Ollie's Bargain Outlet Holdings, Inc. (OLLI): Business Model Canvas [Dec-2025 Updated]

You're looking at a retailer that consistently beats the odds by buying what others discard, and honestly, it's a fascinating model to dissect. The business for Ollie's Bargain Outlet Holdings, Inc. is pure opportunistic arbitrage: they use deep vendor relationships to secure brand-name goods for typically 30% to 70% off retail, fueling aggressive expansion toward a goal of 613 stores across 34 states. The real engine, though, is their Ollie's Army loyalty program, which captures over 80% of their revenue and boasts over 16.1 million members, underpinning their FY 2025 sales projection between $2.631 billion and $2.644 billion. Let's break down exactly how this 'treasure hunt' approach translates into their Key Resources and Cost Structure below; it's a masterclass in low-cost sourcing and high-volume sales.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that fuel Ollie's Bargain Outlet Holdings, Inc.'s (OLLI) ability to consistently deliver 'Good Stuff Cheap®.' This isn't about building everything in-house; it's about strategic deal-making, especially when other retailers falter. The strength of these partnerships directly impacts the merchandise mix and the cost structure of every store.

Manufacturers and suppliers providing closeout and excess inventory

OLLI's entire value proposition rests on its flexible buying model, which depends on a steady stream of closeout merchandise and excess inventory from manufacturers and suppliers worldwide. The company's growing size is a key lever here; CEO Eric van der Valk noted in the first quarter 2025 earnings call that their increasing scale benefits their buying power. This deal flow has been robust, with inventory up 16% through selective buying as of Q1 2025, capitalizing on the excess inventory created by retail closures and supply chain disruptions.

The success of this sourcing strategy is reflected in the gross margin performance. For instance, the gross margin hit 41.1% in the first quarter of fiscal 2025, though it settled slightly lower at 39.9% in the second quarter of fiscal 2025. This margin strength, despite general industry pressures from elevated raw material and logistics costs, shows OLLI is securing favorable purchase prices.

Liquidation firms for acquiring distressed retail assets like former Big Lots leases

A critical, recent partnership involves liquidation firms that manage the wind-down of competitors. This is where OLLI gains speed-to-market and prime locations. Specifically, OLLI acquired 40 former Big Lots store leases from Gordon Brothers, a liquidation firm, in February 2025. This single transaction, added to prior deals, brought the total number of acquired Big Lots leases to 63. This strategy allows OLLI to bypass lengthy negotiations with landlords, accelerating expansion. The company plans to open 75 new stores in fiscal 2025, a target boosted by these opportunistic acquisitions, later raised to 85 after the second quarter results.

These deals are not without immediate cost, however. The company expects to incur approximately $5M in dark rent-the cost of leasing vacant properties-recorded as a preopening expense for the fiscal 2025 year related to these bankruptcy-acquired stores. For context, the dark rent expense in Q2 2025 was $2.3 million, and in Q1 2025 it was $1.8 million.

Real estate lessors for securing favorable, below-market store leases

The underlying agreement with the lessors for these acquired locations is a major financial benefit. The Big Lots leases OLLI took on feature below-market rents and long-term leases, which management stated allows for 'outsized profitability' for this segment of stores. This contrasts with the traditional, sometimes slower, process of negotiating '2nd generation' retail space, which can take many months. The company ended Q2 2025 operating 613 stores across 34 states, up 16.8% year-over-year, with many of these new spots coming from these favorable real estate partnerships.

Here's a quick look at the scale and financial context surrounding the store base as of mid-2025:

Logistics and freight carriers for managing bulk, non-perishable inventory

While specific carrier contracts aren't detailed, the efficiency of moving bulk, non-perishable closeout goods is vital for maintaining margins. The company's ability to manage logistics effectively is implied by its gross margin performance, which saw a 200 basis point increase year-over-year in Q2 2025, partly driven by lower supply chain costs. This suggests strong negotiation or favorable terms with freight carriers, helping offset the general industry trend where many manufacturers still face elevated logistics costs. The completion of its fourth distribution center in Princeton, Illinois, in fiscal 2024 also supports the infrastructure needed to manage this growing volume of inventory efficiently.

OLLI relies on these external logistics partners to support its growing footprint, which saw 29 new stores opened in Q2 2025 alone.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Key Activities

You're looking at the core actions Ollie's Bargain Outlet Holdings, Inc. takes to deliver its value proposition in late 2025. It's all about the deal and the speed of getting it onto the shelf.

Opportunistic, high-volume closeout merchandise buying and negotiation

The entire model hinges on securing the right inventory at the right price. This means constant engagement with suppliers for closeout merchandise and excess inventory from manufacturers globally. The result for the customer is clear: stores offer Real Brands! Real Bargains! ® at prices up to 70% below traditional retailers.

The buying power is reinforced by the loyalty base; as of the end of fiscal 2024, sales from Ollie's Army members represented over 80% of total sales. This consistent demand helps secure better terms.

Aggressive new store expansion, targeting 85 new stores in FY 2025

Ollie's Bargain Outlet Holdings, Inc. is actively growing its physical footprint, using opportunities created by other retailers' distress. The company is targeting approximately 75 new store openings for fiscal 2025, aiming for a minimum of 10% unit growth for the year. This expansion is heavily front-loaded, with many openings occurring in the first half of the fiscal year.

The execution on this has been strong. For example, the third quarter of fiscal 2025 saw a record 24 new store openings. As of August 2, 2025, the company operated 613 stores across 34 states.

A key part of this growth involves acquiring leases from bankrupt competitors, such as purchasing 40 former Big Lots locations on favorable terms. This strategy is expected to lead to 'outsized profitability' in these specific locations due to below-market rents and long-term leases.

Efficient distribution and logistics management to minimize supply chain costs

Managing the flow of closeout goods is critical to maintaining the low-price promise. Ollie's Bargain Outlet Holdings, Inc. has invested in infrastructure to drive down logistics expenses. A prime example is the fourth distribution center in Princeton, Illinois, which required a capital investment of over $75 million. This 615,000-square-foot facility is designed with robotics and automation to be more efficient than older sites.

This DC supports westward expansion and is projected to serve up to 150 stores eventually, saving the company well over 1.2 million trucking miles annually compared to previous servicing methods. These supply chain efficiencies directly impact the bottom line; in Q3 2025, the gross margin expanded by 100 bps to 41.4%, driven by lower supply chain costs.

The financial results reflect this focus:

• Q3 2025 Net Sales: $517.4M
• Q3 2025 Gross Margin: 41.4%
• Q3 2025 Diluted EPS: $0.58

Merchandising and creating the in-store 'treasure hunt' shopping experience

The merchandising strategy is centered on the 'treasure hunt' environment. This means the assortment is constantly changing, which encourages frequent visits from customers looking for unexpected deals. The company's mission remains to sell Good Stuff Cheap®.

The value proposition is reinforced by the pricing structure, offering savings up to 70% off regular retail prices. The success of this experience is measured by customer engagement through the Ollie's Army loyalty program.

Key operational metrics tied to the in-store experience include:

• Loyalty Program Sales Contribution (FY 2024): Over 80% of total sales
• Comparable-Store Sales Growth (Q3 FY 2025): Declined 0.5%
• Comparable-Store Sales Growth (Q4 FY 2024): Increased 2.8%

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Key Resources

You're looking at the core assets that let Ollie's Bargain Outlet Holdings, Inc. execute its closeout retail strategy. These aren't just things they own; they are the engines driving their value proposition of 'Good Stuff Cheap.'

The customer data asset is significant. The Ollie's Army loyalty program is a powerhouse, exiting the second quarter of fiscal 2025 with 16.1 million members. This program is key because members account for approximately 80% of sales at its stores. Furthermore, the average Ollie's Army member spends 40% more per visit than nonmembers. That's a massive driver for repeat business.

Physically, the scale of the operation is a major resource. As of the second quarter of fiscal 2025, Ollie's Bargain Outlet Holdings, Inc. operated an extensive physical store footprint of 613 stores across 34 states. This physical presence is supported by strategic real estate moves, such as the acquisition of 40 former Big Lots store leases in February 2025 to bolster expansion plans.

Financially, the company maintains a very strong position to capitalize on opportunities. As of the second quarter of fiscal 2025, the balance sheet showed total cash and investments amounting to $460.3 million. This liquidity is broken down into specific components:

The ability to execute the buying strategy relies heavily on the team. Ollie's Bargain Outlet Holdings, Inc. depends on its experienced, centralized buying team with deep vendor relationships. This team's execution is evident in the financial results; the gross margin increased by 200 basis points to 39.9% in Q2 FY2025, driven by lower supply chain costs and higher merchandise margin. The buying model is designed to thrive on market disruption, securing closeout merchandise and excess inventory from suppliers globally.

Here are some key metrics related to the operational scale and customer engagement:

• Comparable store sales increased 5.0% in Q2 FY2025, driven by an increase in transactions.
• The company opened 29 new stores in Q2 FY2025.
• The Zacks Consensus Estimate for the current fiscal year EPS is $3.82.
• The company's trailing twelve-month revenue reached $2.34 billion.

Finance: draft 13-week cash view by Friday.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Value Propositions

The core of Ollie's Bargain Outlet Holdings, Inc. (OLLI) value proposition centers on delivering Good Stuff Cheap, a mission that translates directly into significant savings for the consumer.

Extreme value and deep discounts, typically 30% to 70% off retail prices

Ollie's Bargain Outlet Holdings, Inc. (OLLI) stores offer Real Brands! Real Bargains! ® at prices up to 70% below traditional retailers' prices every day. This deep discount structure is a primary driver for customer retention, as 80% of surveyed loyalty members cited these 'big savings off of the fancy store prices' as their reason for returning. The company's gross margin for the second quarter of fiscal 2025 was reported at 39.9%, demonstrating the margin compression taken to deliver these steep price cuts to the shopper.

The success of this value proposition is evidenced by the growth of the Ollie's Army loyalty program. As of the second quarter of fiscal 2025, membership reached 16.1 million members, an increase of 10.6% year-over-year. Sales to these members represented over 80% of total sales in the first quarter of fiscal 2025, and members spend approximately 40% more per visit than non-members. Furthermore, 90% of respondents in a loyalty member survey shop at Ollie's at least once a month or more.

Ever-changing, unpredictable assortment of brand-name and closeout merchandise

Ollie's Bargain Outlet Holdings, Inc. (OLLI) focuses on a flexible buying model centered on closeout merchandise and excess inventory from manufacturers and other retailers. Brand name closeout merchandise represented approximately 65% of the retail value of merchandise purchases in 2024. This constant influx of unique inventory means the selection is highly differentiated and constantly evolving.

The breakdown of product offerings as a percentage of net sales for the last reported full fiscal year (2024) highlights the diversity of goods available:

The company's best performing categories in the first quarter of fiscal 2025 included food, hardware, electronics, domestics, and housewares.

'Treasure hunt' shopping experience that encourages repeat visits

The store environment is intentionally designed as a treasure hunt. This experience drives the high frequency of visits noted in the loyalty data. The increase in comparable store sales in the second quarter of fiscal 2025 was driven by an increase in transactions, suggesting the treasure hunt aspect is successfully pulling customers into the stores. The company's store presentation is fluid; they do not use planograms or strict layouts.

The physical footprint supporting this experience continues to expand. As of August 2, 2025, Ollie's Bargain Outlet Holdings, Inc. (OLLI) operated 613 stores across 34 states. The company is targeting 75 new store openings for fiscal 2025.

Quality goods across diverse categories like food, hardware, and domestics

The value proposition is built on offering brand name products. The merchandise mix confirms this focus on recognized goods across several key areas:

• Quality goods are found in categories such as food.
• The assortment includes items from hardware.
• The home category, which includes domestics, represents a significant portion of sales.
• Other categories contributing to the diverse offering include electronics and housewares.

The company's net sales for the second quarter of fiscal 2025 were $679.6 million, with comparable store sales increasing by 5.0%.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Customer Relationships

You're looking at how Ollie's Bargain Outlet Holdings, Inc. keeps customers coming back, which is central to their off-price model. It's all about driving high traffic to their stores through a compelling value proposition and a strong loyalty loop.

Ollie's Army loyalty program for personalized offers and retention

The Ollie's Army program is the engine for retention. As of the second quarter of fiscal 2025, ending August 2, 2025, Ollie's Bargain Outlet Holdings, Inc. reported 16.1 million members in the program, marking a 10.6% increase year-over-year. This loyalty base is incredibly valuable; members account for approximately 80% of sales at the stores. Furthermore, the average Ollie's Army member spends 40% more per visit compared to nonmembers. The company is actively enhancing this relationship, including the launch of a co-branded Visa credit card designed to give members additional points wherever the card is accepted.

Recent customer insights from a survey of over 20,000 members in August 2025 show deep engagement:

• 90% of surveyed members shop at Ollie's monthly or more frequently.
• 80% of respondents cite significant savings as the primary attraction.
• 85% regularly find familiar brands at competitive prices.
• 87% share deals with friends and family.

Targeted events also drive immediate results; the reimagined Ollie's Days event in Q2 FY2025 was a huge success and added 1% to comparable store sales for that quarter.

High-volume, low-touch transactional model in-store

The in-store experience is built around the treasure hunt for 'Good Stuff Cheap®,' offering brand name merchandise at prices up to 70% below traditional retailers. This model relies on high transaction volume rather than complex, personalized service interactions, fitting the low-touch expectation of a bargain hunter. The success of this is reflected in comparable store sales growth, which was driven by an increase in transactions. For the second quarter of fiscal 2025, comparable store sales increased 5.0%, which was fueled by more transactions. In the first quarter of fiscal 2025, comparable store sales rose 2.6%, also driven by an increase in transactions. As of August 2, 2025, Ollie's Bargain Outlet Holdings, Inc. operated 613 stores across 34 states.

Here's a look at the recent transaction and sales metrics:

The business thrives on disruption, which feeds the inventory pipeline necessary for this high-volume approach. It's a simple value exchange: great deals for quick purchases.

Digital marketing to engage loyalty members and drive store traffic

Ollie's Bargain Outlet Holdings, Inc. actively invests in its digital marketing capabilities to both acquire new customers and maintain engagement with the existing base, especially the Ollie's Army members. The strategy involves targeted digital advertising to reach specific customer profiles, such as shoppers from recently closed discount retailers. The digital efforts are directly tied to loyalty acquisition; marketing is used to convert casual shoppers into Ollie's Army members. For instance, the company tied its annual Ollie's Army Day promotion to a June event in the most recent year to boost engagement. The focus is on using customer data gained through these channels to inform merchandising and marketing decisions.

Key digital and marketing-related financial context includes:

• Selling, general, and administrative (SG&A) expenses as a percentage of net sales were 25.8% in Q2 FY2025.
• SG&A expenses as a percentage of sales were 28.6% in Q1 FY2025.
• The company is increasing investments in digital transformation and marketing to drive growth.

Finance: draft 13-week cash view by Friday.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Channels

The primary and sole sales channel for Ollie's Bargain Outlet Holdings, Inc. remains the physical retail store footprint, which is the core of customer interaction and transaction execution.

As of the end of the second quarter of fiscal 2025, Ollie's Bargain Outlet Holdings, Inc. operated a total of 613 stores across 34 states, representing a year-over-year increase of 16.8%. The company is aggressively pursuing expansion, with a target to open 75 new stores for fiscal 2025. This expansion is significantly bolstered by the acquisition of real estate from distressed competitors; Ollie's Bargain Outlet Holdings, Inc. acquired 40 former Big Lots store leases in February 2025, adding to 23 leases acquired in 2024, for a total of 63 Big Lots-derived leases intended for conversion. The company's proven new store model consistently generates strong cash flow, achieving an average payback period of approximately two years.

The company website and email infrastructure are heavily utilized to support and drive traffic to the physical stores, primarily through the Ollie's Army customer loyalty program.

• Ollie's Army membership stood at 16.1 million members as of the end of Q2 Fiscal 2025.
• The member base was 15.1 million as of February 1, 2025.
• Members accounted for over 80% of total sales in the period ending February 1, 2025.
• The average Ollie's Army member spends 40% more per shopping trip than nonmembers.
• A survey of over 20,000 members in August 2025 showed 90% shop at Ollie's at least once a month or more frequently.
• The same survey indicated 80% of respondents are attracted by significant savings off regular retail prices.

Emerging digital capabilities are being developed to complement the brick-and-mortar focus, with a Buy Online, Pick Up In Store (BOPIS) pilot being tested, though specific operational scale or financial metrics for this pilot are not yet publicly detailed as of late 2025.

The company's financial position supports this channel strategy, reporting total cash and investments of $460.3 million at the end of Q2 Fiscal 2025, which included $231.2 million in cash and cash equivalents.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Customer Segments

You're looking at the core of Ollie's Bargain Outlet Holdings, Inc.'s strategy right now, which is laser-focused on capturing the value shopper. This segment isn't just one group; it's a broad base anchored by the core value-seeking consumers and budget-conscious households who need to stretch every dollar. As of late 2025, Ollie's Bargain Outlet Holdings, Inc. operates 613 stores across 34 states, built on the promise of offering brand-name merchandise at up to 70% off what the fancy stores charge every day.

The engine driving this customer base is the Ollie's Army loyalty members. This program is massive and sticky, representing the single most important contributor to revenue stability for Ollie's Bargain Outlet Holdings, Inc. The sheer scale of this group is impressive, showing how deeply embedded the brand is with its core shoppers.

The loyalty program's effectiveness is clear when you look at the spending habits. Members are not just signing up; they are actively shopping and spending significantly more per visit than those outside the program. This creates a powerful feedback loop for the business.

Still, the customer base isn't static; there's a growing segment of younger and higher-income customers seeking bargains. This suggests the value proposition is resonating beyond traditional budget shoppers, pulling in consumers who might typically shop elsewhere but are attracted by the deep discounts on known brands. This demographic shift is key to supporting the company's aggressive expansion plans, which include a fiscal 2025 net sales guidance range of $2.631 billion to $2.644 billion.

For these shoppers, the appeal is concrete, as revealed in recent surveys of the loyalty base. They are specifically looking for two things that Ollie's Bargain Outlet Holdings, Inc. delivers consistently:

• Significant Savings: 80% of surveyed members are attracted by significant savings off regular retail prices.
• Brand Familiarity: 85% of these shoppers regularly find familiar brands at competitive prices.

This combination of deep discounts and recognizable merchandise defines the shoppers looking for brand-name products at significant discounts. The company's ability to source this inventory-which supports an expected fiscal 2025 Adjusted EPS range of $3.76 to $3.84-is what keeps these diverse customer segments returning to the treasure hunt experience.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Cost Structure

You're looking at the core costs that drive the Ollie's Bargain Outlet Holdings, Inc. model, which is all about buying low and managing overhead tightly to deliver those deep discounts. The cost structure is dominated by the inventory itself, but the fixed and variable costs of running hundreds of stores and moving that opportunistic merchandise are what you really need to watch.

Cost of Goods Sold (COGS) is, without question, the largest cost driver. The model's success hinges on keeping this number low relative to sales. For the second quarter of fiscal 2025, Ollie's Bargain Outlet Holdings, Inc. reported a gross margin of 39.9%. This was achieved through lower supply chain costs and higher merchandise margins. The fiscal 2025 outlook targets a gross margin of 40.3%. To be fair, the Q1 2025 gross margin was slightly higher at 41.1%.

The next big bucket is Store Operating Expenses, which fall under Selling, General, and Administrative (SG&A) expenses. For the second quarter of fiscal 2025, SG&A as a percentage of net sales was 25.8%. This increase of 60 basis points over the prior year period was mainly due to higher medical and casualty claims, plus slightly elevated store labor expenses.

Here's a quick look at the key cost components based on recent reporting and outlook:

Distribution Center and Logistics Costs are critical because the entire business model relies on moving opportunistic inventory efficiently. When supply chain costs were lower, the gross margin benefited directly. For instance, the Q2 2025 gross margin increase to 39.9% was driven by lower supply chain costs. The company also noted that the new Princeton, IL distribution center began shipping in July, which should impact future logistics efficiency.

The costs associated with expansion are also a factor in the current structure, specifically Pre-opening Expenses. The fiscal 2025 outlook includes approximately $5 million in dark rent expenses related to leases acquired from the bankruptcy auction of former Big Lots stores. In the second quarter of fiscal 2025 alone, pre-opening expenses totaled $9.0 million, which included $2.3 million for that dark rent.

You can see the major cost drivers breaking down like this:

• COGS, which is the cost of the 'Good Stuff Cheap®' inventory.
• Store labor and rent, which make up the bulk of the SG&A.
• Logistics costs tied to the flexible, opportunistic buying model.
• One-time or temporary costs like the dark rent from recent acquisitions.

Finance: draft 13-week cash view by Friday.

Ollie's Bargain Outlet Holdings, Inc. (OLLI) - Canvas Business Model: Revenue Streams

You're looking at how Ollie's Bargain Outlet Holdings, Inc. brings in the money, which is pretty straightforward for an off-price retailer. The vast majority of their revenue comes from moving physical goods out of their stores, which is their core business.

For the full fiscal year 2025, management has guided net sales to fall within a specific range. Specifically, Ollie's expects full-year net sales to be between $2.631 billion and $2.644 billion. This projection reflects their aggressive expansion strategy, including new store openings, some of which are former Big Lots locations acquired through bankruptcy proceedings.

A key driver of their sales volume is the loyalty program, Ollie's Army. This program is central to their customer retention strategy. Sales generated from Ollie's Army members consistently account for a significant majority of their top line. Honestly, sales from these members represent over 80% of total sales. As of the second quarter of fiscal 2025, the membership base itself had grown to 16.1 million members.

Here's a quick look at the key components driving the expected revenue for fiscal 2025, based on management guidance and reported figures:

Beyond the merchandise sales, Ollie's Bargain Outlet Holdings, Inc. generates a smaller, but still notable, stream from its balance sheet. Because the company maintains a strong cash position, they earn money on their holdings. Interest income from cash and investments is estimated to be approximately $18 million for fiscal 2025. This estimate factors in the potential for lower interest rates during the year.

The revenue generation is supported by several operational metrics that feed into the final sales number:

• Comparable store sales growth projected at 3-3.5% for FY 2025.
• Total store count expected to grow, with a target of at least 10% unit growth in FY2025.
• Net sales for Q2 2025 reached $679.6 million, up 17.5% year-over-year.
• The business model relies on a flexible buying model focused on closeout merchandise and excess inventory.

Finance: draft 13-week cash view by Friday.