Ollie’s Bargain Outlet Holdings, Inc. OLLI has caught the attention of investors, with its stock climbing 8.4% in the past month, fueled by robust financial results and strategic growth initiatives. While this performance has been impressive, it raises a critical question: Is there still room for further upside, or has OLLI reached its peak?
With the company’s solid fundamentals, aggressive expansion plans and increasing consumer loyalty, OLLI appears well-positioned to maintain its upward trajectory. The stock has outpaced the industry, which showcased a decline of 3.5% in the past month.
OLLI Stock Past Month Performance
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Ollie’s Bargain stock closed at $106.17 yesterday, positioning it 11.5% below its 52-week high of $120.03 reached on Dec. 20, 2024. Despite this dip, the stock is trading above its 50-day and 200-day moving averages, signaling a bullish trend. As investors evaluate whether this momentum can continue, it is worth examining OLLI’s future prospects to determine the best course of action for your portfolio.
OLLI Trades Above 50 & 200-Day Moving Averages
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Ollie's Army & Store Expansion: Key to Growth
With a strong financial performance and strategic growth initiatives, Ollie’s Bargain is well-positioned to deliver long-term shareholder value. In the third quarter of fiscal 2024, OLLI registered a 7.8% increase in net sales to $517.43 million and a 13.7% rise in adjusted earnings per share to 58 cents. The company also achieved a 100-basis point improvement in the gross margin to 41.4%, driven by reduced supply-chain costs.
A key driver of OLLI’s growth is its store expansion strategy. In the third quarter, the company opened 24 new stores, a record number, bringing its total count to 546 stores across 31 states. The acquisition of Big Lots locations and multiple “99 Cents Only” stores has strengthened its portfolio, ensuring a presence in high-traffic areas. With plans to open at least 56 new stores in fiscal 2025, OLLI is on track to achieve its 10% annual unit growth target.
The company has also leveraged its customer loyalty program, Ollie's Army, to bolster its market position further. The company ended the third quarter with 14.8 million active Ollie's Army members, accounting for more than 80% of sales. This program, coupled with targeted digital marketing efforts, has helped the company attract a younger demographic, with the 18-45 age group being the fastest-growing segment.
Ollie’s robust supply-chain infrastructure is another significant advantage. The newly operational distribution center in Princeton, IL, which supports more than 150 stores, has enhanced the company’s ability to manage its expanding footprint. The company now can serve up to 750 stores. Investments in technology and productivity underscore OLLI’s focus on operational excellence.
As the largest buyer of closeout and excess inventory, OLLI benefits from its scale, enabling it to secure favorable deals with suppliers. Its ability to offer high-quality branded products at prices 20-70% lower than traditional retailers provides a competitive advantage. The company’s financial stability, with $304 million in cash and short-term investments and no outstanding debt, ensures flexibility to capitalize on future opportunities.
What to Expect From OLLI?
Management envisions fiscal 2024 net sales between $2,270 million and $2,280 million, which suggests an increase from $2,102.7 million reported in fiscal 2023. Ollie’s Bargain anticipates comparable store sales to rise in the band of 2.7-3%. The company anticipates fiscal 2024 adjusted earnings in the range of $3.22-$3.30 per share, up from the adjusted earnings of $2.91 reported last fiscal.
Here’s How Estimates Stack Up for Ollie's Bargain
Reflecting the positive sentiment around Ollie's Bargain, the Zacks Consensus Estimate for earnings per share has seen upward revisions. Over the past 30 days, analysts have increased their estimates for the current fiscal year by two cents to $3.29 per share and for the next fiscal year by five cents to $3.72 per share. The current and next year's estimates indicate year-over-year growth rates of 13.1% and 14.5%, respectively.
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Should You Stay Bullish on OLLI?
Ollie’s Bargain is positioned for continued success with a robust business model, aggressive growth plans and a favorable operational environment. With strategic store expansions, enhanced supply-chain capabilities and strong vendor relationships, the company is well-poised to capture market share and deliver sustained shareholder value. For investors seeking a resilient, growth-oriented stock, now is the opportune time to buy into Ollie’s Bargain and capitalize on this Zacks Rank #2 (Buy) company.
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