Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) shares are trading higher on Tuesday.

The company reported third-quarter adjusted earnings per share of 58 cents, beating the street view of 57 cents.

Quarterly sales of $517.43 million (+7.8%) beat the analyst consensus of $517.36 million. The increase in net sales was the result of new store unit growth.

Comparable store sales, however, decreased by 0.5%, a decline from the prior year’s increase of 7.0%.

Gross profit increased 10.5% to $214.5 million, while gross margin increased 100 basis points to 41.4%. The increase in gross margin was primarily driven by favorable supply chain costs.

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Operating income increased by 14.0% to $44.5 million, while operating margin improved by 50 basis points to 8.6%. Net income rose by 12.8%, reaching $35.9 million.

Adjusted EBITDA increased by 17.0% to $59.8 million in the quarter under review. Adjusted EBITDA margin rose by 100 basis points to 11.6%.

The company’s cash and cash equivalents and short-term investments were $303.9 million as of the end of the third quarter. Inventories as of the end of the third quarter of fiscal 2024 increased 14.1% to $607.3 million.

The company opened 24 new stores and closed three, including two permanent closures and one temporary closure due to Hurricane Helene. As a result, the company ended the quarter with 546 stores in 31 states, marking an 8.1% year-over-year increase in store count.

“The transition of the CEO role and responsibilities is progressing as planned. Eric van der Valk will become CEO at the beginning of fiscal 2025,” said John Swygert, Chief Executive Officer.

Outlook: Ollie’s Bargain Outlet expects 2024 sales to range from $2.27 billion to $2.28 billion versus a $2.284 billion estimate (prior view: $2.276 billion – $2.291 billion).

The company reiterates its adjusted EPS view of $3.22 – $3.30 versus the $3.27 estimate.

Price Action: OLLI shares are trading higher by 12.3% to $110.11 at last check Tuesday.

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