The Harrisburg, Penn.-based company, which competes with giants such as Dollar General (DG) and Walmart (WMT), posted adjusted earnings of 31 cents per share on revenue of $243.4 million, beating the analyst consensus of 28 cents per share on sales of $236.1 million for the three months ending Jan. 30. Average per stores sales also rose 5% for the quarter.

Many U.S. retailers struggled in the tail end of 2015 due to the unseasonably warm weather, which undercut demand for winter products, while others found profit margins by moving sales online. Ollie however has no e-commerce platform and showed a spectacular gross margin of 40.6%.

It’s sales growth can be attributed to Ollie’s brick-and-mortar stores along with its cheap, through at times name-brand, products. CEO Mark Butler says that leads to more sales per customer.

“You come in for one thing and you buy another,” he said during Ollie’s earnings call Wednesday.

Butler also noted that the margin was boosted by better relationships and deals with vendors and lower transportation costs.

Following the news, investment banking firm Piper Jaffray raised their rating on the stock from neutral to overweight—Wall Street’s moderated version of “buy.” Roughly 87% of analysts covering the stock now have a buy rating on the $1.5 billion market cap company.

“We can no longer sit on the sidelines for the following reasons: closeout deal flow continues to get better as OLLI’s IPO has made the company a more appealing closeout partner with suppliers; for the first time in company history, it now has a traffic driver in coffee, K-Cups,” a team of ananlysts led by Peter Keith wrote.

Ollie’s, founded in 1982, went public last summer at $16 a share, and raised $153 million at the IPO—about $21 apiece. The chain now has 203 stores in 17 states.

For the 2017 fiscal year, Ollie’s plans to add another 28 to 32 stores, and projects 2017 fiscal year revenue to clock in at $865 million to $875 million.

The stock is up 21% since its July IPO, and 48% year to date.