For the quarter, OLLI reported Adjusted EPS of $0.39, topping analysts' expectations by $0.03. Remarkably, the company has beaten the EPS number by $0.03 in six of the past seven quarters. On a growth basis, Adjusted EPS was up a healthy 25.8% year/year. This is despite the fact that gross margin dipped by 60 basis points due to lower merchandise margin, which was partially offset by a decrease in transportation and distribution costs.
A couple items drove the bottom line growth. First, total net sales were up 16.4% to $283.4 million, edging the $281.0 million Capital IQ Consensus. Comparable store sales climbed by 2.0%, which might seem disappointing on the surface. However, OLLI was facing a fairly difficult year/year comparison as last year it saw a +5.0% comp increase. On a two-year stack basis, its comps are up 14.0%. Also, relative to many other brick-and-mortar retailers, the positive comp looks pretty good. There's no shortage of retailers that are putting up comps of less than 1% or worse in this challenging environment. Along with the bump in comparable sales, OLLI opened two new stores during the quarter (ending the quarter with 234) with management commenting that new stores performed above expectations.
Also boosting the bottom line is that SG&A costs, as a percentage of revenue, declined to 24.6% from 25.7% in the year ago period. With a good handle on expenses, and with the steady top line growth, OLLI was once again able to drive double-digit earnings growth.
In its earnings press release, it also issued FY18 EPS, revenue, and comparable store sales growth guidance. Specifically, it provided upside EPS guidance of $1.12-$1.15 vs. the $1.09 consensus, inline revenue guidance of $1.025-$1.035 billion, and comparable store sales growth of 1-2%. During its earnings conference call, OLLI highlighted a couple catalysts it sees on the horizon. For instance, it is expecting to open 33-35 new stores in FY18 as it believes it is well positioned to take advantage of additional real estate opportunities. Furthermore, membership levels continue to grow ahead of sales and members are continuing to out-spend non-members. As an increasing number of customers become members (known as "Ollie's Army"), that should translate to solid comparable sales performance. And, lastly, it just paid down $40 million of long term debt, reducing its interest expect compared to FY17.