Fourth quarter comparable sales woes hurt Ollie’s Bargain Outlet financial results, and the retailer pointed to a less balanced merchandising mix.
Net income in the fourth quarter advanced to $50.3 million, or 77 cents per diluted share, versus $49.9 million, or 76 cents per diluted share, in the year-previous period. Adjusted to exclude one-time events, net income was $48.7 million, or 74 cents per diluted share, versus $47 million, or 71 cents per diluted share, in the year-before quarter. Ollie’s missed a MarketBeat-published analyst consensus estimate by two cents per adjusted diluted share.
Comparable sales decreased 4.9% in the quarter year over year, an outcome the company attributed to a heavy focus on the toy category and a shorter holiday shopping season. Net sales increased 7.2% to $422.4 million in the year-prior quarter.
For the full fiscal year, net income grew to $141.1 million, or $2.14 per diluted share, versus $135 million, or $2.05 per diluted share, in the year previous. Adjusted net income was $129.1 million, or $1.96 per diluted share, versus $120.5 million, or $1.83 per diluted share, in the year before.
Comparable store sales decreased 2.1% year over year. Net sales totaled $1.41 billion, up 13.4% versus the year prior. Operating income gained 6% to $171.9 million.
John Swygert, Ollie’s president and CEO, said, “The fourth quarter proved to be a more challenging sales period than we had anticipated. Our significant investment in toys impacted the performance of other important merchandise categories. Had we been more balanced in our merchandise assortment, and had a longer holiday season, we believe we would have delivered sales more in line with our expectations. However, we successfully managed our gross margin and controlled our expenses in the period despite the softer than expected sales. New stores are the primary driver of our growth, and I’m pleased to report that we are increasing the number of stores we believe we can support on a national scale to 1,050, as indicated by an updated third-party feasibility study.”