Ollie's Bargain Outlet Holdings, Inc.

Good afternoon and welcome to the OLLI's Bargain Outlet Conference call to discuss financial results for the fourth quarter and full year fiscal 2020. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. Please be advised that reproduction of this call in whole or in its part is not permitted without written authorization from OLLI's. And as a reminder, this call is being recorded. On the call today from management are John Swigert, President and Chief Executive Officer, and Jay Stas, Senior Vice President and Chief Financial Officer. I'll now turn the call over to Jean Fontana, Investor Relations, to get started. Please go ahead, ma'am.

Thank you, and good afternoon, everyone. A press release covering the company's financial results was issued this afternoon, and a copy of that press release can be found in the Investor Relations section on the company's website. I want to remind everyone that management's remarks on this call may contain forward-looking statements including, but not limited to, predictions, expectations, or estimates, and that actual results could differ materially from those mentioned on today's call. Any such items, including with respect to our future performance, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place any undue reliance on these forward-looking statements. which speak only as of today, and we are to take no obligation to update or revise them for any new information or future events. Factors that may affect future results may not be in our control and are discussed in our SEC filings. We encourage you to review these filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q, as well as our earnings release issued earlier today for a more detailed description of these factors. We will be referring to certain non-GAAP financial measures on today's call, such as adjusted EBITDA, adjusted net income, and adjusted net income per diluted share that we would believe may be important to investors to assess our operating performance. Reconciliations of the most closely comparable GAAP financial measures to these non-GAAP financial measures are included in our earnings list. With that, I will turn the call over to John.

Thanks, Jean, and hello, everyone. Thanks for joining our call today. We delivered another record-breaking quarter to finish fiscal 2020, capping off the best full-year results and our 38-year history. This year, we surpassed $1.8 billion in top-line sales and increased the justity of the DA by over 56% to $300 million. These results were achieved in a year of unprecedented challenges and demonstrates the strength of our business model and the extraordinary execution of our team. They truly went above and beyond leveraging many years of experience and longstanding relationships in the closeout industry to share the very best deals for our customers. This responsiveness and know-how is our secret sauce. It drives our success and shows the flexibility of our business model and nimble operational capabilities. I would like to express my sincere thanks to the entire Ollies family who demonstrated their dedication and resiliency during these challenging times. Since the outset of the pandemic, our priorities have been consistent. Ensure the health and safety of our team members and customers, support our communities, and provide our customers with a steady flow of extraordinary deals and items they need. Great deal flow across all departments, productive new stores, and strong convertible store sales drove a 22% increase in our top line in the fourth quarter. Comp store sales increased 8.8%. As you may recall, our comp trends were running in the low single digits early in the quarter, and we saw momentum build as we progressed through the holiday season and into January. We continued to benefit from spending trends that worked in our favor with a shift in demand for merchandise that appealed to a stay-at-home lifestyle. In January, we believe the second round of government stimulus also fueled some of the comp sales growth. Our top line growth combined with our gross margin expansion in tight expense control drove adjusted net income growth of 31% in the quarter. We are very happy with the broad-based strength across our merchandise categories with over two-thirds of our departments comping positive. Our top performing categories included bed and bath, housewares, flooring, food, health and beauty aids, and seasonal. We executed the OLLI's formula, buy cheap and sell cheap, and we had the right products at a great value. Deal flow remains very strong and we are excited about what we are seeing in the marketplace with great deals presented to us every day. The merchant team continues to leverage longstanding vendor partnerships and establish new vendor relationships to capture incredible deals across all merchandise categories. Our ability to capitalize on these opportunities in the current retail landscape has never been better as we continue to leverage our increasing scale. We have a proven ability to handle large deals from our suppliers and an exceptionally strong liquidity position. We are pleased with our current inventory position, ending the quarter with inventories up 5.5% compared to last year. Our continued sales velocity has us chasing the business a little, but as I mentioned, deal flow remains as strong as ever. As you heard me say before, our approach to maintaining dry powder and our open-to-buy gives us the flexibility to ramp up receipts and opportunistic purchases. We can also respond quickly to changing consumer demands. All of this plays to our strength, our aggressiveness, and agility as an organization. The strong deal flow is always driving great new store performance. New stores once again delivered sales above our expectations with our recent store classes across new states and new markets outperforming our model. We opened a total of 46 new stores in 2020, and I am very proud of the team's ability to execute these projects despite the added complexities of operating and opening during the pandemic. New stores remain the primary driver of our growth, and we see great opportunities to continue to expand our footprint in 2021 and beyond. We're targeting 50 store openings this year, including three to four relocations, and are planning to introduce the Ollie's brand to three new states. Kansas, Missouri, and Vermont. So far this year, we've opened seven stores, including one relocation, and we are very pleased with the early results. We have a tremendous runway for growth with the potential to expand our store base to over 1,050 locations nationwide. We feel good about the significant white space and the availability of high-quality sites. The value-driven consumer is clearly not going away. By most measures, value is gaining in importance. With this in mind, we feel very confident in our runway for growth. OLLI's Army continued to be a significant sales driver in the fourth quarter and membership keeps growing. We ended the period with over 11.6 million active members, a 13.6% increase over the prior year with growth in the membership levels outpacing store growth. Army members shop our stores more often and drive a substantially larger basket. Ali's Army sales comprised of over 75% of our total sales in both the quarter and the year, representing the highest sales penetration ever. Clearly, these are very important customers with whom we look to build long-lasting relationships through special benefits and, of course, great deals. As we shared with you last quarter, we are in the early stages of enhancing our marketing programs and redeploying dollars to optimize their effectiveness. Our focus is twofold, deepen engagement with existing customers and attract new customers. We are pleased with what we are seeing so far and we will continue to refine our efforts, particularly regarding new digital initiatives in fiscal 2021. We are very excited about our results for the quarter and the continued momentum of the business. Comps for sales growth is tracking in the high single digits quarter to date. We are pleased with our current sales trends, and we believe we are well positioned to deliver solid first quarter results. As a reminder, we anniversary the onset of last year's COVID demand surge in mid-April, and it's from that point forward that we'll be up against very challenging year-over-year comparisons. Like everyone, we look forward to putting the pandemic behind us but we undoubtedly will be dealing with opportunities and challenges in fiscal 21 that, like last year, will have varying degrees of impact on the economy, consumers, and our business. No matter what comes, we're going to keep doing what we do best, buy and sell good stuff cheap, while maintaining discipline in how we operate the business. As Mark would say, we are hitting all our marks. We are offering incredible deals, controlling expenses, and opening successful new stores. Simply said, our team knows how to execute our strategy and deliver results in both good and bad economic periods, and we believe we are well-positioned to benefit from the continued disruption in the marketplace. Looking ahead, our long-term growth algorithm remains intact, and I am bullish as ever about our business. We delivered unbelievable results in the quarter and the year, and I could not be prouder to be part of this team. I want to thank our almost 9,500 team members for their incredible dedication and contributions to the business, particularly during these challenging times. As we say, we are OLLIES. I'll now hand the call over to Jay to take you through our financial results.