Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) stock rose 3.98% (As on March 13, 11:24:39 AM UTC-4, Source: Google Finance) after the company posted better than expected sales estimates for the fourth quarter of FY25. Ollie’s Army loyalty members increased 12.1% to 17.0 million members. Comparable store sales increased 3.6%, driven by an increase in basket and transactions. Seasonal, consumables, hardware, stationery, and sporting goods were the top performing categories in the quarter. Gross margin of 39.9% was ahead of plan and the year-over-year decrease of 80 basis points was primarily from planned investments in price. Adjusted net income increased 16.4% to $85.4 million and adjusted net income per diluted share increased 16.8% to $1.39. Total cash and investments increased 31.3%, or $134.1 million, to $562.8 million. This included cash and cash equivalents of $259.7 million, short-term investments of $36.6 million, and long-term investments of $266.5 million. The company opened a record 86 stores for the fiscal year and ended the period with 645 stores in 34 states, an increase of 15.4%. Ollie’s is testing expanded furniture assortments in over half of its stores to capture market share left by consolidating competitors like Big Lots and American Freight.

OLLI in the fourth quarter of FY25 has reported the adjusted earnings per share of $1.39, which is inline with the analysts’ estimates for the adjusted earnings per share of $1.39, according to analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 17 percent to $779.3 million in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $783.5 million.

For fiscal 2026, the company said it expects adjusted net income of $4.40 to $4.50 per diluted share. Analysts polled by FactSet expect $4.48. Full-year net sales are projected at $2.99 billion to $3.01 billion. Analysts polled by FactSet expect $3.0 billion.

In addition, the company introduced a new long-term growth algorithm targeting 10% unit growth, 2% comparable store sales growth, and a sustainable 40.5% gross margin. Management plans to open 75 new stores in 2026, focusing on contiguous expansion into new markets including New Mexico. A commitment has been made to return approximately 50% of free cash flow to shareholders through a stepped-up share repurchase program, starting with $100 million in 2026. Capital expenditure for 2026 is projected between $103 million and $113 million, including significant investments in expanding Texas and Illinois distribution centers.