Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) stock fell 5.25% (As on December 7, 11:20:36 AM UTC-4, Source: Google Finance) though the company posted better than expected results for the third quarter of FY 23. Comparable store sales increased 7.0% from the prior year increase of 1.9%. The Company opened 23 new stores, ending the quarter with 505 stores in 30 states, a year-over-year increase in store count of 9.1%. Operating income increased 32.3% to $39.1 million and operating margin increased 100 basis points to 8.1%. Adjusted net income increased 37.4% to $31.6 million, as compared with prior year adjusted net income of $23.0 million. Adjusted EBITDA increased 29.5% to $51.1 million and adjusted EBITDA margin increased 120 basis points to 10.6%.

Further, the Company’s cash and cash equivalents and short-term investments were $264.0 million as of the end of the third quarter of fiscal 2023 compared with cash and cash equivalents of $182.1 million as of the end of the third quarter of fiscal 2022. The Company had no borrowings outstanding under its $100 million revolving credit facility and $91.8 million of availability under the facility as of the end of the third quarter of fiscal 2023. The Company ended the period with total borrowings, consisting solely of finance lease obligations, of $1.5 million as of the end of the third quarter of fiscal 2023. Inventories as of the end of the third quarter of fiscal 2023 increased 1.7% to $532.4 million compared with $523.7 million as of the end of the third quarter of fiscal 2022.

OLLI in the third quarter of FY 23 has reported the adjusted earnings per share of 51 cents, beating the analysts’ estimates for the adjusted earnings per share of 45 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 14.8 percent to $480.1 million in the third quarter of FY 23, beating the analysts’ estimates for revenue of $470.9 million. Gross profit increased 17.9% to $194.1 million in the third quarter of fiscal 2023 from $164.7 million in the third quarter of fiscal 2022. Gross margin increased 100 basis points to 40.4% in the third quarter of fiscal 2023 from 39.4% in the third quarter of fiscal 2022. The increase in gross margin was primarily due to favorable supply chain costs partially offset by lower merchandise margins related to shrink and merchandise mix.

Ollie’s Bargain Outlet expects full-year earnings to be in the range of $2.77 to $2.83 per share, with revenue expected to be $2.1 billion.