Ollie's building distribution center in Texas
Ollie's Army is marching into Texas.
After hinting last year that a new distribution center might be needed to support growth of its store network, Ollie's Bargain Outlet Holdings Inc. made it official on Tuesday.
As part of its third-quarter earnings report, the Lower Paxton Township-based discount retailer said it has purchased a 58-acre parcel of land in Lancaster, Texas, to build its third distribution center.
Ollie's recently opened its 303rd store. Its long-term goal has been at least 950 stores.
Mark Butler, the company's president and CEO, told the Business Journal last year that a new distribution center would probably be in the company's future. The existing stores in the chain are being supported by distribution centers in York County and Commerce, Georgia.
"We would likely march across the South and a distribution center would probably have to be in our future," he said last year. "There have been very brief conversations and planning because it would probably be 2019 or 2020 for another distribution center."
That plan is now in action. The company said it acquired the land in Texas on Nov. 29. The plan is to build a 615,000-square-foot facility that, when completed, can service 150 to 200 stores, according to the earnings report.
Construction has begun. Butler said in an earnings call Tuesday that the center is expected to be operational during the first quarter of fiscal 2020.
"We're eager to serve even more customers with our proven profitable store model as we continue our expansion," he said in the earnings call. "I feel great about the future white-space opportunity as we continue on our path to 950 or more stores nationwide."
Ollie's has not disclosed the cost of the land deal or construction. Officials were not immediately available for additional comment.
In the company's third quarter, which ended Nov. 3, Ollie's posted net income of $24.8 million, up from $18.9 million for the same period last year. Net income per diluted share increased to 38 cents from 29 cents last year.
Total sales jumped to $283.6 million, up 19 percent from $238.1 million last year.