Market News

Ollie’s Delivers Solid Q1 Earnings; Shares Pop 9%

Ollie’s Bargain Outlet Holdings, Inc. (OLLI) delivered solid first-quarter results driven by the company’s continued ability to create strong alignment between its value-driven merchandise assortment and customer demand. Shares were trading around 9% higher in early trading on Friday.

Ollie’s is involved in the retail of closeouts, excess inventory, and salvage merchandise.

The company reported adjusted earnings of $0.80 per share, up 63.3% year-over-year, and outpaced the Street’s estimates of $0.63 per share.

Net sales grew 29.5% to $452.49 million compared to the prior-year quarter and surpassed analysts’ expectations of $422.07 million.

Comparable store sales were up 18.8% and the company ended the quarter with 397 stores. (See Ollie’s stock analysis on TipRanks)

John Swygert, President, and CEO commented, “Our current quarter-to-date comparable store sales are tracking ahead of our expectations and we are very excited about the momentum in our business…Based on our proven business model, our strong financial position, and the opportunities in front of us, we are bullish on our ability to deliver profitable growth as we expand our store base and execute our long-term growth algorithm into the future.”

Recently, Berenberg Bank analyst Brian McNamara maintained a Hold rating on the stock with a price target of $94, which implies 16.9% upside potential to current levels.

Given the company’s Q1 performance, McNamara said, “Another impressive result with not much to nitpick at here. With Ollie’s Army now representing 78% of sales, the merchandise is clearly resonating with the company’s most loyal customers, and this bodes well for the future. We believe management is setting reasonable expectations, as it will cycle very tough comps starting with a record Q2. A +2% historical comp grower, negative comps for the balance of the year should not be surprising, in our view.”

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 6 Buys versus 3 Holds. The average analyst price target of $103.33 implies 18% upside potential to current levels. Shares have lost 8.4% over the past year.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Ollie’s, with 20.3% of investors increasing their exposure to OLLI stock over the past 30 days.

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