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Ollie's Bargain (OLLI) Emerges as a Solid Pick: Things to Know
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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) , being laser-focused, has been redefining strategies and upgrading capabilities to deliver great value to customers and drive strong results. Quality, price and customer shopping experience have been its key areas of focus.
The company’s business operating model of “buying cheap and selling cheap,” cost-containment efforts, focus on store productivity and the expansion of the customer loyalty program — Ollie's Army — reinforce its position in the industry.
Shares of this Harrisburg, PA-based company have exhibited an impressive run on the bourses in the past six months. In the said period, this Zacks Rank #1 (Strong Buy) stock has increased 26.6% compared with the industry’s growth of 4.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Strategic Endeavors on Track
Ollie's Bargain’s focus on value-driven merchandise assortments positioned it well to capitalize on opportunities in the marketplace and effectively meet consumer demand. Ollie's Army continued to be a major sales driver, with membership increasing continuously. In fiscal 2022, Ollie's Army rose 4.8%, ending the period with 13.2 million members. In fiscal 2022, more than 80% of sales were from Ollie’s Army members.
Image Source: Zacks Investment Research
The company’s results depend on the availability of the brand name and closeout merchandise at compelling prices. Brand name and closeout merchandise represented about 65%, and non-closeout goods and private-label products collectively accounted for roughly 35% of fiscal 2022 merchandise purchases.
Undoubtedly, Ollie's Bargain remains committed to offering better deals, improving operating margins and increasing the store count. The company should benefit from a favorable closeout environment and trade-down activity.
For fiscal 2023, management estimates net sales between $2.036 billion and $2.058 billion, up from the $1.827 billion reported in fiscal 2022. It expects comparable store sales growth of 1% to 2% against the 3% decline witnessed last fiscal.
Store Growth Opportunity
As far as the company’s store growth strategy is concerned, management aims for a store count of at least 1,050 in the long run. Ollie's Bargain increased its store base at a CAGR of 11.5% from 303 stores in fiscal 2018 to 468 stores in fiscal 2022.
We note that the company opened 46 and 40 stores in fiscal 2021 and 2022, respectively. Ollie's Bargain intends to open 45 new stores, less one closure in fiscal 2023.
Taking a cue from the past, we noticed that net sales surged at a CAGR of 10.2% from $1.241 billion in fiscal 2018 to $1.827 billion in fiscal 2022.
Wrapping Up
Ollie's Bargain’s strategic endeavors position the stock firmly for growth. We believe that improved closeout opportunities, increased trade down from consumers and significant room for increasing the store count should support the stock.
3 More Hot Stocks to Consider
Here we have highlighted three other top-ranked stocks, namely Kroger (KR - Free Report) , BJ's Wholesale Club (BJ - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates supermarkets and multi-department stores, currently sports a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 6%.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.6%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
BJ's Wholesale Club, a leading operator of membership warehouse clubs, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 9.3%.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and earnings suggests growth of 7.3% and 0.8% from the year-ago period. BJ has a trailing four-quarter earnings surprise of 19.6%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 6.3% and 7.4% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
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Ollie's Bargain (OLLI) Emerges as a Solid Pick: Things to Know
Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) , being laser-focused, has been redefining strategies and upgrading capabilities to deliver great value to customers and drive strong results. Quality, price and customer shopping experience have been its key areas of focus.
The company’s business operating model of “buying cheap and selling cheap,” cost-containment efforts, focus on store productivity and the expansion of the customer loyalty program — Ollie's Army — reinforce its position in the industry.
Shares of this Harrisburg, PA-based company have exhibited an impressive run on the bourses in the past six months. In the said period, this Zacks Rank #1 (Strong Buy) stock has increased 26.6% compared with the industry’s growth of 4.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Strategic Endeavors on Track
Ollie's Bargain’s focus on value-driven merchandise assortments positioned it well to capitalize on opportunities in the marketplace and effectively meet consumer demand. Ollie's Army continued to be a major sales driver, with membership increasing continuously. In fiscal 2022, Ollie's Army rose 4.8%, ending the period with 13.2 million members. In fiscal 2022, more than 80% of sales were from Ollie’s Army members.
Image Source: Zacks Investment Research
The company’s results depend on the availability of the brand name and closeout merchandise at compelling prices. Brand name and closeout merchandise represented about 65%, and non-closeout goods and private-label products collectively accounted for roughly 35% of fiscal 2022 merchandise purchases.
Undoubtedly, Ollie's Bargain remains committed to offering better deals, improving operating margins and increasing the store count. The company should benefit from a favorable closeout environment and trade-down activity.
For fiscal 2023, management estimates net sales between $2.036 billion and $2.058 billion, up from the $1.827 billion reported in fiscal 2022. It expects comparable store sales growth of 1% to 2% against the 3% decline witnessed last fiscal.
Store Growth Opportunity
As far as the company’s store growth strategy is concerned, management aims for a store count of at least 1,050 in the long run. Ollie's Bargain increased its store base at a CAGR of 11.5% from 303 stores in fiscal 2018 to 468 stores in fiscal 2022.
We note that the company opened 46 and 40 stores in fiscal 2021 and 2022, respectively. Ollie's Bargain intends to open 45 new stores, less one closure in fiscal 2023.
Taking a cue from the past, we noticed that net sales surged at a CAGR of 10.2% from $1.241 billion in fiscal 2018 to $1.827 billion in fiscal 2022.
Wrapping Up
Ollie's Bargain’s strategic endeavors position the stock firmly for growth. We believe that improved closeout opportunities, increased trade down from consumers and significant room for increasing the store count should support the stock.
3 More Hot Stocks to Consider
Here we have highlighted three other top-ranked stocks, namely Kroger (KR - Free Report) , BJ's Wholesale Club (BJ - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates supermarkets and multi-department stores, currently sports a Zacks Rank #2 (Buy). The expected EPS growth rate for three to five years is 6%.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.6%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
BJ's Wholesale Club, a leading operator of membership warehouse clubs, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 9.3%.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current financial-year sales and earnings suggests growth of 7.3% and 0.8% from the year-ago period. BJ has a trailing four-quarter earnings surprise of 19.6%, on average.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial-year sales and earnings suggests growth of 6.3% and 7.4% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.1%, on average.