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Factors Likely to Influence Ollie's Bargain (OLLI) Q3 Earnings

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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register an increase in the top line when it reports third-quarter fiscal 2020 numbers on Dec 3, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $407.8 million, indicating an improvement of 24.7% from the prior-year quarter.

Further, the bottom line of this retailer of brand name merchandise is expected to improve year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable at 58 cents over the past 30 days. The figure suggests sharp growth from 41 cents in the year-ago period.

Notably, the company has a trailing four-quarter earnings surprise of 15.5%, on average. In the last reported quarter, this Harrisburg, PA-based company’s bottom line surpassed the Zacks Consensus Estimate by a significant margin of 19.5%.

Key Factors to Note

Ollie's Bargain business operating model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program — Ollie's Army are likely to have contributed to the third-quarter performance. We believe that the company’s endeavors might have aided it in capitalizing on growing consumer demand for essentials and other daily purchases amid the ongoing pandemic.

However, comparable store sales growth rate for the third quarter is likely to have decelerated when compared with the sturdy second-quarter performance, due to gradual waning of stimulus impact and the reopening of other retail stores. On its last earnings call, management highlighted high teens growth in comparable store sales in the third quarter through Aug 27. The Zacks Consensus Estimate for comparable store sales for the to-be-reported quarter is currently pegged at 12.7%.

Apart from aforementioned factors, we cannot ignore concerns related to deleverage in supply-chain cost, promotional pressure and higher expenses associated with operating through the ongoing pandemic.

What Does the Zacks Model Unveil?

Our proven model predicts an earnings beat for Ollie's Bargain this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ollie's Bargain has a Zacks Rank #3 and an Earnings ESP of +0.58%.

3 More Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Kroger (KR - Free Report) presently has an Earnings ESP of +0.38% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

RH (RH - Free Report) presently has an Earnings ESP of +0.94% and a Zacks Rank #3.

Casey's General Stores (CASY - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #3 at present.

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