Discount retailer Ollie’s Bargain Outlet posted a record first quarter, opening 25 new stores, many of them former Big Lots locations acquired earlier this year.
The company purchased 40 Big Lots leases in a bankruptcy auction in February, and early performance has exceeded expectations.
“These are warm boxes with a built-in discount shopper customer base, which was our hypothesis going in,” said CEO Eric van der Valk, noting that the former Big Lots stores are off to a “very strong start.”
Ollie’s reported a 13.4% year-over-year increase in net sales to $576.8 million, with comparable store sales up 2.6%. Net income rose to $47.6 million.
The retailer spent $27 million in capital expenditures during the quarter, primarily on new store openings and supply chain investments.
CFO Robert Helm said the Big Lots locations were generally well-maintained and required minimal build-out.
The company also gained access to product pipelines previously aligned with Big Lots, particularly in consumer packaged goods.
Van der Valk added that recent widespread store closures across the retail sector have freed up excess inventory, allowing Ollie’s to be “very nimble and selective” with its purchasing.
Meanwhile, Big Lots is reopening stores under new ownership by Variety Wholesalers, after filing for Chapter 11 bankruptcy last autumn.
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