approximately

will million $XXX fourth Pennsylvania our distribution the of for expenditures $XX stores, center million year remodels center. maintenance the projects. for the The IT remaining construction distribution We million $XX of and investments, for with capital, approximately of are corporate and and be planning our capital range in expansion new store existing marked general

on course to wanted quarterly a the about thinking some during to year. the additional also of take color how moment I flow we're the give

As annual end of QX positive mentioned business we expect right comps the to at I high range. we and earlier, momentum in seeing our are now deliver our guidance

Moving ahead the of annual to comps our midpoint to planning are QX, range. we guidance

be flyer to in change QX, QX sales For to strategic QX. due anticipate last flat we year and timing comp between to a

we a As above comps our slightly high expect of to result, range. end the QX annual would guidance be

million. the of year the weighted of back Approximately preopening the XX% will be in will $XX store half. expect the first be of We and openings [indiscernible] this second XXXX. our to be year to new XX% openings in our of approximately half half more is expenses

XXXX. for the gross of impact first a we're half perspective, elevated as supply the a margin From in lap we the chain in significant year improvement costs the planning of

supply year-over-year to we costs back normalized As anniversary deliver chain margin in half expansion. the to we begin modest of more year, the expect

of We $XX runs be net $X million expense we in anticipate and approximately range that expect cost amortization and goods sold million to of interest million. income $X depreciation including approximately through the

call I remarks. to will over now turn John the for closing his

work team day. entire hard and each In closing, thank like the their Ollie's and incredible for I'd every dedication to

stores to first to the positioned current good our momentum We on forward deliver call. good on from for about to flow, in are and updating look trends you control, expense customers. ever as progress new We to deal very today stuff growth quarter are and well our feel business to positioned the our and cheap we

say, we are we As Ollie's.

will now questions. your We Operator? take

comes from first from Peter of Sandler. Piper Our question Instructions] Keith the [Operator line

Your please. question

Hey, good everyone. morning,

proposition value resonate is you John, that your So, had to mentioned with customers. starting really your

now maybe back across on value better XXXX, proposition XXXX that retail bit a shine? the you If we're time the diluted that disappointing. seem comps environment cleared has did to it look you Do markdown pivoting and think the value little like and your that proposition a were the

that's think definitely it. Peter, part of I

of inflation habits. about would I when the think and take when timing I [indiscernible] hold their start before, talked the changing people the

the the deals are occurring last responding the year, are and promotional retailers I definitely being right But prop. plus think, value between have inflation -- the timing impacted that are how them now. of to great. People we other

set So we and and said, to we're out was we're play us -- up it's think excited shine as I think we going XXXX for that way. to

great. And Okay, fiscal just had another question stimulus. on and puts around various I just the takes

traffic call it, recipients, might how for which puts and cuts. increase So sales those impacting security there's been Any takes trends? is pretty observation social a big, your be or snap on

it's Eric. Peter,

age from our what income be also XX-- customers and XX up. that safe the that adjustment seeing terms in growth could shop. means are it that social customer mature could base security influences the at benefits each in depending to discretionary and coming are We to terms Potential is on of customers older more more feeling be of for segment strongest

the to that So And years. two then frequently with we're and refunds that's determined. engage the mean they have we're what over sure group customer us tax to last may more than not be seeing

not We -- Eric not We benefits, definitely, there, don't customers. but say, as the our stores. in I our other And obviously really have Yeah. something don't Peter, That's we're really thing one EBT. well take destination. low-income core perishables a SNAP there's

real impact big would us some there, pause. that So get not there's any material anything obviously but

Okay.

you good Thank and luck. good. Sounds

Thanks, Peter.

you. One our Gordon line for from of Thank Eric next comes the Cohen Haskett. next our And question. question from moment

please. question, Your

Hi, thanks, and great quarter.

You is doing different strong there consistently, sounds how to the for talking business pretty been guys comp you've about strong, about it X% the the today? environment just given have X% X%, like still closeout growing anything were really a typically guys talked structurally and strong or quarters really several pre-pandemic it's and is now, so X% environment you conservatism about

even Yes, -- X% build and Eric the We've build out for a the infrastructure comp no I to X% is or X% to always There with X% the we comp we off a need of disappoint there uncertainty models. the time pandemic, us X% street. in comp. our then lot that all we the There's X% still. before think, the plan obviously, plan the to said

that's the thing So for prudent us to be manage we cautious the is business. and to do how

drive much are going not off. turn to if As into But we're registers profit the bottom to going we deliver for we shareholders. always come, say, the to customers them to more line the go store and the

So and we're the sales will the deliver to if earnings to that's planning stronger, are the do shareholders. what we

guys hear remodel to the store [Technical great it's And you Good. now are Difficulty] exploring

would the comp sales, on store Result which get of call standpoint, believe is two ROI commit we is, we in kind like line do indication or the to one do new return with in years. to initial results a more positive not to specific of it, the But ready less we lift. a

lot. a Thanks Great.

Thanks, Eric.

for question question. Thank Hamblin our next comes next the line moment from Jeremy you. Craig-Hallum. of our And from One

Your question, please.

and on I the Thanks, to with distribution wanted and of results. start momentum the impact the congratulations centers. strong

miles from so, benefit going reduced forth, of the that? get might but be and what those then to back this, end type get In the wanted of a you to think you to sense, potential of noted and potential locations or both we Eric, of margin out in that also, you results might what years, in terms impact sense you in getting XXX drag a on be for XXXX potential get so and the support it's the allow but when to margins, impact XXXX or stem

the stores building answer the forward capacity very been and we beyond, the could in the piece, support Illinois Rob once of these XXXX. is more our XXXX little overall XXX of I'll growth terms a in terms have will believe and the bit what Sure. of probably do of conservative in of We piece of all take with question opening operational that made. and positioned the investments in business for well going especially financial Jeremy. in we're throughput

financial So, I'll the to question Rob. leave

York, margins time. would have existing to no in XXXX to Illinois the a building dilution because our already for Princeton, basis that drag on From have, Pennsylvania say, we're it's half XXXX perspective point this margins that The in. we an really at building year, XX point basis expansion, XX gross second

there that is thinking then of -- a support store-based, transportation terms of expecting? And was you cost you we benefit it in once Okay. kind what what get are in of the long-term those reduced to

we of kind that up volume our is distribution and, need give all of by half centers that in the to stores, including that we but and impact the service the Obviously, offset freight a you that's walls it, open through strict basis points in there it's the a the four points obviously, order we back call obviously, boxes the the blended built. that probably, net and just to freight that's of is on basically Jeremy, XX the net-net, basis savings, margin cost to there. XX to comes it's four that's incremental impact savings

longer I to So right? just there is of then we store know both materials it. is on a so permitting forth. terms the Understood. and that Got lead ask there -- openings, construction times in still question some here And wanted

-- in the of potential In terms about to targeted are XX here a back of March get in that range XX to XXXX, XXXX? how of sitting you thinking to

good for aware, filings, struggling very one usually good some as XXXX. confident model available, going if it's takes XXXX. stress retail, two and we're us. good in feeling think become in for very, that which for from retailers market on you and all sites are the sense some bankruptcy sites our the real make for years disruption commercial even to a other setup second standpoint. We're XXXX very some There for or Jeremy. one two them setup become that Eric, the very are makes generation financial typically We XXXX very to estate years out call real We It that available -- is about estate projected is

level space Your a settles from will kind deliver to as and extent easing easier as front. but on given think make good construction us the it in mine building as more that construction permitting guess to standpoint, in and to slowdown will in. like macro that We'd what for is that tell it of time

thing One and Yes. to with help a the get visit little Jeremy, the opening as opportunities. fourth folks to level add, real that additional states does go one of thing DC gives us the our estate well for potential more us comfort

plus with a stronger opportunity backfills, that little it So the makes bit there.

Thanks great. color, for Okay, the guys.

Thank you.

Thanks, Jeremy.

line Thank moment question from our And Bradley One of next you. the comes question. Thomas our for from KeyBanc. next

please. question, Your

Hi, nice promotional first headwinds backdrop retailers good and morning. gross and a margin. Obviously, environment. a mixed for the outlook end with about question more for dealing a year. Thanks just for I to many taking some my to ask wanted the

we so, just to talked of looks of about it kind of And a year, the the range year. as the building expansion for year? I maybe the margin you was above of through And in hoping about then, the the the first be shape way half you guidance you've timing the blocks think given like full-year need more about could this the kind little talk gross the

here Thanks. any more looking this on for think color how to because such just of it's about increase you're the So big timing year? this a improvement

flow overall to piece the you to the rest merchandise hand the over Yeah, the Brad, take I'll margin, and margin was strong. take merchandise obviously, deal Rob But through. I'll

out XX.X% off help that very just chain Our very that's a XX.X% we merch last the we're there's the year. real and projecting coming were that's don't opportunities side what on believe merchants will we and of that feel that margins the for we at to year, being there the us -- we we're the on this it's full achievable with front big costs year where to offset stretch chain supply supply are see selective and projecting

on piece margin. So I'll supply chain kick the the let overall Rob in and

for supply was we get a say, impact points From improvement half, that's perspective, XXX XXX pretty say, which year and of and for planning QX considerable points to our first That chain When for roughly, for are roughly the XX.X%. lap the how pretty year totals, basis guidance we last QX. improvement. we much XXX of basis in impact margin is the to XX.X% points gross basis

Got you.

Okay. the on follow-up a believe X%. I commentary I coming is that you if high first your be end range, got comps of quarter, said which about full-year that the at the And if just should

XQ comps I accelerated think that thus far you had be above X%. in could also said that

the to range given rectify think be we Any far? So you better just than momentum a so bit perhaps that trying those reason the X% comments. something have two rather you in might

just just Brad, and conservatism just today. tell is it's I you [Multiple would real -- direct we're Speakers] at where

Wonderful. the detail. Appreciate all

Yes, thank you.

Great.

of One our our Haas America. Bank next moment question. of for you. And line the next comes Thank from question Jason from

Your question, please.

Hey, my Thanks it's for Jason questions. Haas. taking

a one gross I had margin. quick So, on

I in think came XQ, light. it bit little a for

so maybe was XX that bps was your guidance. driven think Did versus see what you what by implied by? I or

heavily a which you uptick are It as perspective, has environment From came in performance. of widely gross was also reported. pleased Markdowns as shrink, promotional our there the all take fourth aware. with been quarter in as well was we're margin a an higher

higher And that have productivity. driving store year, That's XXrd be week, anything imply is I at higher store new would it. seems little the a as the know then, Got difficult productivity there it look I tell new this just upcoming because, to you for helpful. It's to year? but the guidance

store guidance couple back improvement the and improvement We've recovery historical over and our of get steady trend to the new last the of a with So new a the seen implies continued COVID whatnot. lockdowns little has productivity years store to volatile been levels. productivity and

a to create that. it, week week, elevated store Yes, a not the almost Jason. head little than any -- XXrd The XXrd normal back more The look one really the levels bit does thing, though. of for new of when are They're adjust you little at confusion when historical. bit productivity you

Have it. XXrd -- Got sales much that you what modeled should contribute? week how out

Yeah, I of, it's volume in it $XX the low say, a relatively call would weight. range million.

Thank right. you. All Okay.

Jason. Thanks,

One Sachs. question. McShane from next Kate next for Goldman the you. our moment our Thank comes of question And from line

please. Your question

our Hi, customers and in you know certain fixed taking that regards some down of had customers? if Ollie, to on I we maybe the if with And so, change entire wondered shop thanks seeing mentioned earlier question. store for across from trading strength seen in that income more it any trend you're but the some you focused categories? is the higher income

stabilized, not seeing categories consumer a now Hi, -- -- quarters. Kate, periods. down, We're to we several look gravitating QX continue QX, flat to the to. effect you fixed we higher out are it's several Yes, have to at Eric. similar We historical is least quarters, to which you consumer been closer trend the QX over don't income seeing able to we tell versus the seeing be pretty for where trade that's they're tell data seeing consumer last stabilize the were and fixed at income a hand rate really are you it now to at income actually for the trade when begin to

answer that So not question. to able

place How you still services? of are is guidance, shifting might of question the wallet second just thoughts said X% incorporating being to the take conservative. regards comp you during of XXXX to again, And X%, share that the with Okay. is from to goods any which our

the and consumer the secure Yes, come the in of different retailers. being and don't closeout bit customers Kate. motivate it's deal look little model, deals the at to than really the for That We our at flow look to able wallet. the store to a the We shop. shifting we're most

to of of the offering to indication deal strength of us needing our So coming the confidence us them. and and the what customers flow gives kind we're

Thank you.

you. Thank

question. the Edward Thank next One Wells question moment our of Fargo. you. from Kelly our line comes for next And from

please. question Your

Yeah. Hi guys. Good morning.

Ed. morning, Good

just the a start to on on guess, follow-up, wanted margin. just I I gross

I think got year, on a a You about really I of of lot in coming XXXX more well. but last some think you hit you talked for bit contracted improvement you half have Like QX the the I of freight as modest you got, decent should and in in year. spot back thought

So why more a bit maybe color back more you maybe see improvement? just on half gross a little wouldn't margin and bit

as John, and holding the number, then is fall like XXXX about there possible you XX% back in your something what's you getting from think way? it that's And things

is supply Ed. answer and still we're costs levels that mix Rob freight deal if -- they continues our with question embedded can mix. any still product are today, some a that by said, holding last Is cost the the back, means. but what's possibility, robust But with margin at selling question. rate. the us still rest change we shift elevated Yeah, numbers, the of a not be There but I'll with to possible to it first flow take as lower as we're chain is consumable it that a having and have back dealing there in higher pre-COVID is

came do prudent the XX% than gross to definitely back we're margin a pretty have we that, is XX.X% margin the year, and think that do off improvement, do it XX.X% in great of to good of with to if to I but can getting last going So better do thing chance I a better we think XXXX.

to to and that half, have expect in going John's wanted happen our supply continues remain than will XX% should of Yeah. better the sales. that, of our in a We the what's we but transportation we the transportation of back ease don't point cost chain to and terms we do range To would in guidance. with market, averaged conservative ball on crystal

more Okay. And just on labor. one for quick one then you

across a We in are lot of investment seeing retail. labor

the I side, on you -- how you average If lower but your know your feel probably don't wage, about that. at it's I look think hourly

thoughts wage invest hours, rates, labor on to Just any all? need there at

Yeah. take question. Eric. I'll is This the

It's really ensuring the stores. continue experience point. do We attract wage market this it's pretty wages. to pressure we invest. by significantly flow Cash pretty some last in two and we're invested at is years We we retain reacting market, and talent to our that to have decent in over continue

So we're distribution good stores both feeling across about centers. and pretty that

to continue we stable. invest that ensure we So [indiscernible] to have our pretty

Okay, thank you.

Thanks, Ed.

Thanks, Ed.

the Thank comes from for of moment Carden you. question. And next next question our UBS. Mark One line from our

please. question Your

Thanks taking much so question. morning. Good the for

So do lifts unusual these? expect challenges the you to still think that for biggest the your mostly passed emerged Would at flow, solid just point? normalized it's competitors to from you At Or noted stage, that some faced? deal few wins strong overall. is through on have of deal this you it related that a type start you flow more more this of quarters

I are Mark, tell are worked it's think there large still two pretty pockets the hard that, momentum that business. quarters now, going my buys the strong everyone, is out continue -- another for, tell merchants you and of through. I that's guess. going right think feeling. all very haven't but time, deal deals flow out deal to some extremely help But still it's There's there, people that flow pretty do always to can don't selective would know, I to the but And I I the being is, the us and it's drive to the try is merchants we their explain strong with

great. then follow-up. just And Okay, a quick

between about existing and the your As how the you balance are openings in year ahead, thinking markets think about you new markets? new store

for penetrated. markets is are difficult, that under much new we a lot us little of have and states defining existing very, very It's because markets a Yes.

for be markets XX% we look existing. is view XX%, still is XX%, probably at and So as considered XX% XX% I'd But tell would those you, it, when -- new us. newer we

and good so Great. much luck. Thanks

Mark. you, Thank

for from our of from moment our next Gutman Simeon the question. One question Morgan you. comes next Thank And Stanley. line

please. question Your

everyone. Good morning,

two follow-up part a First, a gross question. margins. It's to

promotions? year to lift is, So there's part how were maybe Is the the chain could like so that level And mentioned the promotions. bridge about this of it's of you promotions there half comp estimate back of question is there we in a business that higher help know connected you're XXXX, next you think fourth think modeling it to fewer when sounds the I a similar supply mostly that quarter. embedding then the and

Rob. I can it's question, do that

investment of in to continue moments think about is base all Essentially, saw that it's we the the the From we we chain and when gross to midpoint used our expenses. leverage expense half perspective, ago, leverage increased X% costs margin to the couple made to our supply the the a of correct. that on of You're second with closer expansion to our to first comps, part of gain we in relative XXXX. X%, X% right that easing -- referenced in Eric probably wages

are then you're you're product talking And categories robust that unrelated that there are deeper seeing were The closeouts to? over Is Okay. for follow-up, (ph) the the discounts environment. closeout coming now Is year, the about that [complexity] different responding there -- responding next excited the and of they're some in? felt consumed categories. of Are It changing? some like changing? that that

get seeing from through -- marketplace out not purposes, would clothing, still I'm HBA, the competitive housewares, I wide variation going in opportunities bit, auto, of lawn say, pretty and details there's flooring, to a there's a closeout for garden, little real lot big it's but a but we're there. still changing Simeon,

And They're So drivers non-consumable seen, they to see things one stores, definitely quarter, one we've penetrated the one when food, the we're buying the also called consumables. seeing get take hold. people the think which that, nature. in pieces of add-on the are in HBA seeing other consumables But out we're obviously, as of the candy, area. I in we when not bigger

deals them. resonate see to much they once So the we're boxes how into giving and the value get

So our out what's in selective the there today. being stronger, finding that's marketplace are in merchants getting really and

John. Thanks,

Thanks, Simeon.

question. line question the from of our Thank JPMorgan. Boss next next Matthew And you. comes from our moment for One

please. question Your

Great, thanks.

of So guide, some maybe look some shopping I elaborate you could you're a Is there customer? seeing it talked multiyear about different financial John, implies for And so to your of the know you've pressure on market to the stack and pre-pandemic points crisis? maybe today. patterns a stock back geometric that stack then trying the core it correlation this the of to triangulate from we year's algorithm? do think to on How that trend then, year. about comp X% of applying Eric,

the terms And too in that, and how give QX, offerings won't shopping delivered buying then from our comp confidence in see deep many that -- we're on the not data I they're patterns, it. get seeing we're they're think we with than are too the other out with impact what Matt, to Yeah, going the with into but coming a to good the of -- in regards we're now, QX. we're I perspective. you right with seeing a as can details overall resonating consumers But consumable

it From year. business year this perspective, what is a a about time [indiscernible] Rob. different stack the in last it's And we've from geometric business, talked The Hi. three XXXX. was

to point not we're We in three see forward. a really small of from though speak this QX did acceleration QX a it going terms So geo. from year to to

maybe And expense then just Great. on the front.

thinking right comp to then rate and think how leverage the from the SG&A growth And -- forward, right What's what's XXXX SG&A? right For about model the what's here? XX-handle needed best in level the to of the level multiyear pre-pandemic?

-- Matt, XX.X% like think XX.X% we're incurred comp left sales XXXX has Yeah, I us, call, year, I costs front. with think pandemic, this drive changed. I on I below let’s store through we're we're SG&A increased XX-handle the down think, a the that lever has -- don't to structure overall today. obviously, We that additional need to where since, at the for we’ve

but lever bps comp I able annualized we that. to So an X% not might more on we if -- XX be much we XX than can basis, think to bps do

is experiencing, to wage the to we're we're pressure We offset pursuing just this list that this wage pressure. improvements the of especially would will help add a in in pursue continue of do initiatives we have some I still offset Eric. some stores. business Matt, that that of Yeah, to productivity

Great. luck. of Best

Matt. Thanks,

Thanks.

for our Ciccarelli moment Truist. our of from One you. Thank next question Scot the question. comes from And next line

Your question, please.

moment. your for Scott, question. our mute. hearing All have at you moment We'll not phone One might we're right. on next move on. this You

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

question, Your please.

by could Hi, everyone. This your versus and is sounds puts be pressure. I for might takes, margin you're mix? outlook Brandon Cheatham It investing on of for wondering in Paul. there I was what was what year. some out break the of little wondering share be might if like you a bit if driven the you merchandise on like price could

is merch flat Brandon, overall Rob there's said. had no Yes, -- year-over-year basically margin the as

no we'll I takes. really puts there's sitting at. We're to and that. think deliver So able comfortable be with where And we're

much should up end Got I freight those the XXXX benefit Just at out of or to look quantify costs, normalize the completely to this levels? year be to a freight compared get you. could for could to are sense wondering, pre-pandemic. you your year, was And get when you you if the XXXX of how trying what just in

said earlier supply came-in XXXX range in that full the our for think a costs in year I chain I basis on the of call XX%.

guide that X% is And range the XX%. of in pre-pandemic. more cost range of calls in Our XXXX past we've to said the supply X% chain on range

investments that's relative relative you wage So the got gap that we have would that a in DC, the gives levels. be? to small just referenced. improvement What pre-pandemic deleverage minor back we all a portion to quantification a way I if the that to There's relatively but the

it. Got

new you potentially And the that That could DC, one quicker? from that to sense. you change allow product your approach Does me. does in that various Last at get purchase closeouts season? might points Okay. stores how to you makes the

the DC matter to DC, DC standpoint some it's friendly stores Illinois. between a it's that to are from of of difference mean, new I No, new Brandon, and really, a our the an Eric. geographic existing hours

of to So our make the the difference to customer. a any hour six XX versus doesn't hour deliver really drive a of in ability units terms difference drive

the able like goods DC? I that accept into improve that just if curious Yeah. might being throughput was to dramatically there was technology different of you

on Yes, question. different the spin Sure. little a

the We semi us XX options looking equipment XX automation, all we're terms handling available automation making that to over in of that of now to days the are next of in selection process at days. or that material are our the

more on been considering investment what reduce good for reliance from looking to it's we're thing at standpoint our general So spend especially and is human several were also years. if capital we to it a the but over a last on in risk financial the is automation, the a retailers, on return

So we considering. are

overall Again, to come would not going a through first know in about But that more standpoint. matter would make our difference top question, to just be to throughput of down hours and business it it It's connect I moving products to about any that and store. your productivity line it's DC to from days. faster a don't that a

don't different those I So investments making top see line. a

to grow -- out and and we're able reduce the to is stem miles really be stores basically, driving Paul, be to able Yeah. DC built apart expansion to them. further to service further be continue able the and

Got it.

Appreciate Okay. guys. it. Good luck

Brandon. Thanks,

you. Thank One moment.

Ciccarelli Scot Truist. from question a have We from

not is mute still sure line We're have button. hearing open. Your now I'm if not you. a you

This morning. for good on Scot Hey, is [Josh] in Ciccarelli. calling (ph)

consumables, With the your there demand shifting to the consumers? to any in from strength have plans expand guys you offering are trends seeing meet do you

consumable offerings in plans don't any stores. Josh, Hi expand to we have the

We faster have as range it, it. with are is that. We -- But continuing really levels we're pretty in consumable plans to the there's the, turn our XX% and and keep stick continue to faster going buying, buying turn and that to keep model the they're call simple. what refill they inventory we to

Josh. Yeah,

that emphasize we're the not to inventory The point, stores expanding footprint Just just faster. either. turns

Yeah.

one on Army then seeing members Are non-members? about the behavior any for And Ollie's initiatives And there you help Army. helpful. shifts other to guys any thinking in memberships? are new drive that's one versus you're Okay, notable XXXX among

QX the previous Josh, behaviors seeing, to pretty similar quarters. consumers in We're versus the of be

and continuing transaction strength the non-Ollie's So the significance Army general, customer. the Army, of ways civilians both sales them customer we're reach delivering what Ollie's to of with the pursue consumers, our versus Army them convert to terms and Ollie's to able happy we're identify, of people Ollie's of the Army. Army stimulate of in strength over report XX% Army with to the those of were the doing the with very in in to Nothing we're to that our out

we So Army. into are on continuing to customers focused and definitely convert acquire the

Yeah.

guys. Thanks, color. helpful Okay,

Thank you.

Thanks, Josh.

back program further hand the of question-and-answer This to Swygert program. conclude session I'd for John today's Thank to remarks. you. like does any the

your We great look Ollie's. quarter. you updating next you to a day. Thank support our for on of results Have forward

you, This today's gentlemen, in participation conference. the program. your conclude Thank ladies for and does

now Good You disconnect. may day.