Ollie's Bargain Outlet Holdings, Inc.

Good afternoon and welcome to the OLLI's Bargain Outlook conference call to discuss financial results in the first quarter of fiscal 2021. Currently, all participants are in a 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 part is not permitted without written authorization from OLLI's. And as a reminder, this call is being recorded. On the call today for management are John Swigert, President and Chief Executive Officer, and Jay Stad, Senior Vice President and Chief Financial Officer. I will 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 of 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 undue reliance on these forward-looking statements, which speak only as of today, and we undertake no obligation to update or revise them for any new information or future events. Factors that might 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'll be referring to certain non-GAAP financial measures on today's call that we believe may be important to investors to assess our operating performance. Reconciliations of the most closely comparable GAAP financial measures to the non-GAAP financial measures are included in our earnings release. With that, I will turn the call over to John.

Thanks, Jean, and hello, everyone. Thanks for joining our call today. We delivered another incredible quarter, and we are very excited about our strong start to the year. Our exceptional results were made possible by the remarkable execution and resilience of the entire Ollie's family. I want to express my gratitude for their tireless work to serve our customers while maintaining a safe shopping environment. Our overall performance was driven by robust sales growth reflecting our ability to capture opportunities in the marketplace. Productive new stores and strong comparable store sales fueled by great deal flow drove a 29.5% increase in our top line sales in the quarter and a 65.7% increase in our operating income. Comp store sales increased 18.8%, resulting in a two-year stack of 15.5%. The combination of great deals and macro tailwinds, such as a third round of government stimulus, fueled our very strong performance. Our top line strength was broad-based across our merchandise categories, with 19 of our 21 departments comping positive as the merchant team continues to deliver great values throughout the store for our customers. Our top performing departments included bed and bath, flooring, lawn and garden, electronics, books, and toys. We remain laser-focused on the execution of our plans, which begins with our amazing deals, deals that provide incredible values to our customers across all of our merchandise categories. Market disruption is driving strong deal flow, and we expect that to continue. Our buying team's deep and longstanding vendor partnerships give us a competitive advantage to gain preferred offerings of great deals, large and small. Our success, size, and scale is also fueling buying opportunities with a host of new vendors. We're well positioned to capture these opportunities with the know-how to take advantage of the great deals we see each and every day. And we have the dry powder in our open-to-buy and strong financial liquidity position to make it happen. In terms of on-hand inventory, we are comfortable with our Indian inventory position up 3.3% compared to last year. As I mentioned, deal flow remains as strong as ever, and there's lots of product flowing. We're well positioned to chase the business as best as dry powder gives us the flexibility to respond quickly to trends and capitalize on opportunistic purchases. This responsive know-how is our secret sauce. It drives our success and highlights the flexibility of our business model and nimble operational capabilities. Our new stores continue to knock it out of the park, once again performing above our expectations and demonstrating the predictability, portability, and consistency of our model. Earlier this month, we celebrated the grand opening of our 400th store in Springfield, Vermont. We are thrilled to hit the major milestone as our new stores are the engine of our growth and shareholder returns. Since the opening of our 400th store, we have entered into two additional states for a total of three new states this year, the states of Vermont, Missouri, and Kansas, expanding to 28 states in total. We're targeting 50 store openings this year, including two relocations, and we are well on our way. We see a tremendous runway for growth with the potential to expand our store base to over 1,050 locations nationwide. We currently expect a ceiling between 50 to 55 new stores per year. Our disciplined approach to delivering high return unit growth ensures that our team members perpetuate the Ollie's culture in each and every new store. We feel great about the significant white space and the continued availability of high-quality sites. The extreme value proposition of our business model very much supports our growth plans as the importance of value continues to gain traction. OLLI's Army continued to be a significant driver of our sales in the quarter, and membership just keeps growing. We grew the Army by 13.7%, with enrollment levels in the quarter greatly outpacing year-over-year store unit growth, and ended the period with over 11.9 million active members. The high retention rate of our OLLI's Army members, coupled with the strong growth of new customers, enable us to achieve record Army membership levels. Members shop us more frequently and spend more money with us, as demonstrated by the achievement of our highest ever sales penetration of over 78% of total sales in the quarter. These are highly productive customers with whom we look to build longstanding relationships through special benefits and, of course, great deals. We continue to see industry headwinds related to supply chain costs, shipping delays, and labor challenges that are impacting all retailers. We are doing what we can to mitigate cost pressures, and we remain comfortable with our current positioning. On the hiring front, we are working diligently to fill open positions in our distribution centers and stores and recognize we are operating in a highly competitive market. If these cost headwinds continue, we could experience some additional margin pressure, but we are confident in our ability to make adjustments and deliver strong bottom line results. We had another great quarter and a strong start to fiscal 2021. Looking at our second quarter, as a reminder, last year we delivered record sales and profits during this period following the onset of COVID as our stores were able to remain open. Our comp store sales grew 43% in the second quarter of 2020, with May by far being the strongest month in the quarter. Quarter to date, I am very pleased with our current trends and very excited about the momentum in our business. We are tracking ahead of our comp expectations and prior year comparisons ease considerably as we progress through the quarter. We continue to make important investments to support our future growth. Earlier this month, we announced the hiring of Eric Vandervalk to the position of Executive Vice President and Chief Operating Officer. Eric will lead the store operations, supply chain, real estate, and asset protection teams, and we are excited to have him on board. We believe that with his deep knowledge of the discount retail space and expertise across key functional areas, including store operations and supply chain, we'll be instrumental to the execution of our growth plans and help drive continued success. Welcome to the Ollies family, Eric. As always, we will focus our efforts on drivers we can control and keep doing what we do best, buy cheap and sell cheap, while maintaining discipline in how we operate the business. We believe we are well positioned to benefit from the continued disruption in the marketplace. I remain incredibly optimistic about our long-term opportunities as we continue to leverage the agility of our unique closeout business model and execute our strategic growth plans. Looking ahead, our long-term growth algorithm remains intact, and I am as bullish as ever about our business. This was a terrific start to the year for Ollie's, and I am very proud of the ongoing work of our team as we execute and persevere in this challenging environment. I want to thank our almost 9,600 team members for their incredible dedication and contributions to the business. As we say, we are Ollie's. I'll now hand the call over to Jay to take you through the financial results.