Ollie’s Bargain Outlet Holdings Inc. (NASDAQ:OLLI) reported mixed fiscal second-quarter results on Wednesday. The discount retailer also raised its profit outlook but lowered its annual sales forecast.

Following the results, the stock jumped over 7%.

Adjusted earnings reached $1.42 per share, beating the Street estimate of $1.14.

Sales rose 9.1% year over year to $741.31 million. However, the figure missed the consensus estimate of $752.85 million.

Margins Expand On Tariff Refunds

Gross margin expanded by 360 basis points to 43.5%. Lower supply chain costs drove the increase. In addition, tariff refunds under the International Emergency Economic Powers Act added 380 basis points to the quarter’s gross margin.

Ollie’s ended the quarter with $507.1 million in total cash and investments. That included $120.8 million in cash and cash equivalents.

The company spent $84 million to repurchase 1.11 million shares during the quarter. It had $121.5 million remaining under its buyback authorization.

Strong Deal Flow Supports Growth

CEO Eric van der Valk said consumer pressure and increased retail promotions are creating more closeout opportunities. He described deal flow as “extremely strong.”

However, deal availability did not cause the decline in comparable-store sales. Instead, van der Valk cited unfavorable weather, heavy promotions and pressure on consumers.

Management is expanding categories such as protein and energy products, beverages, seasonal décor, living-room furniture and decorative pillows. Ollie’s tests new categories before committing significant inventory or store space.

The company also plans about $15 million in price investments this year. Management could spend more to protect Ollie’s position as a low-price retailer.

Store Growth And Loyalty Program

Ollie’s Army membership rose about 13% year over year to more than 18 million. Loyalty events also generated stronger customer acquisition and engagement despite weather challenges.

Van der Valk said higher-income consumers continue to trade down. Ollie’s is also gaining traction with shoppers ages 35 to 45, partly due to targeted digital marketing.

Meanwhile, the company remains confident in its 2027 store pipeline. Most of next year’s locations have already been identified.

Ollie’s Raises Profit Outlook, Cuts Sales Forecast

Ollie’s now expects fiscal 2026 adjusted earnings of $4.57 to $4.65 per share. Its prior forecast called for $4.45 to $4.55 per share. The analyst estimate stands at $4.47 per share.

However, Ollie’s lowered its sales forecast to between $2.928 billion and $2.941 billion. The company previously expected sales of $2.98 billion to $3 billion. Analysts expect $2.983 billion.

The retailer now projects comparable-store sales growth of zero to 0.5%, down from about 2% previously. It still plans to open 75 stores during the fiscal year ending Jan. 30, 2027.

CFO Robert Helm said the company lowered its second-half sales assumptions to reflect recent trends. Still, van der Valk expressed more confidence in the fourth quarter. He cited Black Friday, Ollie’s Army events and strong holiday deal flow.

During the earnings call, management called 2026 a “weird year,” citing unfavorable weather, elevated fuel prices and aggressive retail promotions.

However, Ollie’s expects those pressures to ease and believes its closeout model can drive a return to more typical comparable sales growth in 2027 and beyond.

OLLI Price Action: Ollie’s Bargain Outlet shares rose 7.22% to $77.56 on Wednesday at the time of publication, according to Benzinga Pro.

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