Ollie's Enters the Market With a Bang

The underwriters for the offering are JPMorgan, Jefferies, Merrill Lynch, Credit Suisse, Piper Jaffray, KeyBanc Capital Markets and RBC.

The company calls itself a “highly differentiated and fast-growing, extreme value retailer of brand name merchandise at drastically reduced prices.” It offers customers a broad selection of products, including housewares, food, books and stationery, bed and bath, floor coverings, toys and hardware.

The chairman, president and chief executive, Mark Butler, co-founded Ollie’s in 1982, based on the idea that “everyone in America loves a bargain.” From the time Butler assumed his current position as president and CEO in 2003, Ollie’s has grown from operating 28 stores in three states to 187 stores in 16 states at the end of June 2015.

Ollie’s expects to open between 25 and 30 new stores in fiscal 2015, and it believes that there is an opportunity for more than 950 Ollie’s locations across the United States, based on internal estimates and third party research conducted by Jeff Green Partners.

Here are a few highlights regarding the growth and financial performance of Ollie’s from fiscal 2010 to fiscal 2014:

• The store base expanded to 176 stores from 95, a compound annual growth rate (CAGR) of 16.3% and it entered eight new states.
• New stores opened from fiscal 2010 to fiscal 2013 produced average cash-on-cash returns of 61% in their first 12 months of operations.
• Comparable store sales grew at an average rate of 1.7% per year.
• Net sales increased to $638.0 million from $335.7 million, a CAGR of 17.0%.

Shares of Ollie’s were up 32% at $21.12 Thursday afternoon. The range on the day thus far was $20.75 to $22.99, with 10 million shares traded. At the highest point on the day, shares were up nearly 44%.