Mark Butler - Chairman, President, and CEO John Swygert - EVP and CFO Jay Stasz - SVP of Finance and CAO

Matthew Boss - JP Morgan Dan Binder - Jefferies Brad Thomas - KeyBanc Capital Markets David Mann - Johnson Rice Scot Ciccarelli - RBC Capital Markets Peter Keith - Piper Jaffray Stephanie Chang - Credit Suisse Patrick McKeever - MKM

Thank you, and hello everyone. A press release covering the Company’s fourth quarter and full-year fiscal 2016 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 also want to remind everyone that management’s remarks on this call may contain certain forward-looking statements including predictions, expectations, estimates or other information that might be considered forward-looking, and that actual results could differ materially from those mentioned on today’s call. Any such items including our outlook for fiscal-year 2017 and details relating 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 the Company undertakes 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 filings with the SEC.

We encourage you to review these filings, including the Company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q, for a more detailed description of these factors. Please also note that we will be referring to certain non-GAAP financial measures on today’s call such as adjusted operating income, EBITDA, adjusted EBITDA, adjusted net income, and adjusted net income per diluted share that we believe may be important to investors to assess the operating performance of our business.

Reconciliations of these non-GAAP financial measures to the most closely comparable GAAP financial measures are included in our earnings release. I will now turn the call over to Mark.

Thank you Jay and hello to everyone, our fourth quarter and full-year results were very strong across the board and our business continues to perform at a very high level. We were clearly up against a strong financial performance in last year's fourth quarter, but we executed well and achieved a 30% increase in adjusted net income on a 16% increase in sales.

We continued to benefit from very strong deal flow, strong performance from our new stores, and tight expense control. Comparable store sales increased 2% in the quarter versus a two-year stack of 14%.

Our sales strength was broad-based with the majority of our 22 departments comping positive. Some of the best performing categories where electronic accessories, health and beauty aids, clothing, toys, food and candy.

We work very hard every day to strengthen our vendor relationships and we continue to gain better access to great deals allowing our merchants to be more selective in their buys. New stores continued to perform strong and above our expectations.

As we continue to grow our store base and others retailers close stores, we believe we're well positioned to take advantage of additional real estate opportunities in the market. We opened two new stores in the fourth quarter and 31 new stores in the fiscal year ending the year with 234 stores in 19 states including our first seven stores in Florida.

Ollie's Army membership levels continue to grow ahead of sales and army members continued to significantly outspend non-members. The rollout of coupon serialization during the quarter allows us to begin to better understand the behaviors of Ollie's Army members on an individualized basis.

It also gives us the ability to better utilize products specific coupons for individual Ollie's Army members. We recently ran our first two individualized communications to a small group that had previously purchased lawn fertilizer or pool chemical products from us in the past, while we're still in the learning stages and we will be for quite some time, we're excited to begin learning more about some of our best customers.

Looking back over the last 12 months, fiscal 2016 was another tremendous year for us. We delivered topline sales that were record, a comp sales increase of 3.2% against a two-year stack a 10.4% and adjusted net income growth of over 51%.

We exceeded our long-term growth targets, our new stores performed above expectations and our deal flow and vendor relationships were better than ever. Candidly fiscal 2016 was Ollie's greatest year ever.

The most exciting news is all of the growth in the potential that is still in front of us. We're working harder than ever in our successes achieved only through the dedication of are nearly 6,000 team members, it's the combined experience, commitment and discipline of the team that makes Ollie's successful.

I want to sincerely thank everyone in the stores, distribution centers and the store support center for their contributions. Our goal it's always been to sell good stuff cheap and we're doing just that to an ever growing market.

In summary we feel very good about the fundamental trends in our business and our ability to continue delivering against our long-term annual targets of mid teen unit growth, 1% to 2% comparable store sales and approximately 20% net income growth. We are executing our strategy of opening new stores, strengthening our relationship with vendors, gaining better access to merchandise, leveraging our distribution centers, investing back into the business, paying down debt and generating strong returns for our shareholders.

Thank you for supporting Ollie's and I'll now turn the call over to John to take you through our financial results in more detail.

Thanks Mark, and good afternoon everyone. We are pleased to have delivered another solid quarter and ended fiscal 2016 on a very strong note.

In the fourth quarter, net sales increased 16.4% to $283.4 million. Comparable store sales increase 2% against a 5% increase in the fourth quarter of last year and a 14% increase on a two-year stack basis.

The increase in comparable store sales was driven by an increase in the average basket size. We opened two new stores during the quarter, ending with 234 stores in 19 states and increased in-store count of 15.3% year over year.

As Mark indicated our new stores performed above our expectations and we remain pleased with the productivity of our overall store base. Gross profit increased 14.7% to $113.4 million and gross margin decreased 60 basis points to 40%.

The gross margin decrease was the result of a decrease in merchandise margin, partially offset by favorable distribution center and transportation costs. SG&A expenses increased 11.6% to $69.8 million in the quarter.

This increase was primarily related to higher selling expenses from our new stores opened over the past year, increased sales volumes in our remaining store base and investments in personnel to support continued growth of the business. Looking at our expense ratio, we leverage SG&A expenses by approximately 110 basis points to 24.6% of net sales.

Operating income in the quarter increased 21.8% to $40.6 million and operating margin increased 60 basis points to 14.3%. Net income increased 52% to $24.4 million and net income for diluted share increased 50% to $0.39.

Excluding the loss on extinguishment of debt in the last year's fourth quarter, adjusted net income increased 30.2% and adjusted net income per diluted share increased 25.8%. Looking at a couple of non-GAAP metrics, EBITDA increased 21.6% to $43.5 million and adjusted EBITDA increased 21.6% to $45.2 million in the fourth quarter.

For the full fiscal year of 2016, net sales increased 16.8% to $890.3 million, the increase was due to the 15.3% increase in number of stores and further driven by a 3.2% increase in comparable store sales. Net income for the year increased 66.8% to $59.8 million or $0.96 per diluted share and adjusted net income increased 51.2% to $60.8 million and $0.97 per diluted share.

At the end of fiscal 2016, we had $98.7 million in cash and no outstanding borrowings under $100 million revolving credit facility. During the year, we paid down approximately $5 million of our term loan debt and ended the year with total debt of $195.3 million compared to $200.1 million at the end of last year.

Last week we paid down an additional $40 million in the term loan debt. Capital expenditures totaled $16.4 million in fiscal 2016 versus $14.2 million in fiscal 2015.

Turning to our initial outlook for the full-year of fiscal 2017 we expect the following. Total net sales of $1.025 billion to $1.035 billion, comparable store sales growth of 1% to 2%, the opening of 33 to 35 new stores and no planned closures, operating income of $125.1 [ph] million to $124 million, net income of $73 million to $74.5 million and net income per diluted share of $1.12 to $1.15.

Including the impact for the required accounting changes for stock-based compensation, our outlook assumes an effective tax rate of 36.8% and a diluted share count of 64.7 million. Capital expenditures are expected to be $18 million to $20 million.

A few other items that may be helpful when in you modeling. Fiscal 2017 is a 53-week year with the extra week occurring in late January.

We estimate the extra week will add approximately $18 million to sales and less than a half a penny to diluted earnings per share. We expect gross margin to decrease approximately 20 basis points to 40.3% in fiscal 2017 from 40.5% in fiscal 2016.

We expect depreciation and amortization expense to be $12 million to $12.5 million. As I just mentioned, we paid down $40 million in term loan debt last week and therefore expect interest expense to be between $5.5 million to $6 million in fiscal 2017.

In conjunction with the debt pay down, we expect to incur $300,000 pretax loss on extinguishment of debt expense in the first quarter. The first quarter is our most challenging comparison of the year from a comp sales standpoint, with a 14.8% two-year stack.

To-date, sales trends in the quarter have been a bit volatile due to the delay in tax refunds, Winter Storm Stella and the Easter shift. All of this along with the way seasonal business can move with weather during the spring selling season has made for a little more uncertainty in the first quarter.

With this being the case, our comparable store sales estimate for the first quarter is flat to 1%. As Mark said, we feel very good about the underlying trends in the business.

Our deal flow remains strong, our new stores continue to perform above our expectations and our real estate pipeline is full. We remain confident in our ability to deliver against our long-term growth target of mid teen unit growth, 1% to 2% comparable store sales growth and approximate 20% net income growth.

I will now turn the call back over to Mark to provide some closing comments before we open the call for questions.

Thanks John, I just wanted to take a moment to reiterate our thoughts on the fundamentals of the business. Look we can't control the timing of tax refunds, when Easter falls or the weather, but what we can control is the way we execute our business and I've never felt better about things.

Our new stores are opening above expectations, our relationships with vendors are continuing to grow and our selection of deals is expanding and our value to the customer is amazing. So with that said, I'd like to turn the call back over to the operator for some Q&A.

Operator?

Thanks. Congrats on a nice quarter, guys.

So on close-out availability, I mean your model obviously fares clearly well during times of retail disruption. I think you did high single-digit comps in 2008, so I guess my question is, what's the best way to think about lateral brick-and-mortar store closings that clearly we're seeing out there?

And is reverse logistics as online continues to expand and we see more returns, is that a future opportunity? Just kind of your thoughts on the environment.

I think - starting with the last question first, reverse logistics is certainly a possibility for us because obviously America is buying a lot online and they're returning a lot online. That's a very, very challenging business, you've got to be careful.

I have no interest in [indiscernible] in the like defective products that are returned to the stores or to any of the online etailers but reverse logistics could be an opportunity for us. As far as disruption, Matt, we talked about it a lot.

We don't necessarily benefit from a store in particular closing, but what we do benefit is from there being a glut of merchandise being available because a store closed or a chain closed for instance. And I believe we talked about maybe on the last call when a certain sporting goods company went out of business, all of a sudden there were a lot more products available in the sporting goods business, but it takes a little while to get to us.

But every time there's a disruption we have the possibility to be able to benefit and prosper.

Got it. And then just a follow-up, John, on margin, what's baked in for merchandise margin next year underlying the gross margin?

And can you just talk about the driver of the 100 basis points of SG&A leverage this quarter and how we think about that going forward, fixed-cost hurdle, maybe, for next year?

Sure. Matt, with regards to margin for next year, obviously the merch margin and the DC and transportation costs we’re expecting to have about a 20% reduction over our results from 2016.

And as we mentioned previously, our goal is really to be at 40% margin on a full-year basis, so we're actually slightly higher than that currently planned in the 2017 numbers, but with regards to the merch margin versus the overall distribution and transportation margins we're expecting just a slight drop from this year's merch margin probably about 5 bps, maybe 10 bps at the most and the remaining delevering taking place is going to be related to the overall distribution and transportation side of the business with the increased fuel costs and container costs we're experiencing right now.

Got it. And then just on the SG&A?

Matt, this is Jay, just real quick. We've got that margin going from 40.5 to 40.3, so a decrease of 20 basis point.

And Matt, with regards to the SG&A delivering, I believe it's about 50 basis points year-over-year that we're experiencing, most of that has to do with some leverage that we're having from the reduction of overall incentive so far over this year from last year and the performance of the company, we're starting to see some leverage there with the growth of our overall topline sales.

I was just wondering, just following up on that conversation, if you look at the fourth quarter, can you put any more color behind the merchandise-margin decline and the fairly extraordinary SG&A leverage? And then, my follow-up question is regarding inventory.

It looks like you ended the year up about 10%. Just wondering how you're feeling about that number, given better than 10% store growth in comps, how you are feeling about the quality of the buys for Q1?

Dan, go through your questions one more time, I’m sorry.

The first was just a little more color on merchandise margin in the fourth quarter. What was driving it lower and the better-than-average SG&A leverage on a 2% comp?

Sure. Merch margin for Q4 really from our perspective, Dan, was really merchandize mix that we had eluded to in the prior quarter with regards to selling some additional more consumable products I our categories and then obviously making sure the pricing was very sharp and we had the right pricing for our consumers to be a great value as they come to the stores, but we were pleased with our margin at the 40% range that's where we kind of expected to be.

So that was no surprise to us and I think we'd indicated that back in the Q3 call. With regards to the SG&A, what we experienced such great leverage compared to last year was really was all timing related to our incentive-based compensation that we accrued in the quarter and 2016 was a lot lower rate than we had done in 2015.

So it’s really a one-time adjustment per se compared to year-over-year basis and we did have some leveraging take place in the store operation side with the 2% comp that we were able to deliver in Q4.

Dan, as far as how do I feel about the merch, man, I feel really, really good. We got really great name brands at drastically reduced prices, and I’m liking what's in the pipeline, I’m liking what's on the trucks coming in, I’m liking what's on the trucks going to the stores.

So I feel really, really good about where we are, it's very, very strong.

And Dan, this is Jay Stasz, just at year-end, there was just a little bit of timing in the receipts related to some spring product that we received early last year that didn't hit at the end of this year which drove that percentage down year over year.

Hi, thanks, guys, and congratulations again on another strong quarter, another strong year here. Let's see here.

I wanted to ask about real estate availability. It sounds like you guys are in a very good position with your pipeline, what you've got signed.

Following up on that prior topic about inventory availability, I guess, what are you seeing on the real estate side? And are there any opportunities perhaps for costs to even come down, given the accelerated pace of store closures that are going on out there?

Well I'll give you a first part of the answer and I'll let John go into some of the specifics to the extent that he can. But I think two things are happening in the real estate side, we certainly are not struggling at all to get our sites, I think twofold, number one, the price of real estate could come down or candidly, Brad, our location may get a little bit better into the area that we'd be willing to pay.

So instead of being on Second and Main, we might be closer to Main and Main. So I think we're seeing a little bit of both, I know that real estate has done a sensational job last year and they are progressing very, very well, I’ll let John give you what details he can.

Sure Brad, with regards to the real estate pipeline, we're definitely seeing availability of sites. Keep in mind, like Mark and I have mentioned in the past, a lot of these retailers that do go out, it does take some time for those sites to become more available for us at our rent structure that we look at getting.

They don't become available in the first year or two. So it takes a little bit more time for that to occur.

But we are seeing some good availability and with the whitespace we have open to us right now, the site selection is strong. In terms of the rates, like Mark mentioned, we’re pretty much I think in better site selections at the same price, maybe slightly higher than we've had historically, but we believe that's a great model for us to continue to run.

Great. And if I could follow up about just how to model each of the quarters and how you're thinking about the quarters, I appreciate the commentary about comps thus far in 1Q and how you're thinking about the first quarter.

Any other color you would give us, John, on how to think about modeling comps or earnings as we think about this year by quarter?

Brad, as you guys know, we really don't -- we try to stay away from quarterly guidance as we're not really a quarterly comp story or a quarterly story. So I would tell you just to kind of stick with what we've historically delivered on the 1% to 2% comp range knowing that we've guided on a flat to 1% in Q1 and knowing that we believe we'll get back to the 1% to 2% on a full year basis and look at our year-over-year numbers.

So that's kind of where I would guide you to.

Yes. Thank you, and great quarter and year as well.

A question on traffic or transactions, can you just talk a little bit about how you think they will trend in 2017? It seems like you've been driving transaction growth up until this past quarter as a driver of comps.

Yeah. David, I’ll take part one of this and Mark will probably chime in a little bit on it.

But with regards to how do we believe traffic and transactions will play out in 2017, as you know, we are truly a close out, opportunistic buyer of products. So I can't really foresee that far in the full year in terms of how the -- we don't build our model based on traffic and transactions or transactions or basket size, but I can tell you the deal flow is strong.

We are obviously comping the comp for several years now. So we're excited where we ended the year and we believe we can still drive some additional transactions in the box and we can have a positive mix on transactions and basket as we move forward for the year, but I couldn't really give you a whole, a real specific item -- breakdown of the components of what's going to drive transactions or basket to get us to the 1% to 2% comp at this point.

Yeah. I'm not going to be able to add much to that David.

As you know, look, we're going to give you the guidance of the 1% to 2% that’s historically where we've been able to be. Of course, the last couple of years, we've been able to outpace that and as I’ve told you personally, we just don't turn the register off when we hit that.

So as far as the traffic, I can tell you that the better deals that I have in the store, the more traffic I get, the more business I do and I feel really good about where we are.

And then a question on the merchandise-margin item, should we not expect that the mix-related issue or some of the sharper pricing that you took in fourth quarter -- are we not supposed to expect that to continue into 2017? Or how are you looking at planning that?

I think, David, it's kind of baked into our overall 40.3% margin for the year and we believe that we're going to have a pretty normalized merch margin that we're going to be able to deliver on a year-over-year basis and like I said, there is a slight degradation on a full year basis on the merch margin maybe five, maybe ten basis points and the remaining 10 to 15 basis points coming out of DC and transportation cost. But we believe it'll be pretty nominal and be pretty comparable to what we delivered in 2016.

And then one last question, in terms of the openings when you're thinking about what you've got in the pipeline for 2017, just the breakout between new or existing markets and your ability to backfill.

David, most of our growth is going to be coming out of the new markets. We’d probably say 75% to 80% of the new stores are coming out of what we consider to be our new markets, which would be the Florida, Georgia, Alabama, South Carolina markets, most of the growth will be coming out of those markets, but we will be continuing to backfill on our existing markets, but like we’ve said historically, 75% to 80% will be in new markets as we grow them.

Hey, guys. Scot Ciccarelli.

Mark, when you guys look at the new store sales productivity, can you tell us how it kind of changes as we're dealing with new markets versus fill-in, just to get a better idea, given the cadence of the amount of fill-in that you are going to be doing?

Scot, this is John. I'll take part of that question.

With regards to the overall differences we see in a new market versus a fill-in market, mainly due to the fact that we don't do a lot of concentration in existing markets and do a lot of cannibalization, they all react pretty comparable in terms of the overall schematic that you'd see on the new store sales performance. They’re opening up above maturity or at maturity and then ramping down in their first full year.

They kind of follow the same pattern. We don't look at them as two different models per se.

So we don't view a big difference there.

Yeah. And I think Scot I'm sure somebody is going to ask me about Florida and I was really pumped up about Florida about going there and we haven't even been there a year and we already have seven stores down there and I got to tell you it has not disappointed, but neither have the other new stores that we have opened in other states.

All of our stores are doing very, very well and are opening up at or above expectations. So we just really feel good about our new store productivity.

Okay. Thank you for that.

And then, I guess the follow-up is you talked about a little bit higher on the consumable mix this quarter. Was that originally planned or kind of worked out based on what the buys were?

And does your mix differ from -- how much, I guess, does your mix differ from market to market?

Scot, with regards to the overall shift in consumables, I think we kind of had indicated the shift in the higher consumables in Q2 and Q3 as part of our thought processes with -- thought process with the increase in the HBA products specifically with the major manufacturer. We’re kind of seeing that coming and we kind of get up on the heads up on that piece of it as we’re moving forward.

So that wasn't really a big surprise to us. It's hard to get all, the take mix is not always that simple to get right, but we were directionally I think in the right area.

So in terms of how our product assortment changes region to region, it's pretty comparable throughout our entire chain. I would say high-90 percentile, every store has the same exact product.

We do have variations though state by state. Down in Florida, we don't have the same type of lawn fertilizer that we have up here in Pennsylvania.

So there are some small nuances, but materially speaking, the product you see in Pennsylvania will be very, very similar to what you see in Florida.

Hi. Thanks.

Good afternoon. So, just going back to the new stores, you guys had commented multiple times that the new stores are performing above expectations.

Mark, could you just give us some color what do you think might be driving that? Is that more from a sales perspective or just an overall return perspective?

Well, obviously, they’re both tied and John can give you a little bit more detail to the extent that he can, but I think that it's also a derivative of the overall product offering that we have in our stores. It's much stronger, is brighter, broader, better and we're offering major name brands at drastically reduced prices and it's appealing to the people in the new markets as our existing stores, as our comp stores are performing above what we expected as you guys well know.

So I think the entire, what we talk about all the time is the take mix. I think everything, we're hitting every one of our marks as we're going around the track, we're operating at a very, very high level and that's coming through bright and loud in our new store performance as well as the existing stores.

Yeah. Peter, this is John.

Obviously with the new stores, as we mentioned, and we've mentioned it in the past with regards to the stores performing at or above our expectations, we now definitely are clearly above our expectations. We made some slight changes to our expectations in the overall sales side of the business, and increased the overall first year sales for the new stores from $3.7 million to $3.8 million.

Right now, we're not changing the implied return on the investment or the net assets or the profit, but we believe that to be a pretty modest change in the model and which would give us some increase, but nothing materially speaking from our perspective today.

Okay. Thanks, John.

And then, John, maybe one follow-up question to you. How much visibility do you have on that freight and distribution expense as it flows through the year?

And just thinking out loud that if it's a 5 to 10 basis point drag, you guys are lapping some pretty significant gains from last year, so I thought it might be a little bit more of a drag. Do you feel pretty confident about that guide at this point?

Right now Peter, visibility wise, I have more visibility on container costs than I do on fuel prices obviously, but we do believe that we have some additional leverage in the four walls of the distribution centers to get out of there. So there's a little bit more drag on the fuel and container cost, as we're looking at the fuel container costs in the DC all as one, but we believe we're pretty -- we should be pretty close on the 10 to 15 basis point drag on the margin related to those items.

Hi, guys. This is actually Stephanie Chang on for Ed.

Thanks for taking my question. Were there any updates on the coupon serialization program now that you've completed the rollout, any learnings you could share with us and any benefits?

Just curious if there are any baked into guidance for this year.

Yeah. Nothing that’s going to really excite you.

Actually, we did one a few weeks ago. Weather wasn't on our side, but I don't measure it for the amount of people that come in.

This is more consistent with how we deal with Ollie’s army on a tip basis, by letting people know. I sent out the lawn fertilizer e-mail a couple of weeks ago and then I think we got hit with Stella.

So that's not a fair evaluation, but I think this -- we're really excited about it. We're still learning, don't have any real details for you and the pool chemicals.

I think we're sending that out this week or did go out this week and at least in Central Pennsylvania, I think it's 40 degrees today. But that's not why we do it to get them to instantly come in and buy.

It's more to make sure that they are aware that we have the product that we are positive that they bought from us last year. So we're still learning, but we're very excited about it.

Got it. Thanks.

And then as my follow-up, can you provide some color on whether you are seeing any labor cost pressure, given the rising minimum wage levels we've seen at some states? And can you remind us what the typical staffing levels are for your average store?

Sure, Stephanie. This is John.

We currently are seeing -- obviously when the minimum wages change in certain states, we see the impact there. Typically, we’re not necessary a minimum wage payer.

So it’s not a one for one impact to our overall bottom line with the changes in the minimum wage. And thank God, we're not just one or two states.

We're spread with 19 states now. We take that and we're able to manage through and maneuver where we don't have a big impact on our overall wage line at store level.

We're not a high touch type of model, so we don't have a ton of people in our stores that would be impacted as much as other retailers might be. With regards to our overall staffing model in the stores, we have probably anywhere from 15 to 25 associates in a store on average.

And in the stores we have two or three management members within a box. So not a whole lot of labor that sits in the store when you look at it on a one-off basis.

Okay. Thanks.

Hi, guys. Question on the Army and the growth that you're seeing, you mentioned it was strong.

Do you continue to see growth in that 30% plus area? I think you said perhaps back in January down in Florida that there were about 6 million members.

Just wondering where those numbers stand. And then on the spend, is that metric the same as it has been, the 40% more, I think, than -- or something like that.

Yes, 40% more than the non-Army members, just --

Patrick, this is Jay Stasz and I can answer that. The short answer is yeah, but on an apples to apples basis, we had over 7.3 million Ollie’s Army members versus 5.6 million at the end of Q4 last year.

So that’s up 30%. The membership levels continue to grow ahead of sales pace and the average members are spending about 40% more in the non-Ollie’s Army members.

So that is good and the sales of the program make up approximately 65% of the company sales. So, yeah, all the metrics there remain strong.

Okay, okay. And then, just a broad question on the border adjusted tax, if it were to go through.

What are your thoughts there? I guess one would think that you would be a lot better insulated from something like that than most traditional retailers -- or than traditional retailers, but just wondering how you are thinking about it.

Sure, Patrick. I’ll try to answer that.

With regards to the border adjusted tax, obviously, it's right now pretty uncertain where things are going to go and how it's going to all play out, but if it were to play out as currently contemplated, we do believe we'd be less impacted than a lot of other retailers in the marketplace, but anytime there's disruption in the market, we typically are able to take advantage of it and make an opportunity out of it. We, as an organization, directly would have very little issues with the border adjusted tax impacting us on a negative basis, but I think when you look at the entire way product would move into the United States, you would have an overall inflationary pressure on the cost of product from all retailers and we would follow suit and just continue to hope to maintain the same value proposition that we do today when you compare our prices against other retailers in the market.

Yeah. Patrick, I’d just add and I think we might have spoke about this in Orlando, but we're not the market maker.

We're not the ones who determine the price, but we do react to the market. So if the fancy stores had hypothetically something that instead of they were selling it for $1.49, all of a sudden, they had to sell it for $1.79, hopefully, we're going to still be at that 25%, 35%, 40%, 50%, 60% off of their price.

So we are absolutely reacting, we're not making the market.

Hi, it's Dan Binder, just a follow-up -- a couple of follow-ups. You mentioned the strong growth of Ollie's Army.

I was just curious. Is that better-than-average growth or above sales rate growth coming from stronger sign-ups in the new stores or stronger sign-ups in the comp stores?

Dan, this is John. It's a little bit of both.

Obviously, if you get the 30% kind of compounded annual growth that we've been experienced over the last five, six, seven years, it's come from both the existing stores and the new stores in order to generate that.

Okay. And you mentioned most of the categories were positive.

I was just curious if there were any notable weak categories, any explanations behind them if there were.

Yes. I will give you probably, not probably, definitely our two underperformers were books and housewares.

Books was a trend related item that you may recall and we were up against that and that was a little bit of a needle mover and housewares was deal related. But overall, very broad based, feel really, really good and we performed very, very well.

Okay. And then one last one for you, in your comments you said that basket drove most of the comp.

I was just curious, are you seeing that through more units per transaction or just higher AUR?

Yeah. Actually -- Dan, we saw that in the form of more units per transaction.

Okay. Thank you very much and thank you everyone for listening to our fourth quarter and fiscal 2016 earnings call.

We believe that we're well positioned to head into 2017. We look forward to speaking with you again in our first quarter call in late May.

Thank you very much and have a great day.