Closeout merchandise retailer Ollie’s Bargain Outlet (NASDAQ:OLLI) has delivered a better-than-expected performance for the third quarter. Revenue increased by 14.8% year-over-year to $480.1 million, exceeding estimates by nearly $10.6 million. Similarly, EPS of $0.51 outpaced expectations by $0.06. Consequently, the company’s shares are trending nearly 6% higher in the early session today.
During the quarter, comparable store sales rose by 7%. Additionally, OLLI increased its total store count by about 9% to 505. The rise in revenue, coupled with a 100 basis-point expansion in operating margin, enabled the company to increase its net income by 37.8% year-over-year to $31.8 million.
As consumers look to shop on a budget in the current business environment, OLLI is benefitting from a strong deal flow. Driven by this strong momentum, the company has raised its financial outlook for Fiscal Year 2023.
Net sales for the year are now expected to be between $2.097 billion and $2.104 billion, compared to the previous range of $2.076 billion to $2.091 billion. EPS for the year is seen landing between $2.77 and $2.83 versus the prior outlook of between $2.65 and $2.74. Furthermore, comparable store sales are seen increasing by 5.3% to 5.6%, a substantial increase over the previously expected range of 4% to 4.5%.
Is OLLI a Good Stock to Buy?
Shares of the company have surged nearly 33% over the past year. Overall, the Street has a Strong Buy consensus rating on Ollie’s Bargain Outlet, and the average OLLI price target of $86 implies a further 12.8% potential upside in the stock.
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