10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 5, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Ollie’s Bargain Outlet Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

001-37501	80-0848819
(Commission File Number)	(IRS Employer Identification No.)

6295 Allentown Boulevard Suite 1 Harrisburg, Pennsylvania	17112
(Address of principal executive offices)	(Zip Code)

(717) 657-2300

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to

such filing requirements for the past 90 days.    Yes   ☒       No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ☒     No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☒ Accelerated filer  ☐ Non-accelerated filer  ☐ (Do not check if a smaller reporting company) Smaller reporting company  ☐ Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐     No   ý

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of June 6, 2018 was 62,348,159.

INDEX

PART I - FINANCIAL INFORMATION		Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1
	Unaudited Condensed Consolidated Statements of Income for the thirteen weeks ended May 5, 2018 and April 29, 2017	1
	Unaudited Condensed Consolidated Balance Sheets as of May 5, 2018, April 29, 2017 and February 3, 2018	2
	Unaudited Condensed Consolidated Statements of Stockholders' Equity for the thirteen weeks ended May 5, 2018 and April 29, 2017	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the thirteen weeks ended May 5, 2018 and April 29, 2017	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

ITEM 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

OLLIE'S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

	Thirteen weeks ended
	May 5, 2018		April 29, 2017
Net sales	$	275,739	$	227,602
Cost of sales		162,863		134,667
Gross profit		112,876		92,935
Selling, general and administrative expenses		72,364		61,731
Depreciation and amortization expenses		2,763		2,272
Pre-opening expenses		1,764		1,598
Operating income		35,985		27,334
Interest expense, net		538		1,334
Loss on extinguishment of debt		100		397
Income before income taxes		35,347		25,603
Income tax expense		4,893		6,637
Net income	$	30,454	$	18,966
Earnings per common share:
Basic	$	0.49	$	0.31
Diluted	$	0.46	$	0.29
Weighted average common shares outstanding:
Basic		62,169		60,880
Diluted		65,624		64,389

See accompanying notes to the condensed consolidated financial statements.

1

OLLIE'S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

Assets	May 5, 2018			April 29, 2017			February 3, 2018
Current assets:
Cash and cash equivalents	$	27,614		$	33,720		$	39,234
Inventories		276,040			246,630			255,185
Accounts receivable		414			330			1,271
Prepaid expenses and other assets		8,132			3,312			7,986
Total current assets		312,200			283,992			303,676
Property and equipment, net of accumulated depreciation of  $53,276, $41,144 and $50,076, respectively		55,647			47,061			54,888
Goodwill		444,850			444,850			444,850
Trade name and other intangible assets, net of accumulated amortization of $1,909, $1,574 and $1,825,  respectively		232,555			232,890			232,639
Other assets		2,084			2,338			2,146
Total assets	$	1,047,336		$	1,011,131		$	1,038,199
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	10,143		$	6,340		$	10,158
Accounts payable		75,420			62,935			74,206
Income taxes payable		10,858			11,919			6,035
Accrued expenses and other		47,067			39,939			46,327
Total current liabilities		143,488			121,133			136,726
Revolving credit facility		-			-			-
Long-term debt		13,926			121,905			38,835
Deferred income taxes		57,094			88,360			59,073
Other long-term liabilities		7,113			5,259			7,103
Total liabilities		221,621			336,657			241,737
Stockholders’ equity:
Preferred stock - 50,000 shares authorized at $0.001 par value; no shares issued		-			-			-
Common stock - 500,000 shares authorized at $0.001 par value; 62,358, 61,130 and 62,007 shares issued, respectively		62			61			62
Additional paid-in capital		587,857			570,108			583,467
Retained earnings		237,882			104,391			213,019
Treasury - common stock, at cost; 9 shares		(86	)		(86	)		(86	)
Total stockholders’ equity		825,715			674,474			796,462
Total liabilities and stockholders’ equity	$	1,047,336		$	1,011,131		$	1,038,199

See accompanying notes to the condensed consolidated financial statements.

2

OLLIE'S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

	Common stock					Treasury stock						Additional paid-in			Retained			Total stockholders’
	Shares			Amount		Shares			Amount			capital			earnings			equity
Balance as of January 28, 2017		60,756		$	61		(9	)	$	(86	)	$	565,861		$	85,425		$	651,261
Stock-based compensation expense		-			-		-			-			1,911			-			1,911
Proceeds from stock options exercised		355			-		-			-			2,555			-			2,555
Vesting of restricted stock		26			-		-			-			-			-			-
Common shares withheld for taxes		(7	)		-		-			-			(219	)		-			(219	)
Net income		-			-		-			-			-			18,966			18,966
Balance as of April 29, 2017		61,130		$	61		(9	)	$	(86	)	$	570,108		$	104,391		$	674,474
Balance as of February 3, 2018		62,007		$	62		(9	)	$	(86	)	$	583,467		$	213,019		$	796,462
Cumulative effect of adopting ASU 2014-09 (Note 2)		-			-		-			-			-			(5,591	)		(5,591	)
Stock-based compensation expense		-			-		-			-			1,600			-			1,600
Proceeds from stock options exercised		312			-		-			-			3,492			-			3,492
Vesting of restricted stock		51			-		-			-			-			-			-
Common shares withheld for taxes		(12	)		-		-			-			(702	)		-			(702	)
Net income		-			-		-			-			-			30,454			30,454
Balance as of May 5, 2018		62,358		$	62		(9	)	$	(86	)	$	587,857		$	237,882		$	825,715

See accompanying notes to the condensed consolidated financial statements.

3

OLLIE'S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Thirteen weeks ended
	May 5, 2018			April 29, 2017
Cash flows from operating activities:
Net income	$	30,454		$	18,966
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		3,309			2,775
Amortization of debt issuance costs		128			180
Amortization of original issue discount		2			5
Loss on extinguishment of debt		100			397
Gain on sale of assets		(6	)		(8	)
Amortization of intangibles		84			87
Deferred income tax benefit		(57	)		(864	)
Deferred rent expense		128			183
Stock-based compensation expense		1,600			1,911
Changes in operating assets and liabilities:
Inventories		(20,855	)		(36,523	)
Accounts receivable		857			(29	)
Prepaid expenses and other assets		(188	)		370
Accounts payable		1,500			11,746
Income taxes payable		4,823			7,371
Accrued expenses and other liabilities		(6,531	)		(4,648	)
Net cash provided by operating activities		15,348			1,919
Cash flows from investing activities:
Purchases of property and equipment		(4,719	)		(2,953	)
Proceeds from sale of property and equipment		11			8
Net cash used in investing activities		(4,708	)		(2,945	)
Cash flows from financing activities:
Borrowings on revolving credit facility		287,750			236,389
Repayments on revolving credit facility		(287,750	)		(236,389	)
Repayments on term loan and capital leases		(25,050	)		(66,273	)
Proceeds from stock option exercises		3,492			2,555
Common shares withheld for taxes		(702	)		(219	)
Net cash used in financing activities		(22,260	)		(63,937	)
Net decrease in cash and cash equivalents		(11,620	)		(64,963	)
Cash and cash equivalents at the beginning of the period		39,234			98,683
Cash and cash equivalents at the end of the period	$	27,614		$	33,720
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	421		$	1,152
Income taxes	$	127		$	130
Non-cash investing activities:
Accrued purchases of property and equipment	$	1,279		$	1,518

See accompanying notes to the condensed consolidated financial statements.

4

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

(1) Organization and Summary of Significant Accounting Policies

(a) Description of Business

Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries (collectively referenced to as the “Company” or “Ollie’s”) principally buys overproduced, overstocked, and closeout merchandise from manufacturers, wholesalers and other retailers. In addition, the Company augments its name-brand closeout deals with directly sourced private label products featuring names exclusive to Ollie’s in order to provide consistently value-priced goods in select key merchandise categories.

Since its first store opened in 1982, the Company has grown to 276 retail locations in 21 states as of May 5, 2018. Ollie’s Bargain Outlet retail locations are located in Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia and West Virginia.

(b) Fiscal Year

Ollie’s follows a 52/53-week fiscal year, which ends on the Saturday nearer to January 31 of the following year.  References to the thirteen weeks ended May 5, 2018 and April 29, 2017 refer to the thirteen weeks from February 4, 2018 to May 5, 2018 and from January 29, 2017 to April 29, 2017, respectively.  References to “2017” refer to the fiscal year ended February 3, 2018, which consisted of a 53-week period.  References to “2018” refer to the fiscal year ending February 2, 2019, which consists of a 52-week period.

(c) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to present fairly the Company’s results of operations, financial condition, and cash flows for all periods presented. The condensed consolidated balance sheets as of May 5, 2018 and April 29, 2017, and the condensed consolidated statements of income, stockholders’ equity and cash flows for the thirteen weeks ended May 5, 2018 and April 29, 2017 have been prepared by the Company and are unaudited. The Company’s business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of operating results for 2018 or any other period. All intercompany accounts, transactions, and balances have been eliminated in consolidation.

The Company’s balance sheet as of February 3, 2018, presented herein, has been derived from the audited balance sheet included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2018 (“Annual Report”), but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the financial statements for 2017 and footnotes thereto included in the Annual Report.

For purposes of the disclosure requirements for segments of a business enterprise, it has been determined that the Company is comprised of one operating segment.

(d) Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

5

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

(e) Fair Value Disclosures

Fair value is defined as the price which the Company would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three‑level hierarchy used in measuring fair value, as follows:

· Level 1 inputs are quoted prices available for identical assets and liabilities in active markets.

· Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs which are observable or can be corroborated by observable market data.

· Level 3 inputs are less observable and reflect the Company’s assumptions.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, its revolving credit facility and its term loan facility. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of their short maturities. The carrying amount of the revolving credit facility and term loan facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions.

(f) Recently Issued Accounting Pronouncements

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and lease liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. Substantially all of the Company’s store locations and distribution centers are subject to operating lease arrangements. The Company is currently evaluating the impact of the adoption of this new standard on its consolidated financial statements and related disclosures, and anticipates it will result in significant right-of-use assets and related liabilities on its consolidated balance sheets.

(2) Net Sales

Ollie’s recognizes retail sales in its stores when merchandise is sold and the customer takes possession of merchandise.  Also, included in net sales, is revenue allocated to certain redeemed discounts earned via the Ollie’s Army loyalty program and gift card breakage.  Net sales are presented net of returns and sales tax. The Company provides an allowance for estimated retail merchandise returns based on prior experience.

Adoption of ASU 2014-09, Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than present standards.

6

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

The Company adopted ASU 2014-09 as of February 4, 2018 using the modified retrospective transition method.  Results for reporting periods beginning after February 4, 2018 are presented pursuant to the requirements of the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under prior guidance.

The Company recorded a net reduction to the opening balance of retained earnings of $5.6 million as of February 4, 2018 due to the cumulative impact of adopting ASU 2014-09, with the impact primarily related to the changes in revenue recognition associated with the Company’s customer loyalty program and gift card breakage.

The cumulative effect of changes to the Company’s consolidated February 4, 2018 balance sheet for the adoption of ASU 2014-09 was as follows (in thousands):

	Balance at February 3, 2018		Adjustments Due to ASU 2014-09			Balance at February 4, 2018
Assets
Inventories	$	255,185	$	339		$	255,524
Liabilities
Accrued expenses and other		46,327		7,853			54,180
Deferred income taxes		59,073		(1,923	)		57,150
Equity
Retained earnings		213,019		(5,591	)		207,428

The Company has determined the adoption of ASU 2014-09 has changed the presentation for the following:

· Revenue is deferred for the Ollie’s Army loyalty program where members accumulate points that can be redeemed for discounts on future purchases. The Company has determined it has an additional performance obligation to Ollie’s Army members at the time of the initial transaction. The Company allocates the transaction price to the initial transaction and the discount awards based upon its relative standalone selling price, which considers historical redemption patterns for the award. Revenue is recognized as those discount awards are redeemed. Discount awards which are issued upon the achievement of specified point levels expire 90 days from the date of issuance.  At the end of each fiscal period, unredeemed discount awards and accumulated points to earn a future discount award, are reflected as a liability.  Discount awards are combined in one homogeneous pool and are not separately identifiable.  Therefore, the revenue recognized consisted of discount awards redeemed that were included in the deferred revenue balance at the beginning of the period as well as discount awards issued during the current period.  The following table is a reconciliation of the liability related to this program (in thousands):

Balance at February 3, 2018	$	8,321
Revenue deferred		2,575
Revenue recognized		(2,364	)
Balance at May 5, 2018	$	8,532

7

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

· Gift card breakage for gift card liabilities not subject to escheatment is recognized as revenue in proportion to the redemption of gift cards rather than when redemption of the gift card was considered remote.  Ollie’s gift cards do not expire.  The rate applied to redemptions is based upon a historical breakage rate.  Gift cards are combined in one homogenous pool and are not separately identifiable.  Therefore, the revenue recognized consisted of gift cards that were included in the liability at the beginning of the period as well as gift cards that were issued during the period.  The following table is a reconciliation of the gift card liability (in thousands):

Balance at February 3, 2018	$	1,223
Gift card issuances		908
Gift card redemption and breakage		(990	)
Balance at May 5, 2018	$	1,141

· Sales return allowance is recorded on a gross basis on the condensed consolidated balance sheet as a refund liability and an asset for recovery rather than as a net liability.  The allowance for estimated retail merchandise returns is based on prior experience.

The adoption of ASU 2014-09 did not have a material impact on the Company’s condensed consolidated income statement and statement of cash flows for the thirteen weeks ended May 5, 2018.  As a result of the adoption of ASU 2014-09, the Company’s balance sheet at May 5, 2018 reflected an additional liability of $8.5 million related to the Ollie’s Army loyalty program which would not have been recorded prior to adoption.  Other changes to the condensed consolidated balance sheet at May 5, 2018 were not significant.

(3) Earnings per Common Share

Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding after giving effect to the potential dilution, if applicable, from the assumed exercise of stock options into shares of common stock as if those stock options were exercised and the assumed lapse of restrictions on restricted stock units.

The following table summarizes those effects for the diluted earnings per common share calculation (in thousands, except per share amounts):

8

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

	Thirteen weeks ended
	May 5, 2018		April 29, 2017
Net income	$	30,454	$	18,966
Weighted average number of common shares outstanding – Basic		62,169		60,880
Incremental shares from the assumed exercise of outstanding stock options and vesting of restricted stock units		3,455		3,509
Weighted average number of common shares outstanding - Diluted		65,624		64,389
Earnings per common share – Basic	$	0.49	$	0.31
Earnings per common share - Diluted	$	0.46	$	0.29

The effect of the weighted average assumed exercise of stock options outstanding totaling 124,738 and 195,626 for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively, were excluded from the calculation of diluted weighted average common shares outstanding because the effect would have been antidilutive.

The effect of weighted average non-vested restricted stock units outstanding totaling 26,333 and 0 for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively, were excluded from the calculation of diluted weighted average common shares outstanding because the effect would have been antidilutive.

(4) Accrued Expenses and Other

Accrued expenses and other consists of the following (in thousands):

	May 5, 2018		April 29, 2017		February 3, 2018
Deferred revenue	$	8,532	$	-	$	-
Compensation and benefits		6,910		8,235		14,181
Sales and use taxes		4,721		3,448		3,865
Freight		4,434		6,943		3,836
Insurance		3,918		2,892		2,768
Real estate related		3,772		3,446		4,019
Advertising		3,339		3,849		5,523
Other		11,441		11,126		12,135
	$	47,067	$	39,939	$	46,327

9

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

(5) Debt Obligations and Financing Arrangements

Long-term debt consists of the following (in thousands):

	May 5, 2018			April 29, 2017			February 3, 2018
Term loan, net	$	23,655		$	127,968		$	48,530
Capital leases		414			277			463
Total debt		24,069			128,245			48,993
Less: current portion		(10,143	)		(6,340	)		(10,158	)
Long-term debt	$	13,926		$	121,905		$	38,835

On January 29, 2016, the Company refinanced its existing senior secured credit facility with the proceeds of its new Credit Facilities (as defined below).  The new credit facilities consist of a $200.0 million term loan (“Term Loan Facility”) and a $100.0 million revolving credit facility (“Revolving Credit Facility”, and together with the Term Loan Facility, the “Credit Facilities”) which includes a $25.0 million sub-facility for letters of credit and a $25.0 million sub-facility for swingline loans.

The interest rates for the Credit Facilities are not subject to a floor and are calculated as the higher of the Prime Rate, the Federal Funds Effective Rate plus 0.50% or the Eurodollar Rate plus 1.0%, plus the Applicable Margin, or, for Eurodollar Loans, the Eurodollar Rate plus the Applicable Margin. The Applicable Margin will vary from 0.75% to 1.25% for a Base Rate Loan and 1.75% to 2.25% for a Eurodollar Loan, based on reference to the total leverage ratio. The Credit Facilities mature on January 29, 2021.

As of May 5, 2018, the Term Loan Facility is subject to amortization with principal payable in quarterly installments of $2.5 million to be made on the last business day of each fiscal quarter prior to maturity.  The remaining initial aggregate advances under the Term Loan Facility are payable at maturity.

The Company made voluntary prepayments under the Term Loan Facility totaling $25.0 million and $65.0 million during the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.  In connection with these prepayments, $0.1 million and $0.3 million of debt issuance cost and $7,000 and $0.1 million of original issue discount were accelerated and included in loss on extinguishment of debt for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.  In accordance with the terms of the Term Loan Facility, prepayments were applied against the remaining scheduled installment payments of principal due under the Term Loan Facility in direct order of maturity.  As a result, the Company is no longer obligated to make the scheduled installment payments of principal; however, the Company currently intends to continue to make these payments and therefore has classified such payments as current portion of long-term debt in the condensed consolidated balance sheet.

Under the terms of the Revolving Credit Facility, as of May 5, 2018, the Company could borrow up to 90.0% of the most recent appraised value (valued at cost, discounted for the current net orderly liquidation value) of its eligible inventory, as defined, up to $100.0 million.

As of May 5, 2018, Ollie’s had $23.7 million of outstanding indebtedness under the Term Loan Facility and no outstanding borrowings under the Revolving Credit Facility, with $95.3 million of borrowing availability, letter of credit commitments of $4.4 million and $0.3 million of rent reserves.  The interest rate on the outstanding borrowings under the Term Loan Facility was 1.75% plus the 30-day Eurodollar Rate, or 3.65%.  The Revolving Credit Facility also contains a variable unused line fee ranging from 0.250% to 0.375% per annum.

10

OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

As of May 5, 2018 and April 29, 2017, the amounts outstanding under the Term Loan Facility are net of unamortized original issue discount of $7,000 and $0.1 million and deferred financing fees of $0.1 million and $0.7 million in each respective period.

The Credit Facilities are collateralized by the Company’s assets and equity and contain financial covenants, as well as certain business covenants, including restrictions on dividend payments, which the Company must comply with during the term of the agreements. The financial covenants include a consolidated fixed charge coverage ratio test of at least 1.1 to 1.0 and a total leverage test of no greater than 3.5 to 1.0. The Company was in compliance with all terms of the Credit Facilities during the thirteen weeks ended May 5, 2018.

The provisions of the Credit Facilities restrict all of the net assets of the Company’s consolidated subsidiaries, which constitutes all of the net assets on the Company’s consolidated balance sheet as of May 5, 2018, from being used to pay any dividends or make other restricted payments to the Company without prior written consent from the financial institutions that are a party to the Credit Facilities, subject to certain exceptions.

(6) Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for discrete events occurring in a particular period. The effective tax rates for the thirteen weeks ended May 5, 2018 and April 29, 2017 were 13.8% and 25.9%, respectively. The effective tax rate was lower for the thirteen weeks ended May 5, 2018 primarily as a result of the provisions of the recently enacted Tax Cuts and Jobs Act, which, among other things, permanently lowered the federal corporate tax rate to 21% from the prior maximum rate of 35%, effective for tax years including or commencing January 1, 2018.  In addition, the thirteen weeks ended May 5, 2018 and April 29, 2017 included a discrete tax benefit of $3.9 million and $3.2 million, respectively, due to excess tax benefits related to stock-based compensation.

(7) Commitments and Contingencies

The Company commenced five new store leases during the thirteen weeks ended May 5, 2018.  The fully executed leases have initial terms of approximately seven years with options to renew for three to four successive five-year periods.  The initial terms of these new store leases have future minimum lease payments totaling approximately $6.0 million.

From time to time the Company may be involved in claims and legal actions that arise in the ordinary course of its business. The Company cannot predict the outcome of any litigation or suit to which it is a party.  However, the Company does not believe that an unfavorable decision of any of the current claims or legal actions against it, individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity or capital resources.

(8) Equity Incentive Plans

During 2012, Ollie’s established an equity incentive plan (the “2012 Plan”), under which stock options were granted to executive officers and key employees as deemed appropriate under the provisions of the 2012 Plan, with an exercise price at the fair value of the underlying stock on the date of grant. The vesting period for options granted under the 2012 Plan is five years (20% ratably per year). Options granted under the 2012 Plan are subject to employment for vesting, expire 10 years from the date of grant and are not transferable other than upon death. As of July 15, 2015, the date of the pricing of the Company’s initial public offering, no additional equity grants will be made under the 2012 Plan.

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OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

In connection with its initial public offering, the Company adopted the 2015 equity incentive plan (the “2015 Plan”) pursuant to which the Company’s Board of Directors may grant stock options, restricted shares or other awards to employees, directors and consultants. The 2015 Plan allows for the issuance of up to 5,250,000 shares. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions as determined by the Board of Directors or the Compensation Committee of the Board. The Company uses authorized and unissued shares to satisfy share award exercises. As of May 5, 2018, there were 3,458,829 shares available for grant under the 2015 Plan.

Stock Options

The exercise price for stock options is determined at the fair value of the underlying stock on the date of grant. The vesting period for awards granted under the 2015 Plan is generally set at four years (25% ratably per year). Awards are subject to employment for vesting, expire 10 years from the date of grant, and are not transferable other than upon death.

A summary of the Company’s stock option activity and related information follows for the thirteen weeks ended May 5, 2018 (in thousands, except share and per share amounts):

	Number of options			Weighted average exercise price		Weighted average remaining contractual term (years)
Outstanding at February 3, 2018		4,458,387		$	11.65
Granted		273,419			58.79
Forfeited		(9,220	)		31.28
Exercised		(311,776	)		11.20
Outstanding at May 5, 2018		4,410,810			14.57		6.1
Exercisable at May 5, 2018		2,797,229			8.86		5.1

The Company uses the Black-Scholes option pricing model to value its stock option awards.  The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The expected life of stock options was estimated using the “simplified method,” as the Company has no historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants.  The simplified method is based on the average of the vesting tranches and the contractual life of each grant.  For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of option grants.  The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option.

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OLLIE’S BARGAIN OUTLET HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

May 5, 2018 and April 29, 2017

(Unaudited)

The weighted average grant date fair value per option for options granted during the thirteen weeks ended May 5, 2018 and April 29, 2017 was $18.73 and $10.56, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model that used the weighted average assumptions in the following table:

	Thirteen weeks ended
	May 5, 2018			April 29, 2017
Risk-free interest rate		2.70	%		2.20	%
Expected dividend yield		—			—
Expected term (years)	6.25 years			6.25 years
Expected volatility		25.84	%		28.36	%

Restricted Stock Units

Restricted stock units (“RSUs”) are issued at a value not less than the fair market value of the common stock on the date of the grant. RSUs granted to date vest ratably over three or four years or cliff vest in one or four years. Awards are subject to employment for vesting and are not transferable other than upon death.

A summary of the Company’s RSU activity and related information for the thirteen weeks ended May 5, 2018 is as follows:

	Number of shares			Weighted average grant date fair value
Non-vested balance at February 3, 2018		207,346		$	26.15
Granted		62,869			58.76
Vested		(50,645	)		26.09
Non-vested balance at May 5, 2018		219,570			35.50

Stock-Based Compensation Expense

The compensation cost for stock options and RSUs which have been recorded within selling, general and administrative expenses related to the Company’s equity incentive plans was $1.6 million and $1.9 million for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

As of May 5, 2018 there was $18.7 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 2.9 years.  Compensation costs related to awards are recognized using the straight-line method.

(9) Transactions with Related Parties

The Company has entered into five non-cancelable operating leases with related parties for office and store locations. Ollie’s made $0.4 million and $0.3 million in rent payments to such related parties during each of the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and related notes of Ollie’s Bargain Outlet Holdings, Inc. included in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on April 4, 2018. As used in this Quarterly Report on Form 10-Q, except where the context otherwise requires or where otherwise indicated, the terms “Ollie’s,” the “Company,”  “we,” “our” and “us” refer to Ollie’s Bargain Outlet Holdings, Inc.

We operate on a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday nearer to January 31 of the following year. References to “2018” refer to the 52-week period from February 4, 2018 to February 2, 2019. References to “2017” refer to the 53-week period from January 29, 2017 to February 3, 2018. The fiscal quarters or “first quarter” ended May 5, 2018 and April 29, 2017 refer to the 13 weeks from February 4, 2018 to May 5, 2018 and from January 29, 2017 to April 29, 2017, respectively.  Historical results are not necessarily indicative of the results to be expected for any future period and results for any interim period may not necessarily be indicative of the results that may be expected for a full year.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Forward-looking statements can be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, prospects, financial performance and industry outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including recently enacted tax legislation, and the following: our failure to adequately procure and manage our inventory or anticipate consumer demand; changes in consumer confidence and spending; risks associated with intense competition; our failure to open new profitable stores, or successfully enter new markets, on a timely basis or at all; our failure to hire and retain key personnel and other qualified personnel; our inability to obtain favorable lease terms for our properties; the loss of, or disruption in the operations of, our centralized distribution centers; fluctuations in comparable store sales and results of operations, including on a quarterly basis; risks associated with our lack of operations in the growing online retail marketplace; our inability to successfully implement our marketing, advertising and promotional efforts; the seasonal nature of our business; risks associated with the timely and effective deployment and protection of computer  networks and other electronic systems; the risks associated with doing business with international manufacturers; changes in government regulations, procedures and requirements; and our ability to service our indebtedness and to comply with our financial covenants together with the other factors set forth under “Item 1A - Risk Factors” contained herein and in our filings with the SEC, including our Annual Report on Form 10-K. Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date on which such statement is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Ollie’s undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.  You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

Overview

Ollie’s is a highly differentiated and fast-growing, extreme value retailer of brand name merchandise at drastically reduced prices.  Known for our assortment of products offered as “Good Stuff Cheap,” we offer customers a broad selection of brand name products, including housewares, food, books and stationery, bed and bath, flooring, toys and hardware.  Our differentiated go-to market strategy is characterized by a unique, fun and engaging treasure hunt shopping experience, compelling customer value proposition and witty, humorous in-store signage and advertising campaigns.

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Our Growth Strategy

Since 1982, when we were founded, we have grown organically by backfilling in existing marketplaces and leveraging our brand awareness, marketing and infrastructure to expand into new markets in contiguous states.  In 2003, Mark Butler, our co-founder, assumed his current role as President and Chief Executive Officer.  Under Mr. Butler’s leadership, we expanded from 28 stores located in three states at the end of fiscal year 2003 to 276 stores located in 21 states as of May 5, 2018.

Our stores are supported by two distribution centers, one in York, PA and one in Commerce, GA, which we believe can support between 350 to 400 stores.  We have invested in our associates, infrastructure, distribution network and information systems to allow us to continue to rapidly grow our store footprint, including:

· growing our merchant buying team to increase our access to brand name/closeout merchandise;

· adding members to our senior management team;

· expanding the capacity of our two distribution centers to their current 1.6 million square feet; and

· investing in information technology, accounting, and warehouse management systems.

Our business model has produced consistent and predictable store growth over the past several years, during both strong and weaker economic cycles.  We plan to continue to enhance our competitive positioning and drive growth in sales and profitability by executing on the following strategies:

· growing our store base;

· increasing our offerings of great bargains; and

· leveraging and expanding Ollie’s Army, our customer loyalty program.

We have a proven portable, flexible, and highly profitable store model that has produced consistent financial results and returns.  Our new store model targets a store size between 25,000 to 35,000 square feet and an average initial cash investment of approximately $1.0 million, which includes store fixtures and equipment, store-level and distribution center inventory (net of payables) and pre-opening expenses.  We target new stores sales of approximately $3.9 million.

While we are focused on driving comparable store sales and managing our expenses, our revenue and profitability growth will primarily come from opening new stores.  The core elements of our business model are procuring great deals, offering extreme values to our customers and creating consistent, predictable store growth and margins.  In addition, our new stores generally open strong, immediately contributing to the growth in net sales and profitability of our business.  We plan to achieve continued net sales growth, including comparable stores sales, by adding additional stores to our store base and by continuing to provide quality merchandise at a value for our customers as we scale and gain more access to purchase directly from major manufacturers.  We also plan to leverage and expand our Ollie’s Army database marketing strategies.  In addition, we plan to continue to manage our selling, general and administrative expenses by continuing to make process improvements and by maintaining our standard policy of reviewing our operating costs.

Our ability to grow and our results of operations may be impacted by additional factors and uncertainties, such as consumer spending habits, which are subject to macroeconomic conditions and changes in discretionary income.  Our customers’ discretionary income is primarily impacted by gas prices, wages and consumer trends and preferences, which fluctuate depending on the environment. The potential consolidation of our competitors or other changes in our competitive landscape could also impact our results of operations or our ability to grow, even though we compete with a broad range of retailers.

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Our key competitive advantage is our direct buying relationships with many major manufacturers, wholesalers, distributors, brokers and retailers for our brand name and closeout products and unbranded goods.  We also augment our product mix with private label brands.  As we continue to grow, we believe our increased scale will provide us with even greater access to brand name and closeout products as major manufacturers seek a single buyer to acquire an entire deal.

How We Assess the Performance of Our Business and Key Line Items

We consider a variety of financial and operating measures in assessing the performance of our business.  The key measures we use are number of new stores, net sales, comparable store sales, gross profit and gross margin, selling, general and administrative expenses (“SG&A”), pre-opening expenses, operating income, EBITDA and Adjusted EBITDA.

Number of New Stores

The number of new stores reflects the number of stores opened during a particular reporting period.  Before we open new stores, we incur pre-opening expenses described below under “Pre-Opening Expenses” and we make an initial investment in inventory.  We also make initial capital investments in fixtures and equipment, which we amortize over time.

We opened eight new stores during the thirteen weeks ended May 5, 2018.  We expect new store growth to be the primary driver of our sales growth.  Our initial lease terms are typically between five to seven years with options to renew for two or three successive five-year periods.  Our portable and predictable real estate model focuses on backfilling existing markets and entering new markets in contiguous states.  Our new stores often open with higher sales levels as a result of greater advertising and promotional spend in connection with grand opening events, but decline shortly thereafter to our new store model levels.

Net Sales

Ollie’s recognizes retail sales in its stores when merchandise is sold and the customer takes possession of merchandise.  Also, included in net sales in 2018, is revenue allocated to certain redeemed discounts earned via the Ollie’s Army loyalty program and gift card breakage.  Net sales are presented net of returns and sales tax.  Net sales consist of sales from comparable stores and non-comparable stores, described below under “Comparable Store Sales.”  Growth of our net sales is primarily driven by expansion of our store base in existing and new markets.  As we continue to grow, we believe we will have greater access to brand name and closeout merchandise and an increased deal selection, resulting in more potential offerings for our customers.  Net sales are impacted by product mix, merchandise mix and availability, as well as promotional activities and the spending habits of our customers. Our broad selection of offerings across diverse product categories supports growth in net sales by attracting new customers, which results in higher spending levels and frequency of shopping visits from our customers, including Ollie’s Army members.

The spending habits of our customers are subject to macroeconomic conditions and changes in discretionary income.  Our customers’ discretionary income is primarily impacted by gas prices, wages, and consumer trends and preferences, which fluctuate depending on the environment.  However, because we offer a broad selection of merchandise at extreme values, we believe we are less impacted than other retailers by economic cycles. These cycles correspond with declines in general consumer spending habits and we benefit from periods of increased consumer spending.

Comparable Store Sales

Comparable store sales measure performance of a store during the current reporting period against the performance of the same store in the corresponding period of the previous year.  Comparable store sales consists of net sales from our stores beginning on the first day of the sixteenth full fiscal month following the store’s opening, which is when we believe comparability is achieved.  Comparable store sales are impacted by the same factors that impact net sales.

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We define comparable stores to be stores that:

· have been remodeled while remaining open;

· are closed for five or fewer days in any fiscal month;

· are closed temporarily and relocated within their respective trade areas; and

· have expanded, but are not significantly different in size, within their current locations.

Non-comparable store sales consist of new store sales and sales for stores not open for a full 15 months.  Stores which are closed temporarily, but for more than five days in any fiscal month, are included in non-comparable store sales beginning in the fiscal month in which the temporary closure begins until the first full month of operation once the store re-opens, at which time they are included in comparable store sales.

Opening new stores is the primary component of our growth strategy and as we continue to execute on our growth strategy, we expect a significant portion of our sales growth will be attributable to non-comparable store sales.  Accordingly, comparable store sales are only one measure we use to assess the success of our growth strategy.

Gross Profit and Gross Margin

Gross profit is equal to our net sales less our cost of sales.  Cost of sales includes merchandise costs, inventory markdowns, shrinkage and transportation, distribution and warehousing costs, including depreciation. Gross margin is gross profit as a percentage of our net sales. Gross margin is a measure used by management to indicate whether we are selling merchandise at an appropriate gross profit.

In addition, our gross profit margin is impacted by product mix, as some products generally provide higher gross margins, by our merchandise mix and availability, and by our merchandise cost, which can vary.

Our gross profit is variable in nature and generally follows changes in net sales.  We regularly analyze the components of gross profit, as well as gross margin.  Specifically, our product margin and merchandise mix is reviewed by our merchant team and senior management, ensuring strict adherence to internal margin goals.  Our disciplined buying approach has produced consistent gross margins and we believe helps to mitigate adverse impacts on gross profit and results of operation.

The components of our cost of sales may not be comparable to the components of cost of sales or similar measures of our competitors and other retailers.  As a result, our gross profit and gross margin may not be comparable to similar data made available by our competitors and other retailers.

Selling, General and Administrative Expenses

SG&A are comprised of payroll and benefits for store, field support and support center associates.  SG&A also include marketing and advertising, occupancy, utilities, supplies, credit card processing fees, insurance and professional services. The components of our SG&A remain relatively consistent per store and for each new store opening. The components of our SG&A may not be comparable to the components of similar measures of other retailers.  Consolidated SG&A generally increase as we grow our store base and as our net sales increase. A significant portion of our expenses is primarily fixed in nature, and we expect to continue to maintain strict discipline while carefully monitoring SG&A as a percentage of net sales.  We expect that our SG&A will continue to increase in future periods with future growth.

Pre-Opening Expenses

Pre-opening expenses consist of expenses of opening new stores and distribution centers.  For new stores, pre-opening expenses include grand opening advertising costs, payroll expenses, travel expenses, employee training costs, rent expenses and store setup costs, as well as store closing costs.  Pre-opening expenses for new stores are expensed as they are incurred, which is typically within 30 to 45 days of opening a new store. For distribution centers, pre-opening expenses primarily include inventory transportation costs, employee travel expenses and occupancy costs.

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Operating Income

Operating income is gross profit less SG&A, depreciation and amortization and pre-opening expenses.  Operating income excludes interest expense, net, and income tax expense.  We use operating income as an indicator of the productivity of our business and our ability to manage expenses.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are key metrics used by management and our Board to assess our financial performance.  EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry.  We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to evaluate our performance in connection with compensation decisions and to compare our performance against that of other peer companies using similar measures.  Management believes it is useful to investors and analysts to evaluate these non-GAAP measures on the same basis as management uses to evaluate the Company’s operating results.  We believe that excluding items from operating income, net income and net income per diluted share that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business.

We define EBITDA as net income before net interest expense, loss on extinguishment of debt, depreciation and amortization expenses and income taxes.  Adjusted EBITDA represents EBITDA as further adjusted for non-cash stock-based compensation expense, non-cash purchase accounting items, transaction related expenses and debt financing expenses, which we do not consider representative of our ongoing operating performance.  EBITDA and Adjusted EBITDA are non-GAAP measures and may not be comparable to similar measures reported by other companies.  EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In the future we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items. For further discussion of EBITDA and Adjusted EBITDA and for reconciliations of EBITDA and Adjusted EBITDA to net income, the most directly comparable GAAP measure, see “Results of Operations.”

Factors Affecting the Comparability of our Results of Operations

Our results over the past two years have been affected by the following events, which must be understood in order to assess the comparability of our period-to-period financial performance and condition.

Historical Results

Historical results are not necessarily indicative of the results to be expected for any future period.

Financing Transactions

On January 29, 2016, we completed a transaction (“Refinancing”) in which we refinanced the existing senior secured credit facilities with the proceeds of the new Credit Facilities (as defined below).  The new credit facilities consist of a $200.0 million term loan (“Term Loan Facility”) and $100.0 million revolving credit facility (“Revolving Credit Facility,” and together with the Term Loan, the “Credit Facilities”) which includes a $25.0 million sub-facility for letters of credit and a $25.0 million sub-facility for swingline loans.

We made voluntary prepayments under the Term Loan Facility totaling $25.0 million and $65.0 million during the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.  In connection with these prepayments, $0.1 million and $0.3 million of debt issuance cost and $7,000 and $0.1 million of original issue discount were accelerated and included in loss on extinguishment of debt for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.  In accordance with the terms of the Term Loan Facility, the prepayments were applied against the remaining scheduled installment payments of principal due under the Term Loan Facility in direct order of maturity.  As a result, we are no longer obligated to make the scheduled installment payments of principal; however, we currently intend to continue to make these payments and therefore have classified such payments as current portion of long-term debt in the condensed consolidated balance sheet.

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Store Openings

We opened eight and five new stores in the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively. In connection with these store openings, we incurred pre-opening expenses of $1.8 million and $1.6 million for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

Seasonality

Our business is seasonal in nature and demand is generally the highest in our fourth fiscal quarter due to the holiday sales season.  To prepare for the holiday sales season, we must order and keep in stock more merchandise than we carry during other times of the year and generally engage in additional marketing efforts.  We expect inventory levels, along with accounts payable and accrued expenses, to reach their highest levels in our third and fourth fiscal quarters in anticipation of increased net sales during the holiday sales season.  As a result of this seasonality, and generally because of variation in consumer spending habits, we experience fluctuations in net sales and working capital requirements during the year.  Because we offer a broad selection of merchandise at extreme values, we believe we are less impacted than other retailers by economic cycles which correspond with declines in general consumer spending habits and we believe we still benefit from periods of increased consumer spending.

Results of Operations

The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.

We derived the condensed consolidated statements of income for the thirteen weeks ended May 5, 2018 and April 29, 2017 from our unaudited condensed consolidated financial statements and related notes.  Our historical results are not necessarily indicative of the results that may be expected in the future.

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	Thirteen weeks ended
	May 5, 2018			April 29, 2017
	( dollars in thousands)
Condensed consolidated statements of income data:
Net sales	$	275,739		$	227,602
Cost of sales		162,863			134,667
Gross profit		112,876			92,935
Selling, general and administrative expenses		72,364			61,731
Depreciation and amortization expenses		2,763			2,272
Pre-opening expenses		1,764			1,598
Operating income		35,985			27,334
Interest expense, net		538			1,334
Loss on extinguishment of debt		100			397
Income before income taxes		35,347			25,603
Income tax expense		4,893			6,637
Net income	$	30,454		$	18,966
Percentage of net sales (1):
Net sales		100.0	%		100.0	%
Cost of sales		59.1			59.2
Gross profit		40.9			40.8
Selling, general and administrative expenses		26.2			27.1
Depreciation and amortization expenses		1.0			1.0
Pre-opening expenses		0.6			0.7
Operating income		13.1			12.0
Interest expense, net		0.2			0.6
Loss on extinguishment of debt		—			0.2
Income before income taxes		12.8			11.2
Income tax expense		1.8			2.9
Net income		11.0	%		8.3	%
Select operating data:
New store openings		8			5
Number of stores open at end of period		276			239
Average net sales per store (2)	$	1,011		$	962
Comparable stores sales change		1.9	%		1.7	%

(1) Components may not add to totals due to rounding.

(2) Average net sales per store represents the weighted average of total net sales divided by the number of stores open, in each case at the end of each week in each fiscal period.

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The following table provides a reconciliation of our net income to Adjusted EBITDA for the periods presented:

	Thirteen weeks ended
	May 5, 2018			April 29, 2017
	( dollars in thousands)
Net income	$	30,454		$	18,966
Interest expense, net		538			1,334
Loss on extinguishment of debt		100			397
Depreciation and amortization expenses (1)		3,393			2,862
Income tax expense		4,893			6,637
EBITDA		39,378			30,196
Non-cash stock based compensation expense		1,600			1,911
Non-cash purchase accounting items (2)		(1	)		(22	)
Adjusted EBITDA	$	40,977		$	32,085

(1) Includes depreciation and amortization relating to our distribution centers, which is included within cost of sales on our condensed consolidated statements of income.

(2) Includes purchase accounting impact from unfavorable lease liabilities related to a prior acquisition.

First Quarter 2018 Compared to First Quarter 2017

Net Sales

Net sales increased to $275.7 million in the thirteen weeks ended May 5, 2018 from $227.6 million in the thirteen weeks ended April 29, 2017, an increase of $48.1 million, or 21.1%.  The increase was the result of a comparable store sales increase of $4.2 million, or 1.9% and a non-comparable store sales increase of $43.9 million.  The increase in non-comparable store sales was driven by sales from new stores that have not been open for a full 15 months.

Comparable store sales increased 1.9% for the thirteen weeks ended May 5, 2018 compared to a 1.7% increase for the thirteen weeks ended April 29, 2017.  The increase in comparable store sales for the thirteen weeks ended May 5, 2018 was driven by strong sales in our housewares and furniture departments offset by decreases in the electronic accessories and food departments.

Cost of Sales

Cost of sales increased to $162.9 million in the thirteen weeks ended May 5, 2018 from $134.7 million in the thirteen weeks ended April 29, 2017, an increase of $28.2 million, or 20.9%.  The increase in cost of sales was primarily the result of increased net sales.

Gross Profit and Gross Margin

Gross profit increased to $112.9 million in the thirteen weeks ended May 5, 2018 from $92.9 million in the thirteen weeks ended April 29, 2017, an increase of $19.9 million, or 21.5%. Gross margin increased to 40.9% in the thirteen weeks ended May 5, 2018 from 40.8% in the thirteen weeks ended April 29, 2017 due to increased merchandise margins partially offset by increased supply chain costs as a percentage of net sales.

Selling, General and Administrative Expenses

SG&A increased to $72.4 million in the thirteen weeks ended May 5, 2018 from $61.7 million in the thirteen weeks ended April 29, 2017, an increase of $10.6 million, or 17.2%. The increase in SG&A was primarily driven by increased selling expenses related to new store growth and increased sales volume. The increased selling expenses consisted primarily of store payroll and benefits, store occupancy costs, and other store related expenses.

21

Pre-Opening Expenses

Pre-opening expenses increased to $1.8 million in the thirteen weeks ended May 5, 2018 from $1.6 million in the thirteen weeks ended April 29, 2017, an increase of $0.2 million. The increase in pre-opening expenses during the thirteen weeks ended May 5, 2018 was due to the timing and number of new store openings.

Interest Expense, Net

Net interest expense decreased to $0.5 million in the thirteen weeks ended May 5, 2018 from $1.3 million in the thirteen weeks ended April 29, 2017, a decrease of $0.8 million, or 59.7%.  The decrease was primarily due to prepayments on the Term Loan Facility decreasing our average outstanding loan balance and resulting in a lower interest expense for thirteen weeks ended May 5, 2018.

Income Tax Expense

Income tax expense for the thirteen weeks ended May 5, 2018 was $4.9 million compared to $6.6 million for the thirteen weeks ended April 29, 2017, a decrease of $1.7 million, or 26.3%.  The decrease in income tax expense was the result of a lower effective tax rate due to the provisions of the recently enacted Tax Cuts and Jobs Act (the “2017 Tax Act”), which, among other things, permanently lowered the federal corporate tax rate to 21% from the prior maximum rate of 35%.  In addition, the thirteen weeks ended May 5, 2018 and April 29, 2017 included a discrete tax benefit of $3.9 million and $3.2 million, respectively, due to the excess tax benefits related to stock-based compensation.

Net Income

As a result of the foregoing, net income increased to $30.5 million in the thirteen weeks ended May 5, 2018 from $19.0 million in the thirteen weeks ended April 29, 2017, an increase of $11.5 million or 60.6%.

Adjusted EBITDA

Adjusted EBITDA increased to $41.0 million for the thirteen weeks ended May 5, 2018 from $32.1 million for the thirteen weeks ended April 29, 2017, an increase of $8.9 million, or 27.7%.  We achieved increased gross profit dollars due to the increased sales volume and gross margin expansion. Additionally, as a result of the sales increase for the thirteen weeks ended May 5, 2018, our SG&A as a percentage of net sales decreased by 90 basis points, all resulting in increased adjusted EBITDA compared to the same period last year.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are net cash provided by operating activities and borrowings under our Revolving Credit Facility.  Our primary cash needs are for capital expenditures and working capital.  As of May 5, 2018, we had $95.3 million of available borrowings under our Revolving Credit Facility, $27.6 million of cash and cash equivalents on hand, and $23.8 million of outstanding borrowings under our Term Loan Facility.

Our capital expenditures are primarily related to new store openings, store resets, which consist of improvements to stores as they are needed, expenditures related to our distribution centers, and infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems.  For the thirteen weeks ended May 5, 2018, we spent $4.7 million for capital expenditures compared to $3.0 million for the thirteen weeks ended April 29, 2017. We expect to fund capital expenditures from net cash provided by operating activities. We opened eight stores during the thirteen weeks ended May 5, 2018 and expect to open between 36 and 38 stores during 2018. We also expect to invest in our distribution centers, store resets and general corporate capital expenditures, including information technology, in 2018.

22

Historically, we have funded our capital expenditures and working capital requirements during the fiscal year with cash on hand and borrowings under our Revolving Credit Facility.  When we have used our Revolving Credit Facility, the amount of indebtedness outstanding under it has tended to be the highest in the beginning of our fourth fiscal quarter.

Our primary working capital requirements are for the purchase of inventory, payroll, rent, other store operating costs, distribution costs and general and administrative costs.  Our working capital requirements fluctuate during the year, rising in our third fiscal quarter as we increase quantities of inventory in anticipation of our peak holiday sales season in our fourth fiscal quarter.  Fluctuations in working capital are also driven by the timing of new store openings.

Based on our new store growth plans, we believe our cash position, net cash provided by operating activities and availability under our Revolving Credit Facility will be adequate to finance our planned capital expenditures, working capital requirements and debt service over the next 12 months.  If cash provided by operating activities and borrowings under our Revolving Credit Facility are not sufficient or available to meet our capital requirements, we will then be required to obtain additional equity or debt financing in the future.  There can be no assurance equity or debt financing will be available to us when needed or, if available, the terms will be satisfactory to us and not dilutive to our then-current stockholders.

Summary of Cash Flows

A summary of our cash flows from operating, investing and financing activities is presented in the following table:

	Thirteen weeks ended
	May 5, 2018			April 29, 2017
	(in thousands)
Net cash provided by operating activities	$	15,348		$	1,919
Net cash used in investing activities		(4,708	)		(2,945	)
Net cash used in financing activities		(22,260	)		(63,937	)
Net decrease in cash and cash equivalents	$	(11,620	)	$	(64,963	)

Cash Provided by Operating Activities

Net cash provided by operating activities for the thirteen weeks ended May 5, 2018 and April 29, 2017 was $15.3 million and $1.9 million, respectively.  The increase in net cash provided by operating activities for the thirteen weeks ended May 5, 2018 was primarily due to increases in net income due to new store openings and increased profitability at existing stores.

Cash Used in Investing Activities

Net cash used in investing activities for the thirteen weeks ended May 5, 2018 and April 29, 2017 was $4.7 million and $2.9 million, respectively.  The increase in cash used in investing activities primarily relates to capital expenditures in the two distribution centers.

Cash Used In Financing Activities

Net cash used in financing activities was $22.3 million and $63.9 million in the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively. The decrease in cash outflows for the thirteen weeks ended May 5, 2018 was primarily related to $25.0 million of additional term loan repayments compared to $65.0 million of additional term loan repayments made during the first quarter of fiscal year 2017.

Contractual Obligations

We enter into long-term contractual obligations and commitments in the normal course of business, primarily operating leases. Except as set forth below, there have been no material changes to our contractual obligations as disclosed in our Annual Report on Form 10-K, other than those which occur in the ordinary course of business.

23

During the thirteen weeks ended May 5, 2018, five new store leases commenced.  The fully executed leases have initial terms of approximately seven years with options to renew for three or four successive five-year periods which have future minimum lease payments which total approximately $6.0 million.

Off-Balance Sheet Arrangements

Except for operating leases entered into in the normal course of business, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. There have been no significant changes in the significant accounting policies and estimates, except for what is described in note 2 of this quarterly report on Form 10-Q.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements are discussed in Note 1(f) to the condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are subject to interest rate risk in connection with borrowings under our credit facilities, which bear interest at variable rates. As of May 5, 2018, we had no outstanding borrowings under our Revolving Credit Facility and $23.8 million of outstanding indebtedness under the Term Loan Facility. The impact of a 1.0% rate change on the outstanding balance of the Term Loan Facility as of May 5, 2018 would be approximately $0.2 million.

As of May 5, 2018, there were no other material changes in the market risks described in the “Quantitative and Qualitative Disclosure of Market Risks” section of our Annual Report on Form 10-K filed with the SEC on April 4, 2018.

Impact of Inflation

Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our historical results of operations and financial condition have been immaterial. We cannot be assured that our results of operations and financial condition will not be materially impacted by inflation in the future.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q pursuant to Rule 13a-15(b) of the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q are effective at a reasonable assurance level in ensuring that information required to be disclosed in our Exchange Act reports is: (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent or detect all errors and all fraud. While our disclosure controls and procedures are designed to provide reasonable assurance of their effectiveness, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

24

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting during the thirteen weeks ended May 5, 2018 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time we may be involved in claims and legal actions that arise in the ordinary course of our business. We cannot predict the outcome of any litigation or suit to which we are a party.  However, we do not believe that an unfavorable decision of any of the current claims or legal actions against us, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, liquidity or capital resources.

ITEM 1A. RISK FACTORS

See Item 1A in our Annual Report on Form 10-K for the year ended February 3, 2018 for a detailed description of risk factors affecting the Company.  There have been no significant changes from the risk factors previously disclosed in those filings.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

25

ITEM 6. EXHIBITS

Exhibit No.	Description of Exhibits
*31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**101.INS	XBRL Instance Document.
**101.SCH	XBRL Taxonomy Extension Schema Document.
**101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
**101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
**101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
**101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

** Submitted electronically with this Report.

26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	OLLIE’S BARGAIN OUTLET HOLDINGS, INC.
Date: June 7, 2018		/s/	Jay Stasz
			Jay Stasz
			Senior Vice President and
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

27

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Mark Butler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ollie’s Bargain Outlet Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 7, 2018	/s/ Mark Butler
	Mark Butler
	President, Chief Executive Officer and Chairman
	of the Board
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jay Stasz, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ollie’s Bargain Outlet Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 7, 2018	/s/ Jay Stasz
	Jay Stasz
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Ollie’s Bargain Outlet Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended May 5, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark Butler, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 7, 2018
	/s/ Mark Butler
	Mark Butler
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Ollie’s Bargain Outlet Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended May 5, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay Stasz, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: June 7, 2018
	/s/ Jay Stasz
	Jay Stasz
	Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	May 05, 2018	Jun. 06, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Ollie's Bargain Outlet Holdings, Inc.
Entity Central Index Key	0001639300
Current Fiscal Year End Date	--02-03
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		62,348,159
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 05, 2018

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Consolidated Statements of Income (Unaudited) [Abstract]
Net sales	$ 275,739	$ 227,602
Cost of sales	162,863	134,667
Gross profit	112,876	92,935
Selling, general and administrative expenses	72,364	61,731
Depreciation and amortization expenses	2,763	2,272
Pre-opening expenses	1,764	1,598
Operating income	35,985	27,334
Interest expense, net	538	1,334
Loss on extinguishment of debt	100	397
Income before income taxes	35,347	25,603
Income tax expense	4,893	6,637
Net income	$ 30,454	$ 18,966
Earnings per common share:
Basic (in dollars per share)	$ 0.49	$ 0.31
Diluted (in dollars per share)	$ 0.46	$ 0.29
Weighted average common shares outstanding:
Basic (in shares)	62,169	60,880
Diluted (in shares)	65,624	64,389

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
Current assets:
Cash and cash equivalents	$ 27,614	$ 39,234	$ 33,720
Inventories	276,040	255,185	246,630
Accounts receivable	414	1,271	330
Prepaid expenses and other assets	8,132	7,986	3,312
Total current assets	312,200	303,676	283,992
Property and equipment, net of accumulated depreciation of $53,276, $41,144 and $50,076, respectively	55,647	54,888	47,061
Goodwill	444,850	444,850	444,850
Trade name and other intangible assets, net of accumulated amortization of $1,909, $1,574 and $1,825, respectively	232,555	232,639	232,890
Other assets	2,084	2,146	2,338
Total assets	1,047,336	1,038,199	1,011,131
Current liabilities:
Current portion of long-term debt	10,143	10,158	6,340
Accounts payable	75,420	74,206	62,935
Income taxes payable	10,858	6,035	11,919
Accrued expenses and other	47,067	46,327	39,939
Total current liabilities	143,488	136,726	121,133
Revolving credit facility	0	0	0
Long-term debt	13,926	38,835	121,905
Deferred income taxes	57,094	59,073	88,360
Other long-term liabilities	7,113	7,103	5,259
Total liabilities	221,621	241,737	336,657
Stockholders' equity:
Preferred stock - 50,000 shares authorized at $0.001 par value; no shares issued	0	0	0
Common stock - 500,000 shares authorized at $0.001 par value; 62,358, 61,130 and 62,007 shares issued, respectively	62	62	61
Additional paid-in capital	587,857	583,467	570,108
Retained earnings	237,882	213,019	104,391
Treasury - common stock, at cost; 9 shares	(86)	(86)	(86)
Total stockholders' equity	825,715	796,462	674,474
Total liabilities and stockholders' equity	$ 1,047,336	$ 1,038,199	$ 1,011,131

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
Assets
Property and equipment, accumulated depreciation	$ 53,276	$ 50,076	$ 41,144
Trade name and other intangible assets, accumulated amortization	$ 1,909	$ 1,825	$ 1,574
Stockholders' equity:
Preferred stock, shares authorized (in shares)	50,000	50,000	50,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares issued (in shares)	0	0	0
Common stock, shares authorized (in shares)	500,000	500,000	500,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock, shares issued (in shares)	62,358	62,007	61,130
Treasury - common stock (in shares)	9	9	9

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance at Jan. 28, 2017	$ 61	$ (86)	$ 565,861	$ 85,425	$ 651,261
Beginning balance (in shares) at Jan. 28, 2017	60,756	(9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	$ 0	$ 0	1,911	0	1,911
Proceeds from stock options exercised	$ 0	$ 0	2,555	0	2,555
Proceeds from stock options exercised (in shares)	355	0
Vesting of restricted stock	$ 0	$ 0	0	0	0
Vesting of restricted stock (in shares)	26	0
Common shares withheld for taxes	$ 0	$ 0	(219)	0	(219)
Common shares withheld for taxes (in shares)	(7)	0
Net income	$ 0	$ 0	0	18,966	18,966
Ending balance at Apr. 29, 2017	$ 61	$ (86)	570,108	104,391	674,474
Ending balance (in shares) at Apr. 29, 2017	61,130	(9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of adopting ASU 2014-09 (Note 2) | ASU 2014-09 [Member]	$ 0	$ 0	0	(5,591)	(5,591)
Beginning balance at Feb. 03, 2018	$ 62	$ (86)	583,467	213,019	796,462
Beginning balance (in shares) at Feb. 03, 2018	62,007	(9)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	$ 0	$ 0	1,600	0	1,600
Proceeds from stock options exercised	$ 0	$ 0	3,492	0	3,492
Proceeds from stock options exercised (in shares)	312	0
Vesting of restricted stock	$ 0	$ 0	0	0	0
Vesting of restricted stock (in shares)	51	0
Common shares withheld for taxes	$ 0	$ 0	(702)	0	(702)
Common shares withheld for taxes (in shares)	(12)	0
Net income	$ 0	$ 0	0	30,454	30,454
Ending balance at May. 05, 2018	$ 62	$ (86)	$ 587,857	$ 237,882	$ 825,715
Ending balance (in shares) at May. 05, 2018	62,358	(9)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Cash flows from operating activities:
Net income	$ 30,454	$ 18,966
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment	3,309	2,775
Amortization of debt issuance costs	128	180
Amortization of original issue discount	2	5
Loss on extinguishment of debt	100	397
Gain on sale of assets	(6)	(8)
Amortization of intangibles	84	87
Deferred income tax benefit	(57)	(864)
Deferred rent expense	128	183
Stock-based compensation expense	1,600	1,911
Changes in operating assets and liabilities:
Inventories	(20,855)	(36,523)
Accounts receivable	857	(29)
Prepaid expenses and other assets	(188)	370
Accounts payable	1,500	11,746
Income taxes payable	4,823	7,371
Accrued expenses and other liabilities	(6,531)	(4,648)
Net cash provided by operating activities	15,348	1,919
Cash flows from investing activities:
Purchases of property and equipment	(4,719)	(2,953)
Proceeds from sale of property and equipment	11	8
Net cash used in investing activities	(4,708)	(2,945)
Cash flows from financing activities:
Borrowings on revolving credit facility	287,750	236,389
Repayments on revolving credit facility	(287,750)	(236,389)
Repayments on term loan and capital leases	(25,050)	(66,273)
Proceeds from stock option exercises	3,492	2,555
Common shares withheld for taxes	(702)	(219)
Net cash used in financing activities	(22,260)	(63,937)
Net decrease in cash and cash equivalents	(11,620)	(64,963)
Cash and cash equivalents at the beginning of the period	39,234	98,683
Cash and cash equivalents at the end of the period	27,614	33,720
Cash paid during the period for:
Interest	421	1,152
Income taxes	127	130
Non-cash investing activities:
Accrued purchases of property and equipment	$ 1,279	$ 1,518

XML

Organization and Summary of Significant Accounting Policies

3 Months Ended

May 05, 2018

Organization and Summary of Significant Accounting Policies [Abstract]

Organization and Summary of Significant Accounting Policies

(1) Organization and Summary of Significant Accounting Policies

(a) Description of Business

Ollie’s Bargain Outlet Holdings, Inc. and subsidiaries (collectively referenced to as the “Company” or “Ollie’s”) principally buys overproduced, overstocked, and closeout merchandise from manufacturers, wholesalers and other retailers. In addition, the Company augments its name-brand closeout deals with directly sourced private label products featuring names exclusive to Ollie’s in order to provide consistently value-priced goods in select key merchandise categories.

Since its first store opened in 1982, the Company has grown to 276 retail locations in 21 states as of May 5, 2018. Ollie’s Bargain Outlet retail locations are located in Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia and West Virginia.

(b) Fiscal Year

Ollie’s follows a 52/53-week fiscal year, which ends on the Saturday nearer to January 31 of the following year.  References to the thirteen weeks ended May 5, 2018 and April 29, 2017 refer to the thirteen weeks from February 4, 2018 to May 5, 2018 and from January 29, 2017 to April 29, 2017, respectively.  References to “2017” refer to the fiscal year ended February 3, 2018, which consisted of a 53-week period.  References to “2018” refer to the fiscal year ending February 2, 2019, which consists of a 52-week period.

(c) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to present fairly the Company’s results of operations, financial condition, and cash flows for all periods presented. The condensed consolidated balance sheets as of May 5, 2018 and April 29, 2017, and the condensed consolidated statements of income, stockholders’ equity and cash flows for the thirteen weeks ended May 5, 2018 and April 29, 2017 have been prepared by the Company and are unaudited. The Company’s business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of operating results for 2018 or any other period. All intercompany accounts, transactions, and balances have been eliminated in consolidation.

The Company’s balance sheet as of February 3, 2018, presented herein, has been derived from the audited balance sheet included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2018 (“Annual Report”), but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the financial statements for 2017 and footnotes thereto included in the Annual Report.

For purposes of the disclosure requirements for segments of a business enterprise, it has been determined that the Company is comprised of one operating segment.

(d) Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(e) Fair Value Disclosures

Fair value is defined as the price which the Company would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three‑level hierarchy used in measuring fair value, as follows:

· Level 1 inputs are quoted prices available for identical assets and liabilities in active markets.

· Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs which are observable or can be corroborated by observable market data.

· Level 3 inputs are less observable and reflect the Company’s assumptions.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, its revolving credit facility and its term loan facility. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of their short maturities. The carrying amount of the revolving credit facility and term loan facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions.

(f) Recently Issued Accounting Pronouncements

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and lease liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. Substantially all of the Company’s store locations and distribution centers are subject to operating lease arrangements. The Company is currently evaluating the impact of the adoption of this new standard on its consolidated financial statements and related disclosures, and anticipates it will result in significant right-of-use assets and related liabilities on its consolidated balance sheets.

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Net Sales

3 Months Ended

May 05, 2018

Net Sales [Abstract]

Net Sales

(2) Net Sales

Ollie’s recognizes retail sales in its stores when merchandise is sold and the customer takes possession of merchandise.  Also, included in net sales, is revenue allocated to certain redeemed discounts earned via the Ollie’s Army loyalty program and gift card breakage.  Net sales are presented net of returns and sales tax. The Company provides an allowance for estimated retail merchandise returns based on prior experience.

Adoption of ASU 2014-09, Revenue from Contracts with Customers

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than present standards.

The Company adopted ASU 2014-09 as of February 4, 2018 using the modified retrospective transition method.  Results for reporting periods beginning after February 4, 2018 are presented pursuant to the requirements of the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under prior guidance.

The Company recorded a net reduction to the opening balance of retained earnings of $5.6 million as of February 4, 2018 due to the cumulative impact of adopting ASU 2014-09, with the impact primarily related to the changes in revenue recognition associated with the Company’s customer loyalty program and gift card breakage.

The cumulative effect of changes to the Company’s consolidated February 4, 2018 balance sheet for the adoption of ASU 2014-09 was as follows (in thousands):

	Balance at February 3, 2018		Adjustments Due to ASU 2014-09			Balance at February 4, 2018
Assets
Inventories	$	255,185	$	339		$	255,524
Liabilities
Accrued expenses and other		46,327		7,853			54,180
Deferred income taxes		59,073		(1,923	)		57,150
Equity
Retained earnings		213,019		(5,591	)		207,428

The Company has determined the adoption of ASU 2014-09 has changed the presentation for the following:

· Revenue is deferred for the Ollie’s Army loyalty program where members accumulate points that can be redeemed for discounts on future purchases. The Company has determined it has an additional performance obligation to Ollie’s Army members at the time of the initial transaction. The Company allocates the transaction price to the initial transaction and the discount awards based upon its relative standalone selling price, which considers historical redemption patterns for the award. Revenue is recognized as those discount awards are redeemed. Discount awards which are issued upon the achievement of specified point levels expire 90 days from the date of issuance.  At the end of each fiscal period, unredeemed discount awards and accumulated points to earn a future discount award, are reflected as a liability.  Discount awards are combined in one homogeneous pool and are not separately identifiable.  Therefore, the revenue recognized consisted of discount awards redeemed that were included in the deferred revenue balance at the beginning of the period as well as discount awards issued during the current period.  The following table is a reconciliation of the liability related to this program (in thousands):

Balance at February 3, 2018	$	8,321
Revenue deferred		2,575
Revenue recognized		(2,364	)
Balance at May 5, 2018	$	8,532

· Gift card breakage for gift card liabilities not subject to escheatment is recognized as revenue in proportion to the redemption of gift cards rather than when redemption of the gift card was considered remote.  Ollie’s gift cards do not expire.  The rate applied to redemptions is based upon a historical breakage rate.  Gift cards are combined in one homogenous pool and are not separately identifiable.  Therefore, the revenue recognized consisted of gift cards that were included in the liability at the beginning of the period as well as gift cards that were issued during the period.  The following table is a reconciliation of the gift card liability (in thousands):

Balance at February 3, 2018	$	1,223
Gift card issuances		908
Gift card redemption and breakage		(990	)
Balance at May 5, 2018	$	1,141

· Sales return allowance is recorded on a gross basis on the condensed consolidated balance sheet as a refund liability and an asset for recovery rather than as a net liability.  The allowance for estimated retail merchandise returns is based on prior experience.

The adoption of ASU 2014-09 did not have a material impact on the Company’s condensed consolidated income statement and statement of cash flows for the thirteen weeks ended May 5, 2018.  As a result of the adoption of ASU 2014-09, the Company’s balance sheet at May 5, 2018 reflected an additional liability of $8.5 million related to the Ollie’s Army loyalty program which would not have been recorded prior to adoption.  Other changes to the condensed consolidated balance sheet at May 5, 2018 were not significant.

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Earnings per Common Share

3 Months Ended

May 05, 2018

Earnings per Common Share [Abstract]

Earnings per Common Share

(3) Earnings per Common Share

Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding after giving effect to the potential dilution, if applicable, from the assumed exercise of stock options into shares of common stock as if those stock options were exercised and the assumed lapse of restrictions on restricted stock units.

The following table summarizes those effects for the diluted earnings per common share calculation (in thousands, except per share amounts):

	Thirteen weeks ended
	May 5, 2018		April 29, 2017
Net income	$	30,454	$	18,966
Weighted average number of common shares outstanding – Basic		62,169		60,880
Incremental shares from the assumed exercise of outstanding stock options and vesting of restricted stock units		3,455		3,509
Weighted average number of common shares outstanding - Diluted		65,624		64,389
Earnings per common share – Basic	$	0.49	$	0.31
Earnings per common share - Diluted	$	0.46	$	0.29

The effect of the weighted average assumed exercise of stock options outstanding totaling 124,738 and 195,626 for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively, were excluded from the calculation of diluted weighted average common shares outstanding because the effect would have been antidilutive.

The effect of weighted average non-vested restricted stock units outstanding totaling 26,333 and 0 for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively, were excluded from the calculation of diluted weighted average common shares outstanding because the effect would have been antidilutive.

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Accrued Expenses and Other

3 Months Ended

May 05, 2018

Accrued Expenses and Other [Abstract]

Accrued Expenses and Other

(4) Accrued Expenses and Other

Accrued expenses and other consists of the following (in thousands):

	May 5, 2018		April 29, 2017		February 3, 2018
Deferred revenue	$	8,532	$	-	$	-
Compensation and benefits		6,910		8,235		14,181
Sales and use taxes		4,721		3,448		3,865
Freight		4,434		6,943		3,836
Insurance		3,918		2,892		2,768
Real estate related		3,772		3,446		4,019
Advertising		3,339		3,849		5,523
Other		11,441		11,126		12,135
	$	47,067	$	39,939	$	46,327

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Debt Obligations and Financing Arrangements

3 Months Ended

May 05, 2018

Debt Obligations and Financing Arrangements [Abstract]

Debt Obligations and Financing Arrangements

(5) Debt Obligations and Financing Arrangements

Long-term debt consists of the following (in thousands):

	May 5, 2018			April 29, 2017			February 3, 2018
Term loan, net	$	23,655		$	127,968		$	48,530
Capital leases		414			277			463
Total debt		24,069			128,245			48,993
Less: current portion		(10,143	)		(6,340	)		(10,158	)
Long-term debt	$	13,926		$	121,905		$	38,835

On January 29, 2016, the Company refinanced its existing senior secured credit facility with the proceeds of its new Credit Facilities (as defined below).  The new credit facilities consist of a $200.0 million term loan (“Term Loan Facility”) and a $100.0 million revolving credit facility (“Revolving Credit Facility”, and together with the Term Loan Facility, the “Credit Facilities”) which includes a $25.0 million sub-facility for letters of credit and a $25.0 million sub-facility for swingline loans.

The interest rates for the Credit Facilities are not subject to a floor and are calculated as the higher of the Prime Rate, the Federal Funds Effective Rate plus 0.50% or the Eurodollar Rate plus 1.0%, plus the Applicable Margin, or, for Eurodollar Loans, the Eurodollar Rate plus the Applicable Margin. The Applicable Margin will vary from 0.75% to 1.25% for a Base Rate Loan and 1.75% to 2.25% for a Eurodollar Loan, based on reference to the total leverage ratio. The Credit Facilities mature on January 29, 2021.

As of May 5, 2018, the Term Loan Facility is subject to amortization with principal payable in quarterly installments of $2.5 million to be made on the last business day of each fiscal quarter prior to maturity.  The remaining initial aggregate advances under the Term Loan Facility are payable at maturity.

The Company made voluntary prepayments under the Term Loan Facility totaling $25.0 million and $65.0 million during the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.  In connection with these prepayments, $0.1 million and $0.3 million of debt issuance cost and $7,000 and $0.1 million of original issue discount were accelerated and included in loss on extinguishment of debt for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.  In accordance with the terms of the Term Loan Facility, prepayments were applied against the remaining scheduled installment payments of principal due under the Term Loan Facility in direct order of maturity.  As a result, the Company is no longer obligated to make the scheduled installment payments of principal; however, the Company currently intends to continue to make these payments and therefore has classified such payments as current portion of long-term debt in the condensed consolidated balance sheet.

Under the terms of the Revolving Credit Facility, as of May 5, 2018, the Company could borrow up to 90.0% of the most recent appraised value (valued at cost, discounted for the current net orderly liquidation value) of its eligible inventory, as defined, up to $100.0 million.

As of May 5, 2018, Ollie’s had $23.7 million of outstanding indebtedness under the Term Loan Facility and no outstanding borrowings under the Revolving Credit Facility, with $95.3 million of borrowing availability, letter of credit commitments of $4.4 million and $0.3 million of rent reserves.  The interest rate on the outstanding borrowings under the Term Loan Facility was 1.75% plus the 30-day Eurodollar Rate, or 3.65%.  The Revolving Credit Facility also contains a variable unused line fee ranging from 0.250% to 0.375% per annum.

As of May 5, 2018 and April 29, 2017, the amounts outstanding under the Term Loan Facility are net of unamortized original issue discount of $7,000 and $0.1 million and deferred financing fees of $0.1 million and $0.7 million in each respective period.

The Credit Facilities are collateralized by the Company’s assets and equity and contain financial covenants, as well as certain business covenants, including restrictions on dividend payments, which the Company must comply with during the term of the agreements. The financial covenants include a consolidated fixed charge coverage ratio test of at least 1.1 to 1.0 and a total leverage test of no greater than 3.5 to 1.0. The Company was in compliance with all terms of the Credit Facilities during the thirteen weeks ended May 5, 2018.

The provisions of the Credit Facilities restrict all of the net assets of the Company’s consolidated subsidiaries, which constitutes all of the net assets on the Company’s consolidated balance sheet as of May 5, 2018, from being used to pay any dividends or make other restricted payments to the Company without prior written consent from the financial institutions that are a party to the Credit Facilities, subject to certain exceptions.

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Income Taxes

3 Months Ended

May 05, 2018

Income Taxes [Abstract]

Income Taxes

(6) Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for discrete events occurring in a particular period. The effective tax rates for the thirteen weeks ended May 5, 2018 and April 29, 2017 were 13.8% and 25.9%, respectively. The effective tax rate was lower for the thirteen weeks ended May 5, 2018 primarily as a result of the provisions of the recently enacted Tax Cuts and Jobs Act, which, among other things, permanently lowered the federal corporate tax rate to 21% from the prior maximum rate of 35%, effective for tax years including or commencing January 1, 2018.  In addition, the thirteen weeks ended May 5, 2018 and April 29, 2017 included a discrete tax benefit of $3.9 million and $3.2 million, respectively, due to excess tax benefits related to stock-based compensation.

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Commitments and Contingencies

3 Months Ended

May 05, 2018

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(7) Commitments and Contingencies

The Company commenced five new store leases during the thirteen weeks ended May 5, 2018.  The fully executed leases have initial terms of approximately seven years with options to renew for three to four successive five-year periods.  The initial terms of these new store leases have future minimum lease payments totaling approximately $6.0 million.

From time to time the Company may be involved in claims and legal actions that arise in the ordinary course of its business. The Company cannot predict the outcome of any litigation or suit to which it is a party.  However, the Company does not believe that an unfavorable decision of any of the current claims or legal actions against it, individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity or capital resources.

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Equity Incentive Plans

3 Months Ended

May 05, 2018

Equity Incentive Plans [Abstract]

Equity Incentive Plans

(8) Equity Incentive Plans

During 2012, Ollie’s established an equity incentive plan (the “2012 Plan”), under which stock options were granted to executive officers and key employees as deemed appropriate under the provisions of the 2012 Plan, with an exercise price at the fair value of the underlying stock on the date of grant. The vesting period for options granted under the 2012 Plan is five years (20% ratably per year). Options granted under the 2012 Plan are subject to employment for vesting, expire 10 years from the date of grant and are not transferable other than upon death. As of July 15, 2015, the date of the pricing of the Company’s initial public offering, no additional equity grants will be made under the 2012 Plan.

In connection with its initial public offering, the Company adopted the 2015 equity incentive plan (the “2015 Plan”) pursuant to which the Company’s Board of Directors may grant stock options, restricted shares or other awards to employees, directors and consultants. The 2015 Plan allows for the issuance of up to 5,250,000 shares. Awards will be made pursuant to agreements and may be subject to vesting and other restrictions as determined by the Board of Directors or the Compensation Committee of the Board. The Company uses authorized and unissued shares to satisfy share award exercises. As of May 5, 2018, there were 3,458,829 shares available for grant under the 2015 Plan.

Stock Options

The exercise price for stock options is determined at the fair value of the underlying stock on the date of grant. The vesting period for awards granted under the 2015 Plan is generally set at four years (25% ratably per year). Awards are subject to employment for vesting, expire 10 years from the date of grant, and are not transferable other than upon death.

A summary of the Company’s stock option activity and related information follows for the thirteen weeks ended May 5, 2018 (in thousands, except share and per share amounts):

	Number of options			Weighted average exercise price		Weighted average remaining contractual term (years)
Outstanding at February 3, 2018		4,458,387		$	11.65
Granted		273,419			58.79
Forfeited		(9,220	)		31.28
Exercised		(311,776	)		11.20
Outstanding at May 5, 2018		4,410,810			14.57		6.1
Exercisable at May 5, 2018		2,797,229			8.86		5.1

The Company uses the Black-Scholes option pricing model to value its stock option awards.  The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The expected life of stock options was estimated using the “simplified method,” as the Company has no historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants.  The simplified method is based on the average of the vesting tranches and the contractual life of each grant.  For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of option grants.  The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option.

The weighted average grant date fair value per option for options granted during the thirteen weeks ended May 5, 2018 and April 29, 2017 was $18.73 and $10.56, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model that used the weighted average assumptions in the following table:

	Thirteen weeks ended
	May 5, 2018			April 29, 2017
Risk-free interest rate		2.70	%		2.20	%
Expected dividend yield		—			—
Expected term (years)	6.25 years			6.25 years
Expected volatility		25.84	%		28.36	%

Restricted Stock Units

Restricted stock units (“RSUs”) are issued at a value not less than the fair market value of the common stock on the date of the grant. RSUs granted to date vest ratably over three or four years or cliff vest in one or four years. Awards are subject to employment for vesting and are not transferable other than upon death.

A summary of the Company’s RSU activity and related information for the thirteen weeks ended May 5, 2018 is as follows:

	Number of shares			Weighted average grant date fair value
Non-vested balance at February 3, 2018		207,346		$	26.15
Granted		62,869			58.76
Vested		(50,645	)		26.09
Non-vested balance at May 5, 2018		219,570			35.50

Stock-Based Compensation Expense

The compensation cost for stock options and RSUs which have been recorded within selling, general and administrative expenses related to the Company’s equity incentive plans was $1.6 million and $1.9 million for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

As of May 5, 2018 there was $18.7 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 2.9 years.  Compensation costs related to awards are recognized using the straight-line method.

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Transactions with Related Parties

3 Months Ended

May 05, 2018

Transactions with Related Parties [Abstract]

Transactions with Related Parties

(9) Transactions with Related Parties

The Company has entered into five non-cancelable operating leases with related parties for office and store locations. Ollie’s made $0.4 million and $0.3 million in rent payments to such related parties during each of the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

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Organization and Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 05, 2018

Organization and Summary of Significant Accounting Policies [Abstract]

Fiscal Year

(b) Fiscal Year

Ollie’s follows a 52/53-week fiscal year, which ends on the Saturday nearer to January 31 of the following year.  References to the thirteen weeks ended May 5, 2018 and April 29, 2017 refer to the thirteen weeks from February 4, 2018 to May 5, 2018 and from January 29, 2017 to April 29, 2017, respectively.  References to “2017” refer to the fiscal year ended February 3, 2018, which consisted of a 53-week period.  References to “2018” refer to the fiscal year ending February 2, 2019, which consists of a 52-week period.

Basis of Presentation

(c) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements reflect all normal recurring adjustments which management believes are necessary to present fairly the Company’s results of operations, financial condition, and cash flows for all periods presented. The condensed consolidated balance sheets as of May 5, 2018 and April 29, 2017, and the condensed consolidated statements of income, stockholders’ equity and cash flows for the thirteen weeks ended May 5, 2018 and April 29, 2017 have been prepared by the Company and are unaudited. The Company’s business is seasonal in nature and results of operations for the interim periods presented are not necessarily indicative of operating results for 2018 or any other period. All intercompany accounts, transactions, and balances have been eliminated in consolidation.

The Company’s balance sheet as of February 3, 2018, presented herein, has been derived from the audited balance sheet included in the Company’s Annual Report on Form 10-K filed with the SEC on April 4, 2018 (“Annual Report”), but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the financial statements for 2017 and footnotes thereto included in the Annual Report.

Segment Reporting

For purposes of the disclosure requirements for segments of a business enterprise, it has been determined that the Company is comprised of one operating segment.

Use of Estimates

(d) Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value Disclosures

(e) Fair Value Disclosures

Fair value is defined as the price which the Company would receive to sell an asset or pay to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. In determining fair value, GAAP establishes a three‑level hierarchy used in measuring fair value, as follows:

· Level 1 inputs are quoted prices available for identical assets and liabilities in active markets.

· Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets or other inputs which are observable or can be corroborated by observable market data.

· Level 3 inputs are less observable and reflect the Company’s assumptions.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, its revolving credit facility and its term loan facility. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of their short maturities. The carrying amount of the revolving credit facility and term loan facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions.

Recently Issued Accounting Pronouncements

(f) Recently Issued Accounting Pronouncements

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing a right-of-use asset and lease liability. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. Substantially all of the Company’s store locations and distribution centers are subject to operating lease arrangements. The Company is currently evaluating the impact of the adoption of this new standard on its consolidated financial statements and related disclosures, and anticipates it will result in significant right-of-use assets and related liabilities on its consolidated balance sheets.

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Net Sales (Tables)

3 Months Ended

May 05, 2018

Net Sales [Abstract]

Cumulative Effect of Changes to Consolidated Balance Sheet for Adoption of ASU 2014-09

The cumulative effect of changes to the Company’s consolidated February 4, 2018 balance sheet for the adoption of ASU 2014-09 was as follows (in thousands):

	Balance at February 3, 2018		Adjustments Due to ASU 2014-09			Balance at February 4, 2018
Assets
Inventories	$	255,185	$	339		$	255,524
Liabilities
Accrued expenses and other		46,327		7,853			54,180
Deferred income taxes		59,073		(1,923	)		57,150
Equity
Retained earnings		213,019		(5,591	)		207,428

Ollie's Army Loyalty Program Liability

· Revenue is deferred for the Ollie’s Army loyalty program where members accumulate points that can be redeemed for discounts on future purchases. The Company has determined it has an additional performance obligation to Ollie’s Army members at the time of the initial transaction. The Company allocates the transaction price to the initial transaction and the discount awards based upon its relative standalone selling price, which considers historical redemption patterns for the award. Revenue is recognized as those discount awards are redeemed. Discount awards which are issued upon the achievement of specified point levels expire 90 days from the date of issuance.  At the end of each fiscal period, unredeemed discount awards and accumulated points to earn a future discount award, are reflected as a liability.  Discount awards are combined in one homogeneous pool and are not separately identifiable.  Therefore, the revenue recognized consisted of discount awards redeemed that were included in the deferred revenue balance at the beginning of the period as well as discount awards issued during the current period.  The following table is a reconciliation of the liability related to this program (in thousands):

Balance at February 3, 2018	$	8,321
Revenue deferred		2,575
Revenue recognized		(2,364	)
Balance at May 5, 2018	$	8,532

Gift Card Liability

· Gift card breakage for gift card liabilities not subject to escheatment is recognized as revenue in proportion to the redemption of gift cards rather than when redemption of the gift card was considered remote.  Ollie’s gift cards do not expire.  The rate applied to redemptions is based upon a historical breakage rate.  Gift cards are combined in one homogenous pool and are not separately identifiable.  Therefore, the revenue recognized consisted of gift cards that were included in the liability at the beginning of the period as well as gift cards that were issued during the period.  The following table is a reconciliation of the gift card liability (in thousands):

Balance at February 3, 2018	$	1,223
Gift card issuances		908
Gift card redemption and breakage		(990	)
Balance at May 5, 2018	$	1,141

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Earnings per Common Share (Tables)

3 Months Ended

May 05, 2018

Earnings per Common Share [Abstract]

Earnings per Common Share

The following table summarizes those effects for the diluted earnings per common share calculation (in thousands, except per share amounts):

	Thirteen weeks ended
	May 5, 2018		April 29, 2017
Net income	$	30,454	$	18,966
Weighted average number of common shares outstanding – Basic		62,169		60,880
Incremental shares from the assumed exercise of outstanding stock options and vesting of restricted stock units		3,455		3,509
Weighted average number of common shares outstanding - Diluted		65,624		64,389
Earnings per common share – Basic	$	0.49	$	0.31
Earnings per common share - Diluted	$	0.46	$	0.29

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Accrued Expenses and Other (Tables)

3 Months Ended

May 05, 2018

Accrued Expenses and Other [Abstract]

Accrued Expenses and Other

Accrued expenses and other consists of the following (in thousands):

	May 5, 2018		April 29, 2017		February 3, 2018
Deferred revenue	$	8,532	$	-	$	-
Compensation and benefits		6,910		8,235		14,181
Sales and use taxes		4,721		3,448		3,865
Freight		4,434		6,943		3,836
Insurance		3,918		2,892		2,768
Real estate related		3,772		3,446		4,019
Advertising		3,339		3,849		5,523
Other		11,441		11,126		12,135
	$	47,067	$	39,939	$	46,327

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Debt Obligations and Financing Arrangements (Tables)

3 Months Ended

May 05, 2018

Debt Obligations and Financing Arrangements [Abstract]

Long-term Debt

Long-term debt consists of the following (in thousands):

	May 5, 2018			April 29, 2017			February 3, 2018
Term loan, net	$	23,655		$	127,968		$	48,530
Capital leases		414			277			463
Total debt		24,069			128,245			48,993
Less: current portion		(10,143	)		(6,340	)		(10,158	)
Long-term debt	$	13,926		$	121,905		$	38,835

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Equity Incentive Plans (Tables)

3 Months Ended

May 05, 2018

Equity Incentive Plans [Abstract]

Stock Option Activity

A summary of the Company’s stock option activity and related information follows for the thirteen weeks ended May 5, 2018 (in thousands, except share and per share amounts):

	Number of options			Weighted average exercise price		Weighted average remaining contractual term (years)
Outstanding at February 3, 2018		4,458,387		$	11.65
Granted		273,419			58.79
Forfeited		(9,220	)		31.28
Exercised		(311,776	)		11.20
Outstanding at May 5, 2018		4,410,810			14.57		6.1
Exercisable at May 5, 2018		2,797,229			8.86		5.1

Weighted Average Assumptions

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model that used the weighted average assumptions in the following table:

	Thirteen weeks ended
	May 5, 2018			April 29, 2017
Risk-free interest rate		2.70	%		2.20	%
Expected dividend yield		—			—
Expected term (years)	6.25 years			6.25 years
Expected volatility		25.84	%		28.36	%

RSU Activity

A summary of the Company’s RSU activity and related information for the thirteen weeks ended May 5, 2018 is as follows:

	Number of shares			Weighted average grant date fair value
Non-vested balance at February 3, 2018		207,346		$	26.15
Granted		62,869			58.76
Vested		(50,645	)		26.09
Non-vested balance at May 5, 2018		219,570			35.50

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Organization and Summary of Significant Accounting Policies (Details)	3 Months Ended
	May 05, 2018 Location State Segment
Organization and Summary of Significant Accounting Policies [Abstract]
Number of retail locations | Location	276
Number of states in which retail locations are located | State	21
Number of operating segments | Segment	1

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Net Sales (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
Assets [Abstract]
Inventories	$ 276,040	$ 255,185	$ 246,630
Liabilities [Abstract]
Accrued expenses and other	47,067	46,327	39,939
Deferred income taxes	57,094	59,073	88,360
Equity [Abstract]
Retained earnings	$ 237,882	213,019	$ 104,391
Ollie's Army Loyalty Program Liability [Abstract]
Expiration period of discount awards from date of issuance	90 days
Balance at beginning of period	$ 0
Balance at end of period	8,532
Gift Card Liability [Abstract]
Balance at beginning of period	1,223
Gift card issuances	908
Gift card redemption and breakage	(990)
Balance at end of period	1,141
ASU 2014-09 [Member]
Assets [Abstract]
Inventories		255,524
Liabilities [Abstract]
Accrued expenses and other		54,180
Deferred income taxes		57,150
Equity [Abstract]
Retained earnings		207,428
Ollie's Army Loyalty Program Liability [Abstract]
Balance at beginning of period	8,321
Revenue deferred	2,575
Revenue recognized	(2,364)
Balance at end of period	$ 8,532
Adjustments Due to ASU 2014-09 [Member] | ASU 2014-09 [Member]
Assets [Abstract]
Inventories		339
Liabilities [Abstract]
Accrued expenses and other		7,853
Deferred income taxes		(1,923)
Equity [Abstract]
Retained earnings		$ (5,591)

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Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Earnings per Common Share [Abstract]
Net income	$ 30,454	$ 18,966
Weighted average number of common shares outstanding - Basic (in shares)	62,169,000	60,880,000
Incremental shares from the assumed exercise of outstanding stock options and vesting of restricted stock units (in shares)	3,455,000	3,509,000
Weighted average number of common shares outstanding - Diluted (in shares)	65,624,000	64,389,000
Earnings per common share - Basic (in dollars per share)	$ 0.49	$ 0.31
Earnings per common share - Diluted (in dollars per share)	$ 0.46	$ 0.29
Stock Options [Member]
Earnings per Common Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	124,738	195,626
Non-vested Restricted Stock Units [Member]
Earnings per Common Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	26,333	0

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Accrued Expenses and Other (Details) - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
Accrued Expenses and Other [Abstract]
Deferred revenue	$ 8,532	$ 0	$ 0
Compensation and benefits	6,910	14,181	8,235
Sales and use taxes	4,721	3,865	3,448
Freight	4,434	3,836	6,943
Insurance	3,918	2,768	2,892
Real estate related	3,772	4,019	3,446
Advertising	3,339	5,523	3,849
Other	11,441	12,135	11,126
Total accrued expenses	$ 47,067	$ 46,327	$ 39,939

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Debt Obligations and Financing Arrangements, Long-term Debt (Details) - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017
Debt Obligations and Financing Arrangements [Abstract]
Term loan, net	$ 23,655	$ 48,530	$ 127,968
Capital leases	414	463	277
Total debt	24,069	48,993	128,245
Less: current portion	(10,143)	(10,158)	(6,340)
Long-term debt	$ 13,926	$ 38,835	$ 121,905

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Debt Obligations and Financing Arrangements, Credit Facilities (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 29, 2016	May 05, 2018	Apr. 29, 2017	Feb. 03, 2018
Debt Obligations and Financing Arrangements [Abstract]
Outstanding indebtedness		$ 23,655	$ 127,968	$ 48,530
Credit Facilities [Member]
Debt Obligations and Financing Arrangements [Abstract]
Maturity date		Jan. 29, 2021
Credit Facilities [Member] | Minimum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Consolidated fixed charge coverage ratio		1.1
Credit Facilities [Member] | Maximum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Total leverage ratio		3.5
Credit Facilities [Member] | Federal Funds Effective Rate [Member]
Debt Obligations and Financing Arrangements [Abstract]
Basis spread	0.50%
Credit Facilities [Member] | Eurodollar Rate [Member]
Debt Obligations and Financing Arrangements [Abstract]
Basis spread	1.00%
Credit Facilities [Member] | Eurodollar Rate [Member] | Minimum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Basis spread	1.75%
Credit Facilities [Member] | Eurodollar Rate [Member] | Maximum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Basis spread	2.25%
Credit Facilities [Member] | Base Rate [Member] | Minimum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Basis spread	0.75%
Credit Facilities [Member] | Base Rate [Member] | Maximum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Basis spread	1.25%
Term Loan Facility [Member]
Debt Obligations and Financing Arrangements [Abstract]
Face amount	$ 200,000
Basis spread		1.75%
Principal payment		$ 2,500
Frequency of principal payment		Quarterly
Repayment of debt		$ 25,000	65,000
Debt issuance costs written off		100	300
Original issue discount written off		7	100
Outstanding indebtedness		$ 23,700
Interest rate on outstanding borrowings		3.65%
Unamortized original issue discount		$ 7	100
Deferred financing fees		$ 100	$ 700
Term Loan Facility [Member] | Eurodollar Rate [Member]
Debt Obligations and Financing Arrangements [Abstract]
Term of variable rate		30 days
Revolving Credit Facility [Member]
Debt Obligations and Financing Arrangements [Abstract]
Maximum borrowing capacity	100,000	$ 100,000
Percentage of most recent appraised value of eligible inventory		90.00%
Outstanding borrowings		$ 0
Borrowing availability		95,300
Letter of credit commitments		4,400
Rent reserves		$ 300
Revolving Credit Facility [Member] | Minimum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Variable unused line fee percentage		0.25%
Revolving Credit Facility [Member] | Maximum [Member]
Debt Obligations and Financing Arrangements [Abstract]
Variable unused line fee percentage		0.375%
Letters of Credit [Member]
Debt Obligations and Financing Arrangements [Abstract]
Maximum borrowing capacity	25,000
Swingline Loans [Member]
Debt Obligations and Financing Arrangements [Abstract]
Maximum borrowing capacity	$ 25,000

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		4 Months Ended	12 Months Ended
	May 05, 2018	Apr. 29, 2017	May 05, 2018	Dec. 31, 2017
Income Taxes [Abstract]
Effective income tax rate	13.80%	25.90%
Statutory federal rate			21.00%	35.00%
Excess tax benefits related to stock-based compensation	$ (3.9)	$ (3.2)

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Commitments and Contingencies (Details) - New Stores [Member] $ in Millions	3 Months Ended
	May 05, 2018 USD ($) Lease Option
Commitments and Contingencies [Abstract]
Number of new store leases | Lease	5
Initial term of leases	7 years
Renewal term of leases	5 years
Future minimum lease payments | $	$ 6.0
Minimum [Member]
Commitments and Contingencies [Abstract]
Number of options to renew leases	3
Maximum [Member]
Commitments and Contingencies [Abstract]
Number of options to renew leases	4

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Equity Incentive Plans, Equity Incentive Plans (Details)	3 Months Ended
	May 05, 2018 shares
2012 Plan [Member] | Stock Options [Member]
Equity Incentive Plans [Abstract]
Vesting period	5 years
Vesting percentage	20.00%
Expiration period	10 years
2015 Plan [Member]
Equity Incentive Plans [Abstract]
Number of shares authorized for issuance (in shares)	5,250,000
Number of shares available for grant (in shares)	3,458,829
2015 Plan [Member] | Stock Options [Member]
Equity Incentive Plans [Abstract]
Vesting period	4 years
Vesting percentage	25.00%
Expiration period	10 years

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Equity Incentive Plans, Stock Option Activity (Details) - Stock Options [Member]	3 Months Ended
	May 05, 2018 $ / shares shares
Number of Options [Roll Forward]
Outstanding at beginning of period (in shares) | shares	4,458,387
Granted (in shares) | shares	273,419
Forfeited (in shares) | shares	(9,220)
Exercised (in shares) | shares	(311,776)
Outstanding at end of period (in shares) | shares	4,410,810
Exercisable at end of period (in shares) | shares	2,797,229
Weighted Average Exercise Price [Abstract]
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 11.65
Granted (in dollars per share) | $ / shares	58.79
Forfeited (in dollars per share) | $ / shares	31.28
Exercised (in dollars per share) | $ / shares	11.20
Outstanding at end of period (in dollars per share) | $ / shares	14.57
Exercisable at end of period (in dollars per share) | $ / shares	$ 8.86
Weighted Average Remaining Contractual Term [Abstract]
Outstanding at end of period	6 years 1 month 6 days
Exercisable at end of period	5 years 1 month 6 days

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Equity Incentive Plans, Weighted Average Assumptions (Details) - $ / shares	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Equity Incentive Plans [Abstract]
Weighted average grant date fair value per option granted (in dollars per share)	$ 18.73	$ 10.56
Risk-free interest rate	2.70%	2.20%
Expected dividend yield	0.00%	0.00%
Expected term	6 years 3 months	6 years 3 months
Expected volatility	25.84%	28.36%

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Equity Incentive Plans, RSU Activity (Details) - Restricted Stock Units [Member]	3 Months Ended
	May 05, 2018 $ / shares shares
Number of Shares [Roll Forward]
Non-vested at beginning of period (in shares) | shares	207,346
Granted (in shares) | shares	62,869
Vested (in shares) | shares	(50,645)
Non-vested at end of period (in shares) | shares	219,570
Weighted Average Grant Date Fair Value [Abstract]
Non-vested at beginning of period (in dollars per share) | $ / shares	$ 26.15
Granted (in dollars per share) | $ / shares	58.76
Vested (in dollars per share) | $ / shares	26.09
Non-vested at end of period (in dollars per share) | $ / shares	$ 35.50
Minimum [Member]
Equity Incentive Plans [Abstract]
Vesting period	3 years
Cliff vesting period	1 year
Maximum [Member]
Equity Incentive Plans [Abstract]
Vesting period	4 years
Cliff vesting period	4 years

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Equity Incentive Plans, Stock-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Stock-Based Compensation Expense [Abstract]
Total unrecognized compensation cost related to non-vested stock-based compensation arrangements	$ 18.7
Weighted average period to recognize stock-based compensation expense	2 years 10 months 24 days
Selling, General and Administrative Expenses [Member]
Stock-Based Compensation Expense [Abstract]
Compensation expense	$ 1.6	$ 1.9

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Transactions with Related Parties (Details) - Operating Leases for Office and Store Locations [Member] $ in Millions	3 Months Ended
	May 05, 2018 USD ($) Lease	Apr. 29, 2017 USD ($)
Transactions with Related Parties [Abstract]
Number of non-cancelable operating leases with related parties | Lease	5
Payments to related parties | $	$ 0.4	$ 0.3