Ollie's Bargain Outlet (OLLI, Financial) saw its stock rise by 11% following its Q4 earnings report. While earnings per share met expectations, revenue grew by 2.8% year-over-year to $667.1 million, slightly below forecasts. Adjusting for an extra week in the previous year, revenue actually increased by 8.5%. The FY26 outlook was mixed, with lower-than-expected EPS but in-line revenue projections. The company plans to open 75 new stores in FY26, up from 50 in FY25, with comparable store sales expected to rise by 1-2%.

• Q4 same-store sales increased by 2.8%, meeting internal goals. Strong categories included housewares, food and candy, and electronics, although big-ticket items were softer. OLLI is attracting more high-income consumers while maintaining its low-income customer base.
• OLLI's FY26 performance started slowly in Q1 but is gaining momentum. The company faces challenging comparisons in June/July due to last year's strong air-conditioner sales. Comparisons should ease in the latter half of the year as it laps the Big Lots liquidation events. Comps are expected to be at the lower end of the 1-2% range in the first half and at the midpoint to higher end in the second half.
• With many retailers closing stores or going bankrupt, OLLI finds itself thriving amid consumer pressures and tariff uncertainties. Its business model is well-suited to capitalize on market disruptions like excess inventory and store closures.
• The closeout market remains robust due to factors like innovation, packaging changes, and shifting consumer demands. OLLI's management highlighted the consistent availability of closeout merchandise.
• OLLI recently acquired 40 store leases from former Big Lots locations, benefiting from below-market rents and long-term leases of 20-30 years, capitalizing on the availability of real estate and talent from struggling retailers.

Despite some lackluster headline numbers for Q4 and FY26 guidance, investors are optimistic about OLLI's 2.8% Q4 comp performance amid a compressed holiday season. The company is poised to benefit from retail sector disruptions, such as tariffs and competitor challenges. Closeout retailers like OLLI are well-positioned to navigate these conditions effectively.