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Here's Why Ollie's Bargain (OLLI) Is Ahead of the Curve
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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) has defied market challenges, showcasing its resilience and growth potential. The company, based in Harrisburg, PA, has seen its stock rallying 47.3% year to date against the industry’s decline of 7.1%.
We note that the company’s business model of “buying cheap and selling cheap”, combined with cost-containment measures and a focus on store productivity, solidifies its position in the industry. The expansion of its customer loyalty program, Ollie's Army, further enhances its competitive edge.
Furthermore, analysts have revised their earnings per share estimates for the current and next financial year. As a result, over the past 60 days, the Zacks Consensus Estimate for the current fiscal has increased by 1.6% to $2.61, while the estimate for the next fiscal has risen by 1.7% to $2.95. These figures reflect year-over-year growth expectations of 61.1% and 12.8%, respectively, showcasing the company's potential and solid outlook.
Image Source: Zacks Investment Research
Capturing Market Opportunities
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. The continued success of Ollie's Army has played a vital role in driving sales. With a consistently growing membership, Ollie's Bargain ended the first quarter with more than 13.3 million active Ollie's Army members, which accounted for slightly more than 80% of sales.
The company's performance has been bolstered by the favorable response to its deals and product offerings, which resonate with a wide customer base. Ollie's Bargain's ability to offer appealing and diverse products has been a key driver of its success. Additionally, the company's strong vendor relationships have played a crucial role in further cementing its position in the market.
Markedly, 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.
Expansion Strategy
Ollie's Bargain is focused on expanding its store footprint as part of its growth strategy. The company aims to achieve a long-term goal of operating more than 1,050 stores, with a target of opening 50 to 55 stores annually. Ollie's Bargain has demonstrated strong growth in its store base, with a CAGR of 11.5% from 303 stores in fiscal 2018 to 468 stores in fiscal 2022.
Over the past years, Ollie's Bargain successfully opened 46 and 40 stores in fiscal 2021 and 2022, respectively. For the fiscal year 2023, the company plans to open 45 new stores while closing one location. In addition to new store openings, Ollie's Bargain is committed to remodeling existing stores, with plans to remodel 30 to 40 stores. The company continues to invest in its distribution network to ensure efficient operations.
Looking back at the company's track record, 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.
Conclusion
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 this Zacks Rank #2 (Buy) stock.
Management envisions fiscal 2023 net sales between $2.052 billion and $2.067 billion, suggesting an increase from $1.827 billion reported in fiscal 2022. Ollie’s Bargain anticipates comparable store sales to rise in the band of 2-2.8% against the comparable store sales decline of 3% reported last fiscal year. The company foresees fiscal 2023 adjusted earnings in the range of $2.56-$2.65 per share, up from the adjusted earnings of $1.62 reported last fiscal.
3 More Stocks Looking Hot
Here we have highlighted other top-ranked stocks, namely Lamb Weston Holdings (LW - Free Report) , Celsius Holdings (CELH - Free Report) and Walmart (WMT - Free Report) .
Lamb Weston, a leading supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers worldwide, currently carries a Zacks Rank #2. LW has a trailing four-quarter earnings surprise of 47.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 29.6% and 117.3%, respectively, from the year-ago reported numbers. The expected EPS growth rate for three to five years is 42.7%.
Celsius Holdings, which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.8% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 69.6% and 154.4%, respectively, from the year-ago reported numbers.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 5.5%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales suggests growth of 4.2% from the year-ago period. WMT has a trailing four-quarter earnings surprise of 12%, on average.
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Here's Why Ollie's Bargain (OLLI) Is Ahead of the Curve
Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) has defied market challenges, showcasing its resilience and growth potential. The company, based in Harrisburg, PA, has seen its stock rallying 47.3% year to date against the industry’s decline of 7.1%.
We note that the company’s business model of “buying cheap and selling cheap”, combined with cost-containment measures and a focus on store productivity, solidifies its position in the industry. The expansion of its customer loyalty program, Ollie's Army, further enhances its competitive edge.
Furthermore, analysts have revised their earnings per share estimates for the current and next financial year. As a result, over the past 60 days, the Zacks Consensus Estimate for the current fiscal has increased by 1.6% to $2.61, while the estimate for the next fiscal has risen by 1.7% to $2.95. These figures reflect year-over-year growth expectations of 61.1% and 12.8%, respectively, showcasing the company's potential and solid outlook.
Image Source: Zacks Investment Research
Capturing Market Opportunities
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. The continued success of Ollie's Army has played a vital role in driving sales. With a consistently growing membership, Ollie's Bargain ended the first quarter with more than 13.3 million active Ollie's Army members, which accounted for slightly more than 80% of sales.
The company's performance has been bolstered by the favorable response to its deals and product offerings, which resonate with a wide customer base. Ollie's Bargain's ability to offer appealing and diverse products has been a key driver of its success. Additionally, the company's strong vendor relationships have played a crucial role in further cementing its position in the market.
Markedly, 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.
Expansion Strategy
Ollie's Bargain is focused on expanding its store footprint as part of its growth strategy. The company aims to achieve a long-term goal of operating more than 1,050 stores, with a target of opening 50 to 55 stores annually. Ollie's Bargain has demonstrated strong growth in its store base, with a CAGR of 11.5% from 303 stores in fiscal 2018 to 468 stores in fiscal 2022.
Over the past years, Ollie's Bargain successfully opened 46 and 40 stores in fiscal 2021 and 2022, respectively. For the fiscal year 2023, the company plans to open 45 new stores while closing one location. In addition to new store openings, Ollie's Bargain is committed to remodeling existing stores, with plans to remodel 30 to 40 stores. The company continues to invest in its distribution network to ensure efficient operations.
Looking back at the company's track record, 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.
Conclusion
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 this Zacks Rank #2 (Buy) stock.
Management envisions fiscal 2023 net sales between $2.052 billion and $2.067 billion, suggesting an increase from $1.827 billion reported in fiscal 2022. Ollie’s Bargain anticipates comparable store sales to rise in the band of 2-2.8% against the comparable store sales decline of 3% reported last fiscal year. The company foresees fiscal 2023 adjusted earnings in the range of $2.56-$2.65 per share, up from the adjusted earnings of $1.62 reported last fiscal.
3 More Stocks Looking Hot
Here we have highlighted other top-ranked stocks, namely Lamb Weston Holdings (LW - Free Report) , Celsius Holdings (CELH - Free Report) and Walmart (WMT - Free Report) .
Lamb Weston, a leading supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers worldwide, currently carries a Zacks Rank #2. LW has a trailing four-quarter earnings surprise of 47.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggests growth of 29.6% and 117.3%, respectively, from the year-ago reported numbers. The expected EPS growth rate for three to five years is 42.7%.
Celsius Holdings, which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.8% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 69.6% and 154.4%, respectively, from the year-ago reported numbers.
Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 5.5%.
The Zacks Consensus Estimate for Walmart’s current financial-year sales suggests growth of 4.2% from the year-ago period. WMT has a trailing four-quarter earnings surprise of 12%, on average.