In a time when even Dollar General (NYSE:DG) can’t keep shoppers interested, can any bargain retailer hope to succeed? Ollie’s Bargain Outlet (NASDAQ:OLLI) could, as evidenced by its recent earnings report and the 3.5% gain in its share price in Thursday afternoon’s trading.
The earnings report Ollie’s brought out for the second quarter offered an enchanting look at its success in bargain retail. It not only pulled out a win in earnings but also in revenue and even managed to top its own figures from 2022’s second quarter by 13.7%. Ollie’s even went so far as to hike earnings, bumping revenue from a range of $2.052 billion – $2.067 billion to $2.076 billion – $2.091 billion. Earnings per share figures got a similar bump, from $2.56-$2.65 to $2.65-$2.74.
One of the biggest reasons Ollie’s delivered such a win was its primary inventory supply strategy. Specifically, it buys closeouts. Lots of closeouts. It goes right to the companies themselves—including the recently-deceased Bed, Bath & Beyond—and buys up all that outstanding inventory for pennies on the dollar. While it’s never exactly clear what will be at an Ollie’s outlet from one day to the next, it’s clear that whatever is there will be rock-bottom priced. And it’s also a safe bet that that element of surprise is also keeping some shoppers coming back.
Turning to Wall Street, Ollie’s Bargain Outlet stock is considered a Moderate Buy by analyst consensus, supported by five Buy ratings, six Holds, and one Sell. However, Ollie’s Bargain Outlet stock comes with 12.31% downside risk thanks to its average price target of $68.09.
