Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI) shares are trading higher after the company reported better-than-expected first-quarter FY24 earnings and raised the outlook.

The company reported first-quarter FY24 sales growth of 10.8% year-on-year to $508.82 million, beating the analyst consensus estimate of $505.79 million.

Comparable store sales increased 3.0% compared to a 4.5% increase last year.

Gross profit climbed 17.2% Y/Y to $209.4 million, with the margin expanding 220 basis points to 41.1%.

Operating margin expanded 270 basis points to 11.1%, and operating income for the quarter rose 46.6% to $56.5 million.

As of quarter-end, Ollie’s held cash and cash equivalents as well as short-term investments totaling $341.5 million. Cash provided by operating activities totaled $40.2 million.

Inventories as of the end of the first quarter increased 5.9% to $527.5 million, driven by new store growth.

Adjusted EBITDA of $69.4 million gained 40.3% Y/Y, and the margin increased 280 basis points to 13.6%.

Adjusted EPS of $0.73 beat the analyst consensus estimate of $0.65.

“Our first quarter comparable store sales, total revenue, gross margin, and expenses were all better than expected, demonstrating the strength of our business. Consumers clearly remain under pressure and are seeking value in their purchases,” said CEO John Swygert.

Executive Changes: The company announced the promotion of Eric van der Valk to the role of President, effective immediately, and to Chief Executive Officer in early 2025.

Eric van der Valk joined Ollie’s in 2021 as Executive Vice President and Chief Operating Officer.

Ollie’s also appointed Chris Zender as Executive Vice President and Chief Operating Officer, effective June 17, 2024. 

The company also announced the transition of John Swygert to Executive Chairman in early 2025.

Outlook: Ollie’s raised FY24 adjusted EPS outlook from $3.10 – $3.20 to $3.18 – $3.28, against the consensus of $3.19.

The company raised FY24 sales outlook from $2.248 billion – $2.273 billion to $2.257 billion – $2.277 billion,  versus the Street view of $2.27 billion.

The company expects comparable store sales to increase 1.5% to 2.3%, compared to the prior outlook of 1.0% to 2.0%.

Price Action: OLLI shares are trading lower by 4.52% at $85.75 in premarket at the last check Wednesday.