Good afternoon, and welcome to Ollie's Bargain Outlet conference call to discuss financial results for the second quarter of fiscal 2021. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization from Ollie's. As a reminder, this call is being recorded. On the call today from management are John Swygert, President and Chief Executive Officer, Jay Stasz, Senior Vice President and Chief Financial Officer, and Eric van der Valk, Executive Vice President and Chief Operating Officer. I will turn the call over to Jean Fontana, Investor Relations, to get started. Please go ahead, ma'am. Thank you. Good afternoon. A press release covering the company's financial results was issued this afternoon, and a copy of that press release can be found in the investor relations section on the company's website. I want to remind everyone that management's remarks on this call may contain forward-looking statements, including, but not limited to predictions, expectations, or estimates, and that actual results could differ materially from those mentioned on today's call. Any such items, including with respect to our future performance, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these forward-looking statements, which speak only as of today, and we undertake no obligation to update or revise them for any new information or future events. Factors that might affect future results may not be in our control and are discussed in our SEC filings. We encourage you to review these filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q, as well as our earnings release issued earlier today. For a more detailed description of these factors, we will be referring to certain non-GAAP financial measures on today's call that we believe may be important for investors to assess our operating performance. Reconciliation of those most closely comparable GAAP financial measures to the non-GAAP financial measures are included in our earnings release. With that, I will turn the call over to John. Thanks, Jean, and hello, everyone. Thank you for joining our call today. We are very pleased with our second quarter performance as we were up against the largest volume and most profitable quarter in Ollie's history. We delivered an incredible two-year comp stack of + 15.3% as comparable store sales declined 28% against last year's extraordinary 43.3% comparable store sales increase. Our team's response through these unprecedented and challenging times remains nothing less than amazing, and I am grateful for the collective dedication and hard work that have truly been the drivers of our success. First and foremost, we are a growth company in one of the most attractive sectors in retail, extreme value, and we believe we have the scale, the know-how, and the relationships to benefit from the continued disruption in the marketplace. We have tremendous runway to expand our footprint, and we believe the value proposition of our business supports our long-term growth plans. As always, we remain laser-focused on the execution of our plans and confident in our ability to continue to deliver profitable growth. It all begins with our amazing deals that provide incredible values to our customers. Deal flow remains as strong as ever, and we are seeing fantastic offers across all of our categories. The current environment plays to our strengths. We see closeout opportunities generated in a number of ways, ranging from excess inventory, overruns, canceled orders, package changes, product innovation, and bankruptcies. We are very excited about the quality of closeouts still coming our way. We have the proven ability to handle deals of any size, making us the partner of choice by our vendors. Dry powder and our open-to-buy and exceptionally strong liquidity position keep us ready at all times to capture the remarkable opportunities we see. As I said before, we thrive in times of market disruption. We continue to expand the Ollie's brand to new communities and customers. We opened 12 stores during the quarter and have opened a total of 30 stores this year, including two relocations. Milestones in the quarter include the opening of our 400th store and the entry into three new states, Vermont, Missouri, and Kansas, expanding to a total of 28 states. Overall, the team has done an amazing job executing these projects despite the added challenges of opening and operating during the pandemic. Due to permitting and construction delays, we now expect to open 46-47 new stores this year. We are excited about the availability of great real estate sites as we continue to build out our store pipeline, which looks strong into next year and beyond. Our near-term target is 50 - 55 store openings per year. This cadence ensures our ability to maintain the all-important Ollie's culture in our new stores, a critical component of our success and key element of our consistent profitable unit growth. Ollie's Army continue to be a significant driver of our sales in the quarter, and membership keeps growing. The Army increased 11.2% over the prior year, ending the period with a record 12.2 million active members as a result of high retention rate of Ollie's Army members, coupled with the strong growth of new customers. Members are highly valuable to us as they shop more frequently and spend more money with us. This is demonstrated by the achievement of an 80% sales penetration in the quarter, our highest ever. Growing our member base is a strategic priority. To that end, we continue to refine our marketing programs and redeploy dollars to optimize spend and communicate with our customers in the most relevant way. Our focus is threefold. Deepen engagement with our existing customers, entice lapsed customers to return, and acquire new customers. We are testing different strategies for each, and we have been pleased with early reads so far, particularly with the recent digital initiatives. Examples include customized ads, channel testing, and card- link offers for new customer acquisition. We are in the early stages, and we'll continue to test, learn from our efforts, and ramp up these tactics, our most successful dollars best deployed. Like other retailers, we continue to see broader industry headwinds, including supply chain challenges, labor, and inflation impacting our business. We are navigating the supply chain issues and currently expect timely deliveries of product for the back half of the year. While we have been successful in hiring our distribution centers and stores, we are still working diligently to fill positions, recognizing we are operating in a highly competitive market. We are also experiencing incremental international and domestic transportation costs, which we are working hard to offset. Overall, we believe that many of these challenges are transitory in nature, and in the meantime, we will continue to leverage the flexibility of our business model to mitigate these cost pressures. We have lots of quality product, and inventories are in good shape overall, ending up 14.2% compared to last year. That said, labor challenges persist, particularly at our distribution centers, which has impacted the pace of our throughput. Importantly, we see this as a temporary issue, and we are taking the necessary actions to increase productivity and expect trends to continue to improve. Eric van der Valk, who joined us in May as Executive Vice President and Chief Operating Officer, is overseeing our supply chain on an interim basis while our search for a new leader continues. Eric has deep knowledge and strong experience in supply chain and has been immersed in our team since joining us. He has already identified and implemented opportunities to drive productivity. We are moving the needle in the right direction. Looking at the third quarter, we continue to come up against our own great numbers from a year ago as we delivered record sales and profits for the third quarter of 2020, driven by comp sales of 15.3%. This year, we expect comp sales growth between between 5% and 7% on a two-year stack basis for the third quarter. While there are a lot of uncertainties in the macro environment, we are focused on leveraging our strengths to navigate this landscape and capitalize where we can on market disruption. We continue to feel very good about our ability to provide great deals to our customers, grow our store base, and expand Ollie's Army. We will continue to do what we do best, work as a team, stay focused on what we can control, and execute our business model. Looking ahead, our long-term growth algorithm remains intact, and I am as bullish as ever about our business. I want to personally thank our almost 10,000 team members for all they are doing to serve our customers and communities and support each other in this challenging environment. As we say, we are Ollie's. I'll now hand the call over to Jay to take you through our financial results. Thanks, John, and good afternoon, everyone. I want to start by thanking the entire Ollie's team for their incredible teamwork and dedication that made this quarter the success that it was. For the quarter, net sales totaled $415.9 million, a 21.4% decrease from the prior year. Comparable store sales decreased 28% in the quarter compared with the prior year record-setting 43.3% comp increase, resulting in a + 15.3% two-year stack. In the quarter, we opened 12 new stores, ending the period with 409 stores in 28 states, an 11.7% year-over-year increase in store count. Since the end of the second quarter, we've opened another seven stores for a total of 30 this year, including two relocations. These stores drive our growth, and we are very pleased with their productivity and ROI as our new stores have a payback of less than two years. Gross profit decreased 21.2% to $163 million, and gross margin increased 10 basis points to 39.2%. The increase in margin was due to improvement in merchandise margin, partially offset by deleveraging of supply chain costs, primarily due to higher transportation expenses as expected. SG&A expenses increased 0.9% to $110.1 million, primarily due to additional selling expenses from our new stores and partially offset by continued tight expense controls throughout the organization. SG&A, as a percentage of net sales, increased 590 basis points to 26.5% as a result of significant deleveraging due to the decrease in sales year-over-year. Operating income totaled $45.7 million, a 50.3% decrease from the prior year. Operating margin decreased 640 basis points to 11%. Adjusted net income, which excludes tax benefits related to stock-based compensation, decreased 50.7% to $34 million. Adjusted diluted earnings per share decreased 50% to $0.52. Adjusted EBITDA decreased 45.6% to $54.1 million, and adjusted EBITDA margin decreased 580 basis points to 13% for the quarter. Capital expenditures in the quarter totaled $8.2 million, primarily for new and existing stores. This compares with $5.7 million in the prior year. At the end of the period, we had no outstanding borrowings under our $100 million revolving credit facility and $444 million in cash. Our proven track record of robust cash flow generation is a testament to the strength of our model, allowing us to fund our growth, invest in the business, and strategically buy back shares. Year to date, we have invested almost $47 million to repurchase our shares, putting our cash to good use and increasing shareholder value. Due to continued uncertainties, we are continuing our policy of not providing full guidance, but I will share with you some high-level thoughts on the remainder of fiscal 2021. Comp sales comparisons in the third and fourth quarters are challenging as we continue to perform at unprecedented levels last year, given the top-line benefits from economic stimulus. As a reminder, our comparable store sales growth was 15.3% in the third quarter last year. For the third quarter this year, we expect comp sales growth of 5%-7% on a two-year stack basis. We are anticipating continued headwinds in gross margin due to the ongoing supply chain pressures impacting all retailers, including increased transportation and labor costs. We are doing what we can to manage and mitigate the higher expenses. As these cost pressures have significantly increased in the back half of the year, we are now expecting a revised gross margin rate of approximately 39.4%-39.5% for the full year. Our current plans include the following: the opening of 46-47 stores, including two relocations. With 30 stores under our belt, we feel confident that we can achieve our target, but we are dependent on local permitting and construction timing. An effective tax rate of 25.4%, which excludes the tax benefits related to stock-based compensation, and diluted weighted average shares outstanding of approximately 65.8 million before any impacts from future share buybacks. We will continue to evaluate our plans and respond to the marketplace as necessary. It's the effectiveness of our nimble operating model, our strong financial position, and long-term growth opportunities that keep us excited for the future. I'll now turn the call back to the operator to start the Q&A session. Operator? Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Matthew Boss with JPMorgan. You may proceed with your question. Great, thanks. Maybe to start on same-store sales, comps in the second quarter were up 4% relative to 2019, and then your guidance for the third quarter is up 3%-5% versus 2019. Basically, third quarter guidance unchanged relative to the second quarter at the midpoint. John, maybe what did you see from comp trends as the second quarter progressed? Any color on August so far relative to that 3%-5% comp guide for the third quarter relative to 2019? Yeah, Matt, let me take August first. We're really not going to commit a comment on inter-quarter right now due to the fact that it's a little bumpy throughout the quarter, and we feel very, very comfortable where we're at and where we're going to land for the full quarter basis. Talking inter-quarter right now is kind of where we were in Q2. It doesn't make a lot of sense because there's definitely some choppiness in the months as we progress through the stimulus last year and where we're at this year as well. I think we would tell you we're comfortable where we're guiding to on a relative basis for the numbers. Very similar to Q2 numbers. Obviously, during Q2, there was a lot of stimulus dollars out there this year from March, April, and May. Those dollars, we saw them really slow down in June and July. We saw a slowdown from where we were running in May, but we're still very excited to deliver a two-year stack of 15.3%, and we felt real good where we landed. I think the most important piece is the inventories are in real good position. The deal flow is strong, and we're excited where we are right now in position for Q3. Great. Maybe just to follow up on gross margin. You exceeded 2019 gross margin in both the first and the second quarter, I think by about 10-20 basis points. Could you just walk through back half merchandise margin and freight assumptions, or just basically what's in there to now get to the 39.4% full year, and any change to 40% gross margin if we were thinking about next year and beyond? Yeah, Matt, this is Jay, and I'll take that. Obviously, with these continued headwinds on the supply chain, especially on the transportation front, we're seeing big increases there, and they're not really going to abate anytime soon. We took the full year margin. Last call, we had talked about being at 39.7% or 39.8% for the full year, and we've taken that now to the 39.4%-39.5% year point. We did do a great job in the quarter managing the merchandise margin, just like we talked about. We can, to a large extent, work hard on the buy side, work hard on price changes, especially in this inflationary environment, so that we can have a strong merchandise margin, which is what we did in Q2. We're going to control what we can on the cost side. Really then looking at that for the back half, we're obviously going to have an impact on the margins in Q3 and Q4. We probably have a little bit more pressure in Q3 as that unwinds versus Q4 but spreading it back to the 39.4%-39.5% for the full year. Then to your point for next year, certainly, we do expect, just because a lot of these costs on the supply chain, they flow with the inventory. We do expect that in the first half of next year, we would have increased pressure on the gross margin. Obviously, we're not giving guidance necessarily for the back half, so we're not in a position to give specific guidance there. As we look at next year, we would expect some additional margin pressure, certainly in Q1 and to some extent in Q2 as well. Best of luck. Thanks, Matt. Thanks, Matt. Thank you. Our next question comes from Kate McShane with Goldman Sachs. You may proceed with your question. Hi. Thank you so much for taking our question. I guess with regards to inventory, you were very detailed in your prepared comments that you still are having a relatively decent time obtaining inventory despite some of the supply chain challenges. Could you maybe talk a little bit more about your strategy there to ensure that you're still getting inventory into your stores? Sure. I think one important thing is that I think there's a misconception potentially out there in the marketplace, is there's no shortage of closeout deals in the marketplace today. Our merchants are doing a great job of getting product on the marketplace, and we really are seeing a lot of flow in every category that we buy in each and every day. There's definitely not an issue with the merchandise side of the business. Supply chain has definitely been a challenge for all of us. We are, I think, fortunate that we are not a huge importer, which a lot of other folks are, that have created a lot more headaches for them. We have our fair share of headaches, but nothing that a lot of other folks are seeing. I think we're in pretty good shape to get the goods into the building and out to the stores. We have a handful of stores that I would tell you today we're not overly pleased with where we're at. We're working very diligently to take care of that. The majority of our stores are in very good shape, and we're dealing with those exceptions at this point in time. Thank you. Thank you. Thank you. Our next question comes from Simeon Gutman with Morgan Stanley. You may proceed with your question. Hey, guys. This is Michael Kessler on for Simeon. Thank you for taking our questions. Hey, Michael. Hey. I wanted to follow up on Matt's question on the sales. Looking at your two-year geometric stacks, they're running in that 3%-4% range in the last two years, basically kind of in line with your long-term algo of a 1%-2% comp. This is occurring through arguably the most transformational or unexpectedly disruptive period that we may see in some time. I guess my question is, how are you viewing this outcome? I think some may look at this and say you had this incredible uplift last year, but it doesn't seem like you're necessarily holding on to all of that business you picked up. I'm just curious how you'd respond to that. Is it any concern, and especially given that the, as you mentioned, the closeout pipeline continues to be very strong? Yes. Michael, I think the main takeaway is last year was an unprecedented year. It's something that we can't duplicate. Included in our numbers from last year were about 700 basis points of PPE that's not selling this year. We're doing much better when you peel out the PPE and the, I'll call it, the frenzy buying for people from a COVID perspective. It's not fair just to look at a 4% comp or a 3%-5% comp. That would not be the right way to look at it. I think we've done a phenomenal job holding onto the new customers that we were able to attract during the COVID period. All of our data tells us we're doing better at having them repeat as a customer than we had in the past. I would venture if you would peel off the onion a little bit more with backing out PPE, you'd probably be a little bit more impressed with our overall results from last year and this year. I think we're excited where we're sitting, and I think we're in great shape. Okay. That is helpful. My follow-up on SG&A, if we look at your SG&A rate relative to Q2 of 2019, it did delever by a little bit, and you've shown a great track record over the years of leveraging that SG&A line over time. I guess, is the labor piece, is that really the key kind of change relative to what we've seen over time? I guess any other call outs and how we should be thinking about that line moving forward in maybe a more normalized comp environment. Thank you. Sure. That's a good question. You're right. We did delever a little bit compared to 2019, and I would say that is driven primarily on the labor side. Obviously, compared to last year with the wild swings in sales, we expected to delever. That SG&A rate for the quarter is right in line with what we were expecting, and we really think of it on a one full year basis. We've talked about, kind of on an annual basis, an SG&A target of, say, in the 25% range. I think that holds true for this year as well. Generally, of course, that's dependent on sales. As we've said, the market is very competitive for store hiring. For us at the stores, we kind of adjust market by market, store by store. We're not going to do something where we're going to take minimum wage up across the board. That would be very impactful. We have addressed it so far this year, market by market, where we've needed to. That's put a little bit of pressure on our payroll and our wages there. Again, on a full year basis, we're going to continue to manage to that. I would estimate, on kind of a normalized basis, that 25% SG&A rate on an annual basis is a decent target. Okay. Thank you very much. Thank you. Our next question comes from Randy Konik with Jefferies. You may proceed with your question. Hey, thanks a lot, guys. Just go back to the stimulus impact and things like that. Have you been able to kind of think about parsing that out and thinking about how much of that impacted the business and what's the normalized run rate going forward? When you look at the, second, when you look at the spending patterns of the Ollie's Army, how did they change their spending in terms of transactional velocity versus ticket in terms of impacting the comps in the quarter? Sure, Randy. Let me take the first one with regards to the stimulus and the impacts on the sales. I got to tell you that that's probably one of the toughest items for us to peel off and figure out. There's been so much noise in the last 18 months with other retailers being closed, the reopening of other retailers, the timing of stimulus payments, with stimulus payment one, two, and three. We've not been successful trying to peel that off. I think the main takeaway from our perspective would be our long-term algo on the comp of 1% to 2% is 100% intact, and we feel very comfortable with it. I think right now we're performing a little bit ahead of that. We'll see where we go with it, but that's how I would try to look at the business. We're a growth story side, always focused on the new store growth, and then the comps would be secondary from our perspective. I think that's how we look at the business from my perspective. With regards to the Ollie's Army. The Ollie's Army, as we said in the script, they now have reached a record of 80% of our overall sales penetration, which I feel is phenomenal. We've done a great job on our conversions to the Army from the new customers and retain our existing Army base. In terms of the overall visits, the Army has remained very consistent. They're actually slightly up over last year in terms of their frequency. Their spend's a little bit down over last year just because of the lack of PPE, but they're outpacing the non-Ollie's Army members a little bit more than they have in the past. We've always said they outpace them at about 40% more in sales on a per transaction basis. They're closer to 42%, 43% right now. Got it. One last one. You made the point about other retailers that have a lot of import are seeing a lot more of issues around added costs to their supply chain, et cetera. When you look at your supply chain, not just the cost, but the actual processing time, let's say, in the warehouses, let's say those are down a little bit. When do you expect that to normalize out in terms of, forget the cost, more about being able to process what you need to process on a normalized basis, going forward. When does that occur? Yeah, I think right now, Randy, I would tell you we've made a lot of progress in the last eight weeks, we're on a pretty good pace to get things pretty much where we want them to be. I would tell you, we would think on a conservative basis, we should be right on track by the end of Q3. Perfect. Thanks, guys. Thanks, Randy. Thank you. Our next question comes from Brad Thomas with KeyBanc Capital Markets. You may proceed with your question. Hi, thanks for taking my question. I was curious if you could talk, John, a little bit about how you all are looking at pricing in this backdrop where you're getting inflationary pressures. Clearly, your competitors that you comp against are pushing through some higher prices. Can you talk about what you all are doing and your flexibility to do that perhaps quicker in areas where you're seeing more inflation? Brad, at this point, we're no different than any other retailer in terms of having cost pressures all around the board. What we're doing is we're doing our best to keep the value proposition intact because that's our entire model. Our merchants are in a lot of the competitors' stores each and every day to see where their pricing's going and where we can make the adjustments that they're making, where we're making the appropriate adjustments to keep the value there. Get a little more for our product than we were previously to offset some of these costs, and they're working tirelessly to do this. We're actually expanding the merch margin to offset some of these supply chain costs. I don't think we'll be able to do it all this year, but we'll get much closer than most people can do because we do have that ability to buy backwards and move more into the margin and push a little bit harder on the vendors in order to get the margin profile we're looking for with the price we're getting. John, can you talk a little bit more about the quality of the inventory you have here today? I think it was very well anticipated that sales were going to slow against such record numbers last year. How do you feel about the quality of the inventory you have and the need for markdowns going forward? I would tell you, Brad, I feel very comfortable with the quality of our merchandise. Our merchants were just in Las Vegas this past week in ASD, and they had a very successful show. I think much more successful than we anticipated. The deal flow for us on the closeout world is very positive. The quality of the merchandise is phenomenal. In terms of markdown risk or anything to clear anything, we're in great shape. I would tell you, we have no fears with regards to what we're carrying that's not going to sell. I think the merchants have bought the right product in the store, and everything looks pretty fresh and looks good and is priced properly. I think we're in real good shape on a markdown front and a merch margin front. If I could squeeze a quick point on how to think about holiday? I know it's a long way out, and you're not giving real explicit guidance, but is there anything that you're seeing right now from a trend standpoint in terms of what's selling, what's not, to give you any more confidence about how you all might be able to fare this holiday season? Obviously, we're not trendsetters. We're trend followers, but there's not really anything out there that I think we're going to get our hands on that's a spinner deal or anything like that I can see today. I would tell you, we think we're well positioned on the toy front. Toys is a big part of our business in the fourth quarter. I think our seasonal holiday will be better than ever. I think we've made great strides in making changes there where our product looks much more relevant for the consumer today. I think overall, the gift-giving front, we're well positioned this year as well. I think from my perspective, we Should have a pretty good successful holiday period, barring any unforeseen things. COVID is starting to rear its head up again, and the virus is starting to impact people and how people are reacting, so we just got to watch that. From our perspective, from a merchandise front, we're in real good shape. Great. Thank you, John. Thanks, Brad. Thank you. Our next question comes from Peter Keith with Piper Sandler. You may proceed with your question. Hi. Thanks everyone. I guess I have questions. I think you guys, the script said that Eric, your new COO, is on the call. Yeah, I'm here. You've been with the company three months. I guess that's usually a pretty good time period to assess changes you can make or initiatives you can implement. Eric, I guess I'd be curious on anything you see as an opportunity coming in with a fresh set of eyes on Ollie's, to make some positive change. Sure. Yeah, I appreciate the question, Peter. I was trying to blend into the paint here. Thanks for calling me out. It's been a great experience onboarding with the company. As you said, I've been here a little over three months. I've enjoyed meeting some very smart and talented people at Ollie's who are just so committed to the mission. I know coming in, just the reflection, I was super impressed with how Ollie's has been able to retain its strong entrepreneurial spirit and has remained committed to making product the absolute hero of the store experience, even while it continues to grow at this fast pace. That's been super impressive and this team has certainly been incredibly resilient through an unprecedented time. I'm proud to be part of this story. To answer your question, I've been very focused in the supply chain discipline, since I started, and certainly had experience with this very challenging macro environment that we're in in my prior life and came into a very similar environment here. What I'm seeing is focusing the team on continuous improvement and process improvement and improvements in productivity because labor is such a huge challenge, both the supply of labor and the expense related to labor and wage rates, that we've been able to move very fast as a team. We have a great team here in supply chain. We've been able to move very fast as a team to make improvements in some process change in various ways to get more productivity and more throughput capacity, without it having to be hiring more people to do it, if that makes sense, Peter. Yeah, it does. I guess maybe if you provide some specific examples, I guess that would help us even understand it better. Sure. Yeah, I'll give you two examples. We're making numerous improvements. Probably some of the larger ones, we've consolidated our deliveries to stores, which was probably the single biggest improvement we've made after I first started, where most stores were getting two or even three deliveries a week. Now most stores are getting one delivery a week. That's a significant enhancement in productivity throughput and a reduction in transportation expense. Another is we're making some changes to our warehouse management system, some modifications to automate some process. Probably the last highlight of significance is we're making investments in material handling equipment, specifically in our Georgia facility to enhance its productivity. Okay, great. Thanks so much for the feedback and good luck, guys. Sure. Thanks, Peter. Thank you. Our next question comes from Edward Kelly with Wells Fargo. You may proceed with your question. Hi, guys. Good afternoon. I wanted to ask you about the sales line. Your sales this quarter were up 25% to 2019, which was below the street, and I think because, at least the way it looks in the model, right, anyway, because new store productivity looked low. Just kind of curious as to what your thoughts are on that. Is that where some of the throughput stuff is? How do we think about that in Q3? It does look like your geometric stack in Q3 is gonna be similar. Would the 25 be better in Q3, or do those challenges remain? I'm just kind of curious as to what's going on there. Yeah. Edward Kelly, this is Jay Stasz, I think really, we saw that consensus estimate too. We're not sure how you guys built that model up. From our standpoint, maybe it was a new store productivity issue on the model side. We are right in line with our expectations. Our new stores are actually running a little bit ahead of our expectations. That said, right, trying to compare 2020 to this year, obviously the new stores that we opened last year, just like our comps, were very productive because of the stimulus that was in the marketplace. Certainly that was the case during Q2. Because of the big swing from 2020 to 2021, our new store productivity, our plan on kind of a base model was very different than it would normally be, probably in the 55%-60% range, where it's normally low 90s call it, or 90. We're not sure that you guys took that into account in the model. The other impact that could have been coming out is, we have had little bits of shift in timing in opening our stores in the quarter, and that's going to continue in the back half. We're going to get these stores open, we are, especially in the back half, experiencing. A number of weeks of delays in those openings. I think the driver for Q2 was really however you guys modeled the new store productivity. It was a disconnect and maybe didn't take it back down to normalized levels. I think, Ed, one big takeaway or one big thing for you to make sure you are clear on is the inventory or the throughput had absolutely nothing to do with any sales deficiency on the new stores. The new stores performed very well. Even like Jay said, they probably performed a little bit ahead of our plan. The inventory in the stores was very high quality and very strong so that the inventory at new stores had zero negative impact on the performance of those guys. Thank you. Our next question comes from Paul Lejuez with Citi. You may proceed with your question. Hey, everyone, this is Brandon Cheatham on for Paul. Thanks for taking our question. I think you mentioned there were a handful of stores that you all were disappointed with or working on. Just wondering if we could dig in. Is there anything unique about them, like geographically, or are they similar vintage and any additional color on what you might be able to do to remedy that? I wouldn't say disappointed at all. I think what I said was we had a handful of stores that were a little lighter in inventory than we'd like to see them at this point in time. The performance of the stores are all very strong, so I don't want anyone to read that the wrong way. We have some opportunities to get a little more inventory in those boxes to make them look a little bit better. Like I said, it's a handful. It's not the 10% rule per se of where we see the stores at. Those stores are performing just fine. I'd like to see them perform a little bit better, but I got to get a little more inventory into them. That's a very small part of our overall company. Everything else is in real good shape. Those stores predominantly are located down in the south. Okay. On the markets where you have adjusted your wages, has there been any change since states have rolled off some incremental unemployment benefits? Just any additional information on that. Yeah. With some of the states that have rolled off the unemployment early has made hiring easier, for sure. We saw a big change in those states that did that. It made it a lot easier to hire. The states that have not done that yet still have definitely a larger challenge to hire people, but that's coming up. That's right around the corner here, September. Got it. Thanks and good luck. Thanks. Thank you. Thank you. Our next question comes from Rick Nelson with Stephens. You may proceed with your question. Thanks. Good evening. A question about the Ollie's Army event, how that went in May and your thoughts for the December event. I know last year was multiple days. What are you thinking for this year? Rick, with regards to, I'll talk about the holiday mailer, which we used to call the Buzzard mailer. The last year, we had changed Ollie's Army Night to be a week-long event because of the issues with COVID and not knowing the landscape when we had to go out to print. We still have time to make that final decision on how we're going to proceed this year for the holiday mailer. My inclination today is that we're going to go back to a one-night event only on that Sunday in December. That's what we're planning today, but we're watching everything, and we have till October to make this decision. Once we get a little more information, we'll make hopefully the best decision for our stores and for our customers. I'm leaning to go back to a one-day event on a Sunday. Our May event, which we had, was just fine. Everything worked great for that. We were excited about it for the Boot Camp mailer, and we were very pleased with the results there. Gotcha. Thanks for that, John. Curious about imports, what they represent as a% of the sales and where you see that going over the longer term. Rick, this is Jay, the good news for us is that we are not a big importer generally, especially compared to some other retailers. For us, it's probably about 14%-16% of our annual purchases. We can have some peaks and valleys in that related to seasonal product. That's where it's at. It's not a huge percentage. Eric and the team are working hard to work through the bottlenecks in the supply chain and get those goods delivered. Great. Yeah, I would say, Rick, from my perspective, we don't have plans. Ideally, we don't want to increase that number. Closeouts are our primary focus, but we will augment where needed as we continue to grow. Thank you, and good luck. Thanks, Rick. Thank you. Our next question comes from Jeremy Hamblin with Craig-Hallum. You may proceed with your question. Thanks. It sounds like at a high level, you're returning to your long-term growth algorithm, both in terms of unit performance, but then in terms of margins, for the most part, in line minus some supply chain costs and then maybe a little bit on labor, although that sounds like that should return to a normalized level. I want to focus on the unit openings, 46-47, a little bit lower than you were thinking back in May. In terms of thinking about the color around that and why the total unit growth is going to be a little bit, three, four units shorter or fewer than what you had been thinking before, could you add a little color into that? Then thinking about that moving forward, you had talked about 50, maybe up to 55 units in a year. Is there any change on that part of Ollie's growth story? Sure. Jeremy, the first one's the easiest. The overall 50-55 is fully intact, and that's our plan going forward. With regards to this year, the 46-47 really has become necessary strictly due to the fact the permit delays and construction delays. We have 50 signed leases, they just can't be delivered in time. There's nothing earth-shattering with it. We're going to roll those into next year. I would venture to say we'll do north of 50 next year and south of 55, but we won't be less than 50 is my expectation for next year. The leases are all signed, ready to go. We just couldn't get the permits pulled in time with the construction delays. The construction out there is getting tough as well with product availability. We feel good where we're landing, though. Understood. As a quick follow-up to that, in terms of looking ahead to next year, 50-55, what% of those would you expect to be in infill markets versus new markets? My guess is right now, we have the leases that we're working on today for 2022. We're in about 19 states of our 28. I think we might have 1 new state next year that we're looking to go into. Other than that, it'll be continue to backfill in our existing markets. Obviously some of our new markets we'd call Kansas, Missouri, Texas. Those are all still new markets that we're going to work very hard to fill into. I would tell you, probably 60% new markets, 40% backfill. Got it. Thank you. Best wishes. Yeah. Thanks, Jeremy. Thank you. Our next question comes from Anthony Chukumba with Loop Capital Markets. You may proceed with your question. Good afternoon, and thanks for taking my question. Obviously you had a very difficult comparison, that's why your comps were down. Like you said, they were up 15% on a two-year stack basis. You talked a little bit about the 700 basis points headwind from PPE sales last year. I was just wondering if you had any commentary in terms of what were your better performing categories, I guess, on a relative basis, and then just anything you can say about traffic versus ticket. Thank you. Yeah, Anthony, I'll take the performance categorically in terms of the better performing versus the. It obviously was a tough quarter going up against a 43% comp. In terms of our better categories, candy was probably our shining light that was out there. Our seasonal category, very small luggage department that we have, and clothing. Yeah. Bear in mind, I think, last year with this economic stimulus, we had broad strength across all the departments. Even some of the departments that we're looking at for this quarter that are down still perform very well. Yeah, you can't match a 43.3% comp from a year ago. In regards to transactions versus average basket, we don't have traffic counters, so we measure transactions. For our comp of -28%, about 80% of that came from the transaction side, and 20% of that was from a decrease in the average basket. The average basket was really driven by a decrease in the average retail. That's very helpful. Thanks. Good luck with the remainder of the year. Thanks, Anthony. Thank you. Our next question comes from Brian McNamara with Berenberg Capital Markets. You may proceed with your question. Thanks for taking the question. Inventories appear pretty lean across retail. You have kind of record price realization. I was wondering if you could give a bit more color on where exactly your excess supply that you're acquiring is coming from? Brian, I would venture to tell you that our excess supply is coming from all of our vendors. We're not having any issues in any category. It's very broad-based. We deal with over 1,200 vendors. I tell you that I can't pinpoint any specific category that we're not getting product. Our existing relationships plus our new relationships are where we're getting all of our product. Categorically, our merchants are buying to their open-to-buys, and they're full. They're doing a great job getting the products that they need to meet our sales. We're not seeing any shortfall of product out there in the market. There's a lot of closeouts that are flowing in the marketplace, and we're feeling good where we're sitting. Got it. Then I guess as a follow-up to that, another closeout retail executive this morning basically stated that retail in general could see kind of negative comps next year as this year is kind of full of one-time benefits. As supply chain pressures ease, we could see an increase in the flow of merchandise into the country at the same time these comps turn negative. I'm curious if, one, you would generally agree with that assessment, and two, it seems like that would really benefit Ollie's in terms of supply if that played out. Thanks. Yeah, Brian, I would not necessarily agree that next year would be a negative comp for retail. For Ollie's at least, I think that the disruption in the marketplace as it plays out is going to benefit us from a product flow perspective. I think a lot of the pain people may be feeling this year with canceled orders, challenges moving product in, there could be an abundance of closeouts that may roll out next year. I would tell you that this plays into our hand potentially as a benefit, not a detriment, without any doubt in my mind. Great. Thanks a lot. Best of luck. Thanks, Brian. Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to John Swygert for any further remarks. Thank you, operator. Thanks, everyone, for your participation and continued support. We look forward to sharing our third quarter results with you on our next earnings call. Thank you. This concludes today's conference call. Thank you for participating. 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