OLLI 10-K & 10-Q changes, risk factors and insider trading

Our ability to timely and effectively deliver merchandise to our stores relies in part on shipping and transportation partners to timely and safely move our merchandise from manufacturing facilities to ports and then onto oceangoing carriers. The demand for space onboard oceangoing vessels can vary and costs to secure space can vary greatly. We may be subject to higher transportation costs or be unable to secure space for containers on economically reasonable terms. InThere addition, therealso may be labor or other disputes at either ports of departure or at ports of entry that may delay or otherwise hinder the flow of merchandise. Additional factors, such as customs or border control policies and enforcement and new or changing tariffs or trade sanctions, such as additional or new import tariffs, may further delay or hinder transportation of merchandise or the costs to obtain them. There are multiple factors in the transportation of merchandise that are both outside of our control and which may negatively impact the cost of the merchandise or the timeframes in which we receive the same.

Factors such as inflation, tariffs, cost increases, and energy prices could have a material adverse effect on our business, financial condition, and results of operations.

Many of the factors identified above also affect commodity rates, transportation costs, costs of labor, insurance, and healthcare, the strength of the U.S. dollar, lease and other site acquisition costs, measures that create barriers to or increase the costs associated with international trade, changes in other laws and regulations, and other economic factors, all of which may impact our cost of merchandise sold and our selling, general, and administrative expenses, which could have a material adverse effect on our business, financial condition, and results of operations.

Our long-term business strategy does not presently include the development of online retailing capabilities or offering of an omnichannel shopping experience. To the extent that we implement online operations, we would incur substantial expenses related to such activities and would be exposed to additional risks, including additional cybersecurity risk. Furthermore, the development of an online retail marketplace is a complex undertaking, and there is no guarantee that the resources we apply to this effort willwould result in any material increased revenues or better overall operating performance. However, with the growing acceptance of online and omnichannel shopping, which may have accelerated as a result of the COVID-19 pandemic, both among consumers who previously shopped online and consumers who did not previously do so, or did not do so as frequently, we may continue to face challenges related to customers shopping in brick-and-mortar stores. In addition, the increased proliferation of mobile devices and enhanced and robust connections to mobile networks,networks and competition from other retailers in the online and omnichannel retail marketplace is are expected to continue to increase and may negatively impact our results of operations. A number of traditional online retailers have established robust online and omnichannel operations. Increased competition from online or omnichannel retailers and our lack of an online or omnichannel retail presence may reduce our customers’ desire to purchase merchandise from us and could have a material adverse effect on our business, financial condition, and results of operations. If consumers determineelect to shop more online due to cultural or health concerns, those consumers may be less likely to return to brick-and-mortar retailers in the future.

In addition, if any of our competitors were to consolidate their operations, such consolidation may result in competitors with greatly improved financial resources, improved access to merchandise, greater market penetration, and other improvements in their competitive positions, as well as result in the provision of a wider variety of merchandise at competitive prices by these consolidated companies, which could have a material adverse effect on our business, financial condition, and results of operations.

With limited exceptions, inventory is shipped directly from suppliers to our distribution centers in York, PA, Commerce, GA, Lancaster, TX, and Princeton, ILIL, where the inventory is processed, sorted, and shipped to our stores. We depend in large part on the orderly operation of this receiving and distribution process, which depends, in turn, on adherence to shipping schedules and effective management of our distribution centers. Increases in transportation costs (including increases in fuel and other variable costs), supplier-side delays, reductions in the capacity of carriers, changes in shipping companies, the impact of future pandemics or health crises on our workforce, labor strikes, or shortages in the transportation industry, war, civil unrest, geopolitical tensions, trade wars, and other unexpected delivery interruptions also have the potential to derail our orderly distribution process. We also may not anticipate changing demands on our distribution distribution system or timely develop and open any necessary additional facilities. In addition, events beyond our control, such as disruptions in operations due to fire or other catastrophic events or labor disagreements, may result in delays in the the delivery of merchandise to our stores. While we maintain business interruption insurance, in the event one or more of our distribution centers are disrupted or shut down for any reason, such insurance may not be sufficient, and any related insurance proceeds may not be timely paid to us. In addition, our new stores receiving shipments may be further away from our distribution centers, which may increase transportation costs and may create transportation scheduling strains. Any repeated, intermittent, or long-term disruption in the operations of our distribution centers would hinder our ability to provide merchandise to our stores and could have a material adverse effect on our business, financial condition, and results of operations.

Our success depends to a significant degree on the skills, experience and efforts of our executive officers, our merchant team, support center and field management, and other key personnel. The unexpected loss of services of any of our executive officers, senior members of our merchant team, or senior management could materiallymaterially, adversely affect our business and operations. Competition for skilled and experienced management in the retail industry is intense, and our future success will depend on our ability to attract and retain qualified personnel, including our merchant team, which is responsible for purchasing, and negotiating the terms of, our merchandise. Failure to attract new and retain existing qualified personnel could have a material adverse effect on our business, financial condition, and results of operations.

We focus on providing our customers with a memorable and engaging shopping experience. To grow our operations and meet the needs and expectations of our customers, we must attract, train, and retain a large number of highly qualified store management personnel and sales associates, while controlling labor costs. Our ability to control labor costs is subject to numerous external factors and compliance with laws and regulatory structures, including competition for, and availability of, qualified personnel in a given market, unemployment levels within those markets, governmental regulatory bodies such as the Equal Employment Opportunity Commission (“EEOC”) and the National Labor Relations Board (“NLRB”), prevailing wage rates and wage and hour laws, minimum wage laws, the impact of legislation governing labor and employee relations or benefits, such as the Affordable Care Act (“ACA”), costs of health insurance and other health benefits, healthcare costs, and our ability to maintain good relations with our associates. We compete with many other retail businesses for many of our store management personnel, and sales associates in hourly and part-time positions. These positions have had historically high turnover rates, which lead to increased training and retention costs. The accelerated pace at which we have been, and plan to continue, opening new stores, both in existing and new markets, could make it increasingly difficult to recruit, hire, and retain employees that will be able to properly execute our business goals and offer our customers a quality experience in those new stores. Further, anticipated changes in immigration lawslaws, regulations, and regulations enforcement could adversely affect the pool of candidates legally available to fill positions.

We use marketing and promotional programs to attract customers to our stores and to encourage purchases by our customers. Although we use various media for our promotional efforts, including regular and Ollie’s Army mailers, email campaigns, radio and television advertisements, and sports marketing, we primarily advertise our in-store offerings through printed flyers. In fiscal 2024,2025, over 50%40% of our advertising spend was for the printing and distribution of flyers. If the efficacy of printed flyers as an advertising medium declines, or if we fail to successfully develop and implement new marketing, advertising, and promotional strategies, such as an effective social media strategy, our competitors may be able to attract the interest of our customers, which could reduce customer traffic in our stores. Changes in the amount and degree of promotional intensity or merchandising strategy by our competitors could cause us to have difficulties in retaining existing customers and attracting new customers. Further, social media allows for an increased speed at which publicity, both positive and negative, can be transmitted. Information spread over social media, whether based on actual or perceived conditions or events, could be disseminated before we can meaningfully investigate and respond to the underlying issue, if any. Negative online postings or comments about our business, including as a result of inaccurate, fictitious, or even malicious postings or social media content, could adversely affect our business and cause damage to the value of our brand.

There are inherent climate-related risks wherever our business is conducted. Changes in market dynamics, shareholder expectations, local, national, and international climate change policies, and the frequency and intensity of extreme weather events on critical infrastructure in the United States and abroad, all have the potential to disrupt our business and operations. Climate conditions such as drought, wildfires, storms, sea-level rise, and flooding, may occur more frequently or with greater intensity. The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, floods, and earthquakes, epidemic outbreaks, and unusual weather conditions in regions where our stores are located could adversely affect our business and result in lower sales. Additionally, climate-related events and circumstances have resulted, and likely will continue to result, in increased costs for property insurance policies. In addition, severeSevere weather, such as heavy snowfall or extreme temperatures, may discourage or restrict customers in a particular region from traveling to our stores, stores, thereby reducing our sales and profitability. If severe weather conditions occur during the second or fourth quarter of our fiscal year, the adverse impact to our sales and profitability could be even greater than at other times during the year because we generate a larger portion of our sales and profits during these periods. NaturalThe frequency and/or severity of such natural disasters, whichsuch may includeas tornadoes, hurricanes, floods, and earthquakes, may impact our stores or other operations. The frequency and/or severity of such natural disasters may be unpredictable, and we have a growing number of stores in areas that may be impacted by weather events and natural disasters such as the types listed above. To the extent that such weather events or natural disasters may damage our stores or other operations, we may be unable to operate stores or other facilitatesfacilities and our consolidated financial results may be materially adversely affected. Epidemic or pandemic outbreaks, terrorist attacks orattacks, war, protests, civil unrest, and disruptive political events in regions where our stores are located could impact our management and sales associates, our inventory supply, our delivery schedules, or our ability to keep our stores open due to mandatory governmental restrictions or may cause our customers to avoid shopping at brick-and-mortar retailers or reduce the number of trips they will make to our stores. Also, to the extent these events impact one or more of our key suppliers or result in the closure of one or more of our distribution centers or our corporate headquarters, we may be unable to maintain delivery schedules or provide other support functions to our stores. These conditions could have a sustained material adverse effect on our business, financial condition, and results of operations.

We routinely incur significant costs in complying with federal, state, and local laws and regulations. The complexity of the regulatory environment in which we operate, and the related costs of compliance, are increasing due to expanding and additional legal and regulatory requirements and increased or uncertain enforcement efforts. New laws or regulations, including, but not limited to those dealing with healthcare and healthcare reform, product compliance and safety, consumer credit, privacy and information security, the environment, and labor and employment, among others, or changes in existing federal, state, and local laws and regulations, particularly those governing the sale of merchandise and food safety and quality (including changes in labeling or disclosure requirements), federal or state wage requirements, employee rights, health care, social welfare or entitlement programs such as health insurance, paid leave programs, other changes in workplace regulation, and compliance with laws regarding public access to our stores, may result in significant added expenses or may require extensive system and operating changes that may be difficult to implement implement and/or could materially increase our cost of doing business. Untimely compliance or noncompliance with applicable laws or regulations or untimely or incomplete execution of a mandated governmental action, such as a product recall, can result in the imposition of penalties, including loss of licenses or significant fines or monetary penalties, store or distribution center closures, or class action litigation or other litigation, in addition to reputational damage. Additionally, changes in tax laws, the interpretation of existing laws, or our failure to sustain our reporting positions on examination could materially adversely affect our effective tax rate and could have a material adverse effect on our business, financial condition, and results of operations.

We purchase merchandise directly from suppliers located outside of the United States. During fiscal 2024,2025, substantiallythe allmajority of our private label inventory purchases were directimports. imports. Additionally, a significant amount of our domestically purchased merchandise is manufactured in foreign countries. Our ability to identify qualified suppliers and to access merchandise in a timely and efficient manner is a significant challenge, especially with respect to merchandise sourced outside of North America. Global sourcing and foreign trade involve numerous factors and uncertainties beyond our control, including possible changes to U.S. trade policy, increased shipping costs, the timing of shipments, increased import duties, more restrictive quotas, loss of most favored nation trading status, currency exchange rates, work stoppages, transportation delays, port of entry issues, economic uncertainties such as inflation, foreign government regulations, civil and political unrest, natural disasters, war, terrorism, trade restrictions, political instability, the financial stability of vendors, merchandise quality issues, unexpected contagion, existing viruses or illnesses, and tariffs or trade sanctions, as well as international trade disputes or changes in trading relationships resulting from current and future political environments. Moreover, negative press or reports about internationally manufactured merchandise may sway public opinion, and thus customer confidence, away from affected merchandise sold in our stores. Although we have implemented and maintain policies and procedures to promote our suppliers’ compliance with laws and regulations relating to foreign markets and imports, and to monitor the compliance of our suppliers, this does not guarantee that suppliers and other third parties with whom we do business will not actually or allegedly violate such laws or regulations, or our policies. These and other issues affecting our international vendors could have a material adverse effect on our business, financial condition, and results of operations.

Any disruptions to our information technology systems or breaches of our network security could disrupt or interrupt our operations, compromise our reputation, expose us to litigation, government enforcement actions, and costly response measures and couldmay have a material adverse effect on our business, financial condition, and results of operations.

An increasingly significant portion of our sales depends on the continuing operation of our information technology and communications systems, including, but not limited to, our point-of-sale system and our credit card processing systems. Our information technology, communications systems, and electronic data may be vulnerable to damage or interruption from malicious code, phishing, smishing, artificial intelligence deepfakes, computer viruses, other malware attacks, ransomware attacks, loss of data, unauthorized data breaches, usage errors by our associates or our contractorscontractors, or other attempts to harm our systems, including cyber-security attacks or other breaches of cardholder data, earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and outages, computer,and computer and telecommunications failures. Some of our systems are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The nature and scope of threats from artificial intelligenceintelligence, in particularparticular, represents a new, unpredictable frontier. The occurrence of intentional sabotage, unauthorized access, natural disaster, or other unanticipated problems could result in lengthy interruptions in our service. Any errors or vulnerabilities in our systems, or damage to or failure of our systems, could result in interruptions in our services, non-compliance with certain certain regulations, substantial remediation costs, and liability for lost or stolen information, any of which could have a material adverse effect on our business, financial condition, and results of operations.

We have access to,to collect,collect or maintain private or confidential information regarding our customers, associates, and suppliers, as well as our business. The protection of our customer, associate, supplier, and company data is critical to us. In recent years, there has been increasing regulation, enforcement, and litigation activity in the area of privacy, data protection, and information security in the United States and in various other countries, with the frequent imposition of new and changing requirements across the many states in which we conduct our business. State privacy laws and regulations, such as The Connecticut Data Privacy Act, theThe New York Privacy Act, The California Consumer Privacy Act of 2018, The California Privacy Rights Act, and others, have imposed and likely will impose additional data protection obligations on companies considered to be doing business in such applicable states and provides for substantial fines for non-compliance and, in some cases, a private right of action to consumers who are victims of data breaches. Privacy regulations in particular may shift from federal to state-level regimes, resulting in additional time, effort, and costs to navigate the inconsistent regulatory landscape for multi-state operators. Complying with existing laws and similar emerging and changing privacy, data protection, and information security requirements may cause us to incur substantial costs or compliance risks due to, among other things, system changes and the development of new processes and business initiatives. Our failure to comply with privacy, data protection, and information security laws could result in potentially significant regulatory and/or governmental investigations and/or actions, litigation, fines, sanctions, ongoing regulatory monitoring, and customer attrition.

We depend on a variety of information technology systems for the efficient functioning of our business. We rely on certain hardware, telecommunications, and software vendors to maintain and periodically upgrade many of these systems so that we can continue to support our business. Various components of our information technology systems, including hardware, networks, and software, are licensed to us by third-party vendors. We rely extensively on our information technology systems to process transactions, summarize results, and manage our business. We are in compliance with PCI,PCI. and complianceCompliance with PCI and implementing related procedures, technology and information security measures requires significant resources and ongoing attention. Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology such as those necessary to achieve compliance with PCI or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations. Any material interruptions or failures in our payment-related systems, including in connection with our co-branded credit card program, could have a material adverse effect on our business, financial condition, and results of operations.

ACCOUNTING AND FINANCIAL MATTERS

RISKSOWNERSHIP RELATEDOF TOOUR COMMON STOCK AND CORPORATE GOVERNANCE

The Sarbanes-Oxley Act and rules implemented by the SEC and the NASDAQ Stock Market LLC (“NASDAQ”) have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Implementing and maintaining internal controls is both time-consuming and costly. If we fail to maintain an effective internal control environment or to comply with the numerous legal and regulatory requirements imposed on public companies, we could make material errors in, and be required to restate, our financial statements. Any such restatement could result in a loss of public confidence in the reliability of of our financial statements and sanctions imposed on us by the SEC. If we are unable to satisfy our obligations as a public company, we could be subject to, among other items, the delisting of our common stock, fines, sanctions, and other regulatory regulatory actions, as well as potential civil litigation.litigation and reputational harm.

Anti-takeover provisions in our third amended and restated certificate of incorporation and fourth amended and restated bylaws, and under Delaware law, could make an acquisition acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current managementmanagement, and limit the market price of our common stock.

The Company’s credit facility (the “Credit Facility”) provides for a five-year $100.0 million revolving credit facility, which includes a $45.0 million sub-facility for letters of credit and a $25.0 million sub-facility for swingline loans (the “Revolving Credit Facility”). As of FebruaryJanuary 1,31, 2025,2026, we had no outstanding borrowings on the Revolving Credit Facility, with $85.8$86.5 million of borrowing availability. We may, from time to time, incur additional indebtedness.

We have adopted a share repurchase program under which an aggregate of $400 million was previously authorized, and, as of the expiration of the 2024 fiscal year, approximately $32.7 million remained available. On March 19, 2025, the Company announced that the Board of Directors approved an increase to the amount available under the existing repurchase program by an additional, incremental amount of up to $300 million and approved the extension of the term of such program from March 31, 2026 to March 31, 2029. While the authorization of the repurchase program has an expiration date, the authorizations are subject to extension or earlier termination by the Board of Directors at any time. We are not obligated to repurchase a specified number or dollar value of shares under our share repurchase program, and all repurchase decisions are made in our sole discretion. Even if our share repurchase program is fully executed, it may not enhance long-term stockholder value. Also, the amount, timing, and execution of our share repurchase program may fluctuate based on our priorities for the use of cash for other purposes and because of changes in cash flows, tax laws, and the market price of our common stock.

We operate on a fiscal calendar widely used by the retail industry that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday nearer January 31 of the following year. References to “2025” refer to the 52-week fiscal year ended January 31, 2026 and references to “2024” refer to the 52-week fiscal year ended February 1, 2025 and references to “2023” refer to the 53-week fiscal year ended February 3, 2024.2025. References to “20252026” refer to the 52-week fiscal year ending January 31, 2026.30, 2027.

Since the founding of Ollie’s in 1982, our principal growth strategy has been the opening of new stores. Historically, we have expanded our store base by opening new stores organically. More recently, we have expanded our store base through acquiring former store locations of bankrupt retailers through the bankruptcy auction process. Our growth strategy continuously evaluates the best opportunities in the marketplace and combines organic new store openings with the acquisition of store locations. We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner. As of FebruaryJanuary 1,31, 20252026 we have grown to 559645 stores in 3134 states.

Our ability to grow and our results of operations may be impacted by additional factors and uncertainties, such as consumer spending habits,levels, which are subject to macroeconomic conditions and changes in discretionary income. Our customers’ discretionary income is primarily impacted by gaschanges prices,in wages, risinggasoline and energy prices, interest rates, inflation, housing prices, rental rates, and consumer trends and preferences, which fluctuate depending on the environment.preferences. The potential consolidation of our competitors competitors or other changes in our competitive landscape could also impact our results of operations or our ability to grow,grow. evenHowever, thoughbecause we compete withoffer a broad rangeselection of retailers.merchandise at extreme values, we believe we are generally less impacted than other retailers by economic cycles that correspond with declines in general consumer spending habits. We believe we also benefit from periods of increased consumer spending.

WeManagement considerlooks at a varietynumber of financial and operating measures in assessing the performance of ourthe business.business, The key measures we use are number ofincluding new stores,store openings, net sales, comparable store sales, gross profit and gross margin, SG&A, pre-opening operating expenses, operating income, earnings per share, EBITDA, and Adjusted EBITDA.

The number of new stores reflects the number of stores opened during a particular reporting period. Before we open new stores, we incur pre-opening expenses described below under “Pre-Opening Expenses” and we make an initial investment in inventory. We also make initial capital investments in fixtures and equipment, which we amortize over time. Sales of new stores are typically strong in the first few months of operation because of the advertising and marketing spending associated with a new store grand opening and the word of mouth in the local community.

Comparable store sales measure performance of a store during the current reporting period against the performance of the same store in the corresponding period of the previous year. Comparable store sales consist of net sales from our stores beginning on the first day of the sixteenth full fiscal month following the store’s opening, which is when we believe comparability is achieved. Stores that remain open during a remodel or refresh process, stores that are relocated within the same trade area, and stores that changed in size are generally classified in the same way as the original store, and we believe that the impact to our change in consolidated comparable store sales percentage is immaterial. Comparable store sales are impactedalso referred to as “same-store” sales by theother sameretail factors that impact net sales.companies.

Gross profit is equal to our net sales less our cost of sales. CostIncluded in cost of sales includesare: merchandise costs, inventory markdowns, inventory shrinkage and transportation, distribution, and warehousing costs, including wages, benefits, and depreciation and amortization. Gross margin is gross profit as a percentage of our net sales. Gross margin is a measure used by management to indicate whether we are selling merchandise at an appropriate gross profit.

Selling, general, and administrative (SG&A) expenses are comprised of payrollwages and benefits for store, field support, and support center associates. SG&A expenses also include marketing and advertising expense, occupancy occupancyand operating costs for stores and the store support center, insurance, corporate infrastructure, and other general expenses. The components of our SG&A remain relatively consistent per store and for each new store opening. SG&A generally increase as we grow our store base and as our net sales increase. A significant portion of our expenses is primarily fixed in nature, and we expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales. We expect that our SG&A will continue to increase in future periods with future growth.

EBITDA and Adjusted EBITDA are key metrics used by management and our Board to assess our financial performance. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. We use Adjusted EBITDA to supplement U.S. Generally Accepted Accounting Principles (“GAAP”) measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to evaluate our performance in connection with compensation decisions and to compare our performance against that of other peer companies using similar measures. Management believes it is useful to investors and analysts to evaluate these non-GAAP measures on the same basis as management uses to evaluate the Company’s operating results. We believe that excluding items from operating income, net income, and net income per diluted share that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business.

This section includes comparisons of certain 20242025 financial information to the same information for 2023.2024. Year-to-year comparisons of the 20232024 financial information to the same information for fiscal 2022,2023, the 52-week 53-week period ended JanuaryFebruary 28,3, 20232024 (“20222023”), are contained in Item 7 of our Form 10-K for 20232024 filed with the SEC on March 27,26, 20242025, as amended on April 11, 2025, and available through the SEC’s website at https://www.sec.gov/edgar/searchedgar/companysearch.html.

Net sales increased to $2.649 billion in 2025 from $2.272 billion in 2024 from $2.103 billion in 2023,2024, an increase of $169.0$377.0 million, or 8.0%.16.6%. The increase in net sales was the result of new store unit growth and a comparable store sales increase of 2.8%. Excluding the 53rd week, sales increased 9.8% year over year.3.7%.

Gross profit increased to $1.073 billion in 2025 from $914.5 million in 2024 from $832.4 million in 2023,2024, an increase of $82.1$158.5 million, or 9.9%.17.3%. Gross margin increased 7020 basis points to 40.5% in 2025 from 40.3% in 2024 from 39.6% in 2023.2024. The increase in gross gross margin in fiscal 20242025 is primarily due to favorablehigher merchandise margins, partially offset by higher supply chain costs.costs, including incremental tariff expense.

SG&A increased to $709.0 million in 2025 from $612.4 million in 2024 from $562.7 million in 2023,2024, an increase of $49.7$96.6 million, or 8.8%.15.8%. Included in SG&A expenses in 2024 isExcluding a one-time expense of $5.5 million for the accelerated expense resulting from the modification of existing equity awards for our Executive Chairman.Chairman Excludingin this one-time expense,2024, SG&A increased 7.9%16.8% to $709.0 million in 2025 from $606.9 million in 2024 from $562.7 million in 2023.2024. This increase was primarily driven by higher selling expenses associatedrelated with ourto new store unit growth. As a percentage of net sales, SG&A, exclusive of the one-time stock awards expense, decreasedincreased 10 basis points to 26.8% in 2025 from 26.7% in 2024 from 26.8% in 2023.2024. This decreaseincrease is primarily the result of increasedhigher medical and casualty claims, partially offset by the leverage of fixed expensescosts from thehigher increasesales and optimization efforts in comparable store sales.marketing.

Depreciation and amortization expenses increased to $41.0 million in 2025 from $33.2 million in 2024 from $27.8 million in 2023,2024, an increase of $5.4$7.8 million, or 19.4%,23.4%, theresulting result offrom the increased asset base due to new store growth and investments in existing stores.

Pre-opening expenses increased to $25.3 million in 2025 from $19.3 million in 2024 from $14.1 million in 2023,2024, an increase of $5.2$6.0 million, or 37.3%.30.9%. The increase iswas primarily duedriven to the earlier timing ofby new store openings in fiscal 2025 as compared to fiscal 2024, start-up costs related to opening the Princeton, IL distribution center,growth and dark rent expense of $5.2 million associated with the bankruptcy acquired new store locations.stores. We opened 50 new86 stores in 2025 compared to 50 stores opened and closed three stores closed in 20242024. compared withOf havingthe opened 45 new stores and closed one86 store inopenings, 2023.63 of these were bankruptcy acquired leases that carried higher levels of dark rent. As a percentage of net sales, pre-opening expenses increased 2010 basis points to 1.0% in 2025 from 0.9% in 2024 from 0.7% in 2023.2024.

Interest income, net was $18.7 million in 2025 compared with $16.3 million in 2024 compared with $14.7 million in 2023.2024. The increase in interest income, net in 20242025 is primarily due to higher average cash and cash equivalent and short-terminvestments investmentsbalances, balancespartially comparedoffset toby 2023.lower interest rates.

Income tax expense increased to $75.8 million in 2025 from $66.1 million in 2024 from $61.0 million in 2023,2024, an increase of $5.0$9.7 million, or 8.2%.14.7%. The effective tax rates for 20242025 and 20232024 were 24.9%24.0% and 25.2%,24.9%, respectively. The variancedecrease in the effective tax ratesrate betweenwas driven by the periodsimpact wasof discrete items recognized, primarily duelower to an increase in discreteexcess tax benefits related to stock-based compensation, partially offset by the impact of higher non-deductible compensation. Discrete tax benefits totaled $2.8 million and $1.1 million in 2024 and 2023, respectively. For further information, information, see Note 8 under “Notes to Consolidated Financial Statements.”

Adjusted EBITDA increased to $366.0 million in 2025 from $313.1 million in 2024 from $275.2 million in 2023,2024, an increase of $37.9$52.9 million, or 13.8%.16.9%. Adjusted EBITDA margin was 13.8% for 2025 and 2024.

Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility. As of FebruaryJanuary 1,31, 2025,2026, we had $428.7$296.3 million of cash and cash equivalents and short-term investments on hand and $85.8$86.5 million available to borrow under our Revolving Credit Facility. For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to the Consolidated Financial Statements.”

Our capital expenditures are primarily related to new store openings, lease acquisitionsacquisitions, and related build-out costs, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers, and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems. We spent $120.6$101.9 million and $124.4$120.6 million for capital expenditures in 20242025 and 2023,2024, respectively. We opened 5086 new stores and closed three store in 2024.2025.

Capital expenditures in 20252026 are planned to be approximately $83$103 to $88$113 million, primarily for the opening of 75 new stores, store-level initiatives at our existing stores, the expansion of two existing distribution centers, as well as general corporate capital expenditures, including information technology. We have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects.

OnIn December 15, 2020, the Board of Directors of the Company authorized the repurchase of up to $100.0 million of shares of the Company’s common stock. On March 16, 2021, the Board of Directors of the Company authorized an increase of $100.0 million in the Company’s share repurchase program, resulting in $200.0 million approved for share repurchases through January 13, 2023. On November 30, 2021, the Board authorized an additional $200.0 million to repurchase stock pursuant to the Company’s share repurchase program, expiring on December 15, 2023. On November 30, 2023, the Company’sour Board of Directors authorized ancommon extensionstock torepurchases theunder existinga share repurchase programprogram. setThe authorized amount of the program, which has been increased from time to expiretime, onis Decemberauthorized for up 15,to 2023, until March 31, 2026. On March 19, 2025, the Company announced the Board of Directors approved a new share repurchase authorization of an additional $300.0$700.0 million of the Company’s outstandingstock commonas stock,of January 31, 2026. The share repurchase program is effective through March 31, 2029. The shares to be repurchased may be purchased from time to time in open market conditions (including blocks), privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, issuer self-tender offers or any combination of the foregoing. The timing of repurchases and the actual amount purchased will depend on a variety of factors, including the market price of our shares, general market, economic and business conditions, and other corporate considerations. Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow us to purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Repurchases are expected to be funded from cash on hand or through the utilization of our Revolving Credit Facility. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by our Board of Directors at any time.

During 2024,2025, we repurchased 639,788636,640 shares of our common stock for $53.0$73.8 million, inclusive of transaction costs, pursuant to our share repurchase program, and during 2023,2024, we repurchased 808,669639,788 shares of our common stock for $52.5$53.0 million, inclusive of transaction costs. These expenditures were funded by cash generated from operations. As of FebruaryJanuary 1,31, 2025,2026, we had approximately $32.7$258.8 million remaining under our share repurchase authorization. There can be no assurances that any additional repurchases will be completed, or as to the timing or amount of any repurchases.

We operate on a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday nearer to January 31st of the following year. References to “fiscal year 2026” or “fiscal 2026” refer to the 52-week period of February 1, 2026 to January 30, 2027. References to “fiscal year 2025” or “fiscal 2025” refer to the 52-week period of February 2, 2025 to January 31, 2026. References to the “firstsecond quarter of fiscal 2026” and the “firstsecond quarter of fiscal 2025” refer to the thirteen weeks of May 3, 2026 to August 1, 2026 and May 4, 2025 to August 2, 2025, respectively. Year-to-date periods ended August 1, 2026 and August 2, 2025 refer to the twenty-six weeks of February 1, 2026 to MayAugust 2,1, 2026 and February 2, 2025 to MayAugust 3,2, 2025, respectively. Historical results are not necessarily indicative of the results to be expected for any future period and results for any interim period may not necessarily be indicative of the results that may be expected for a full year.

Ollie’s Bargain Outlet is a leading off-price retailer of brand namebrand-name household products. Since our founding in 1982, the Company’s mission has been to sell Good Stuff Cheap®. We do this through a flexible buying model that focuses on closeout merchandise and excess inventory from suppliers and manufacturers around the world. Our stores offer Real Brands! Real Bargains! ® in a treasure hunt shopping environment at prices up to 70% below traditional retailers.

Our highly experienced merchandise team is constantly scouring the market and leveraging deep, long-standing relationships across the supply chain to find the best products at the best prices. We focus on buying cheap and selling cheap, and source products as unique buying opportunities present themselves. While the individual products sold in our stores are constantly changing, our overall merchandise mix is designed to save people money on a wide variety of brand namebrand-name household products that they need and use in their everyday lives.

Our primary point of differentiation against other retailers is the pricing of our products. Our goal is to be the lowestlowest- priced retailer of any product offered by our stores. We believe our flexible business model, opportunistic buying strategy, low costlow-cost structure, experienced merchant team with deep relationships across the vendor community, and long history ofextensive experience of buying and selling closeout merchandise and excess inventory differentiatesdifferentiate us from traditional retailers.

Since the founding of Ollie’s in 1982, our principal growth strategy has been the opening of new stores. Historically, we have expanded our store base by opening new stores organically. MoreIn recently,fiscal 2024 and fiscal 2025, we have expanded our store base throughby acquiring former store locations of bankrupt retailers through the bankruptcy auction process. Our growth strategy continuously evaluates the best opportunities in the marketplace and combines organic new store openings with the acquisition of store locations. We follow a contiguous unit growth strategy that combines backfilling existing markets and states with entering new markets and states in a contiguous manner. As of MayAugust 2,1, 2026 we haveoperated grown to 672686 stores in 3536 states.

While we are focused on driving comparable store sales and managing our expenses, the biggest driver of our net sales and profitability growth has historically been the opening of new stores. As we continue to grow, we believe we will have greater access to brand namebrand-name closeout merchandise and an increased deal selection, resulting in more potential offerings for our customers.

Comparable store sales measure performance of a store during the current reporting period against the performance of the same store in the corresponding period of the previous year. Comparable store sales consist of net sales from our stores beginning on the first day of the sixteenth full fiscal month following the store’s opening, which is when we believe comparability is achieved. Stores that remain open during a remodel or refresh process, stores that are relocated within the same trade area, and stores that changed in size are generally classified in the same way as the original store, and we believe that thetheir impact toon ourthe percentage change in consolidated comparable store sales percentage is immaterial. Comparable store sales are also referred to as “same-store” sales by other retail companies.

Gross profit is equal to our net sales less our cost of sales. Included in costCost of sales areincludes: merchandise costs, inventory markdowns, inventory shrinkage and tariff, transportation, distribution, and warehousing costs, including wages, benefits, and depreciation and amortization.

The method of calculating comparable store sales, gross profit, SG&A and pre-opening expenses varies across the retail industry. As a result, our calculation of these items may not necessarily be compatiblecomparable withto similarly titled measures reported by other retail companies.

WeDuring the second quarter of fiscal 2026, we opened 2715 new stores and closed one store due to storm-related damage, compared with 29 new store openings in the firstsecond quarter of fiscal 2025. Pre-opening expenses related to these store openings were $5.2 million and $9.0 million for the second quarters of fiscal 2026 and opened2025, 25 new stores in the first quarter of fiscal 2025. In connection with these store openings, we incurred expenses of $6.4 million and $6.7 million in the respective periods.respectively.

In February 2026, the U.S. Supreme Court issued a ruling that certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) were invalid, and in March 2026, the U.S. Court of International Trade ruled that the U.S. Customs and Border Protection (“CBP”) must refund duties imposed under IEEPA. In April 2026, the CBP launched a platform for submitting IEEPA tariff refund claims. AsDuring the second quarter of May 2,fiscal 2026, we hadreceived not$29.4 recognizedmillion the effect of any potentialin tariff refunds, asof thewhich timing$28.3 million was included in cost of sales and amount$1.1 ofmillion anywas potentialincluded refundsin forinterest previously collected tariffs remains uncertain and may be subject to further legal and regulatory developments. We will continue to monitor these developments and their potential impact on our financial position, results of operations, and cash flows.income.

We derived the condensed consolidated statements of income for the firstthirteen quarterand oftwenty-six fiscalweeks ended August 1, 2026 and theAugust first quarter of fiscal2, 2025 from our unaudited condensed consolidated financial statements and related notes. Our historical results are not necessarily indicative of the results that may be expected in the future.

FirstSecond Quarter of Fiscal 2026 Compared to FirstSecond Quarter of Fiscal 2025

Net sales increased to $658.9$741.3 million in the firstsecond quarter of fiscal 2026 from $576.8$679.6 million in the firstsecond quarter of fiscal 2025, an increase of $82.1$61.7 million, or 14.2%.9.1%. The increase in net sales was the result of new store unit growthgrowth, andpartially offset by a comparable store sales increasedecrease of 1.7%.1.8%.

Comparable store sales increaseddecreased 1.7%1.8% in the firstsecond quarter of fiscal 2026 compared with a 2.6%5.0% increase in the firstsecond quarter of fiscal 2025. The increasedecrease in comparable store sales in the first second quarter of fiscal 2026 was driven by ana increasedecrease in basket size.

Gross profit increased to $276.0$322.2 million in the firstsecond quarter of fiscal 2026 from $237.0$271.3 million in the firstsecond quarter of fiscal 2025, an increase of $39.0$50.8 million, or 16.4%.18.7%. Gross margin increased 80360 basis points to 41.9%43.5% in the firstsecond quarter of fiscal 2026 from 41.1%39.9% in the firstsecond quarter of fiscal 2025. The increase in gross margin was driven by lower supply chain costscosts, primarily from IEEPA tariff refunds received and alower modesttariff increaserates incurred in merchandisethe margin.period.

SG&A expenses increased to $188.7$197.2 million in the firstsecond quarter of fiscal 2026 from $164.8$175.5 million in the firstsecond quarter of fiscal 2025, an increase of $23.9$21.7 million, or 14.5%, driven by higher selling expenses primarily related to new store growth.12.4%. As a percentage of net sales, SG&A remainedincreased flat80 atbasis 28.6%points to 26.6% in the firstsecond quarter of fiscal 2026 from 25.8% in the second quarter of fiscal 2025. The increase in SG&A as a percentage of net sales was primarily driven by the deleveraging of fixed costs from the decline in comparable store sales and 2025,higher respectively.marketing expense due to the timing shift of one merchandise flyer.

Pre-opening expenses decreased to $6.4$5.2 million in the firstsecond quarter of fiscal 2026 from $6.7$9.0 million in the firstsecond quarter of fiscal 2025, a decrease of $0.3$3.8 million, or 3.2%.42.0%. The decreasedecline was primarily driven by lowerfewer dark rent expense associated with the bankruptcy acquired stores, partially offset by an increase innew store openings. InWe theopened first quarter of fiscal 2026, we incurred rent expense on 24 bankruptcy acquired stores, compared with 66 such15 stores in the first quarter of fiscal 2025, and these stores carry higher levels of dark rent. We opened 27 stores in the firstsecond quarter of fiscal 2026, compared towith 2529 stores in the firstprior-year quarter of fiscal 2025.period. As a percentage of net sales, pre-opening expenses decreased to 1.0%0.7% in the firstsecond quarter of fiscal 2026 compared to 1.2%1.3% in the firstsecond quarter of fiscal 2025.

Interest income, net was $5.0$6.1 million in the firstsecond quarter of fiscal 2026 compared with $4.8$4.5 million in the firstsecond quarter of fiscal 2025. The increase iswas primarily due to highertariff averageinterest cashreceived and cashin equivalentthe quarter and investmentshigher investment balances, partially offset by lower interest rates.

Income tax expense in the firstsecond quarter of fiscal 2026 was $18.1$29.2 million compared to $13.4$20.2 million in the firstsecond quarter of fiscal 2025. The effective tax rates for the firstsecond quarters of fiscal 2026 and fiscal 2025 were 24.3%25.4% and 22.0%,24.8%, respectively. The change in the effective income tax rate was driven by the impact of discrete items recognized, primarily excess tax benefits related to stock-based compensation,compensation and the expiration of the Work Opportunity Tax Credit.

As a result of the foregoing, net income increased to $56.4$85.5 million in the firstsecond quarter of fiscal 2026 from $47.6$61.3 million in the firstsecond quarter of fiscal 2025, an increase of $8.8$24.2 million or 18.6%. 39.4%.

Adjusted EBITDA increased to $87.9$127.1 million in the firstsecond quarter of fiscal 2026 from $72.2$93.8 million in the firstsecond quarter of fiscal 2025, an increase of $15.7$33.3 million, or 21.8%.35.5%.

Our primary sources of liquidity are net cash flows provided by operating activities and available borrowings under our $100.0 million Revolving Credit Facility. Our primary cash needs are for capital expenditures and working capital. As of MayAugust 2,1, 2026, we had $89.6$88.4 million available to borrow under our Revolving Credit Facility and $249.6$187.5 million of cash and cash equivalents and short-term investments on hand. For further information regarding our Revolving Credit Facility, see Note 7 under “Notes to Unaudited Condensed Consolidated Financial Statements.”

Our capital expenditures are primarily related to new store openings, lease acquisitions and related build-out costs, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers, and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems. We spent $25.5$43.3 million and $26.7$26.4 million for capital expenditures during the firstsecond quarters of fiscal 2026 and fiscal 2025, respectively. For the twenty-six weeks ended August 1, 2026, we spent $68.8 million for capital expenditures compared to $53.2 million for the twenty-six weeks ended August 2, 2025. We opened 2715 new stores during the firstsecond quarter of fiscal 2026 and opened 2529 new stores during the firstsecond quarter of fiscal 2025.

Capital expenditures in fiscal 2026 are planned to be approximately $103 to $113 million, primarily for the opening of 75 new stores, store-level initiatives at our existing stores, the expansion of twoone existing distribution centers,center, as well as general corporate capital expenditures, including information technology. We have experienced, and may continue to experience, delays in construction and permitting of new stores and other projects.

In December 2020, our Board of Directors authorized common stock repurchases under a share repurchase program. The authorized amount of the program, which has been increased from time to time, is authorized for up to $700.0 million of the Company’s stock as of May 2, 2026. The share repurchase program is effective through March 31, 2029. The shares to be repurchased may be purchased from time to time in open market conditions (including blocks), privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, issuer self-tender offers or any combination of the foregoing. The timing of repurchases and the actual amount purchased will depend on a variety of factors, including the market price of our shares, general market, economic and business conditions, and other corporate considerations. Repurchases may be made pursuant to plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, which could allow us to purchase our shares during periods when we otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Repurchases are expected to be funded from cash on hand or through the utilization of our Revolving Credit Facility. The repurchase authorization does not require the purchase of a specific number of shares and is subject to suspension or termination by our Board at any time.

During the firsttwenty-six quarterweeks ofended fiscalAugust 1, 2026, we repurchased 542,4861,649,889 shares of our common stock for $53.4$137.3 million, inclusive of transaction costs, pursuant to our share repurchase program. During the first quartertwenty-six ofweeks fiscalended August 2, 2025, we repurchased 159,757257,434 shares of our common stock for $17.1$28.6 million, inclusive of transaction costs, pursuant to our share repurchase program. TheseThe expendituresrepurchases were funded by cash generated from operations. As of May 2,August 1, 2026, we had approximately $205.4$121.5 million remaining under our share repurchase authorization. There can be no assurancesassurance that any additional repurchases will be completed, or as to the timing or amount of any repurchases.

Net cash provided by operating activities inwas $153.6 million for the firsttwenty-six quartersweeks ofended fiscalAugust 1, 2026 andas fiscalcompared 2025to was $45.5$109.4 million andfor $28.7the million,twenty-six respectively.weeks ended August 2, 2025. Operating cash flow was positively impacted by higher net income and higher operating expense related accruals, partially offset by an increase in inventory resulting from new store growth and the timing of merchandise payments.

Net cash used in investing activities infor the firsttwenty-six quartersweeks ofended fiscalAugust 1, 2026 and fiscalAugust 2, 2025 was $49.6$150.7 million and $18.3$58.0 million, respectively. Cash used in investing activities includes purchases ofcapital property and equipmentexpenditures of $25.5$68.8 million and purchases of investments, net of maturities, of $24.5$82.3 million.

Net cash used in financing activities infor the firsttwenty-six quartersweeks ofended fiscalAugust 1, 2026 and fiscalAugust 2, 2025 was $57.9$141.9 million and $16.5$25.4 million, respectively. Cash used in financing activities reflects payments of $53.4$137.3 million for the repurchase of common stock and $4.8$4.9 million for taxes related to restricted stock vestings.