Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) Q4 2022 Earnings Call Transcript

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Rob Helm: Yeah. To John’s point on the back half, our supply chain cost averaged in the range of 11% of sales. We would expect that should transportation continues to ease and we will do better than that, but we don’t have a crystal ball in terms of what’s going to happen in the transportation market, and we wanted to remain conservative with our guidance.

Edward Kelly: Okay. And then just one more quick one for you on labor. We are seeing a lot of investment in labor across retail. If you look at your — I think your average hourly wage, it’s probably on the lower side, but I don’t know how you feel about that. Just thoughts on wage rates, labor hours, any need to invest there at all?

Eric van der Valk: Yeah. This is Eric. I’ll take the question. We have invested pretty significantly over the last two years in wages. We do continue to experience some wage pressure and we continue to invest. It’s really market by market, it’s we’re reacting to ensuring that we retain and attract talent in our stores. Cash flow is pretty decent at this point. So we’re feeling pretty good about that across both stores and distribution centers. So we continue to invest to ensure that we have our pretty stable.

Edward Kelly: Okay, thank you.

Eric van der Valk: Thanks, Ed.

John Swygert: Thanks, Ed.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Mark Carden from UBS. Your question please.

Mark Carden: Good morning. Thanks so much for taking the question. So to start on deal flow, you noted it’s strong overall. At this stage, do you think you have mostly passed through the biggest wins that emerged from some of the unusual challenges that your competitors faced? Would you still expect for a few more quarters of that type lifts related to these? Or is it more just normalized solid deal flow at this point?

John Swygert: I would — Mark, it’s hard to tell that, but I can tell you the momentum that the merchants are feeling. There’s still some pretty large pockets out there of deals that people still haven’t worked through. And I do think that’s going to continue for, I don’t know, another two quarters is my guess. But the deal flow is, we always try to explain everyone, deal flow is pretty strong all the time, but right now, it’s extremely strong and the merchants are being very selective with their buys out there, and I think it’s going to help us drive the business.

Mark Carden: Okay, great. And then just a quick follow-up. As you think about your new store openings in the year ahead, how are you thinking about the balance between new markets and existing markets?

John Swygert: Yes. It’s defining new markets and existing markets for us is a little difficult, because we have a lot of states that are very, very much under penetrated. So we still view those as newer markets for us. But when we look at it, I’d probably tell you, 40% would be considered — 40%, 50% is new and 50%, 60% is existing.

Mark Carden: Great. Thanks so much and good luck.

John Swygert: Thank you, Mark.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Simeon Gutman from Morgan Stanley. Your question please.

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