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Ollie's Bargain Outlet (OLLI) Soars 7.5%: Is Further Upside Left in the Stock?

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Ollie's Bargain Outlet (OLLI - Free Report) shares soared 7.5% in the last trading session to close at $86.44. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 13.1% loss over the past four weeks.

Shares of Ollie's Bargain Outlet got a boost from sturdy first-quarter fiscal 2021 results, wherein the top and the bottom line not only improved year on year, but also surpassed the Zacks Consensus Estimate. The company posted adjusted earnings of $0.80 per share, which beat the Zacks Consensus Estimate of $0.66 and surged 64.9% from $0.49 reported in the year-ago quarter. Net sales increased 29.5% year over year to $452.5 million and surpassed the consensus mark of $423.9 million. Results gained from growth in comparable store sales and new store unit. It also benefitted from higher consumer spending stemming from the third-round of federal relief funds for the ongoing COVID-19 pandemic. Moreover, the company’s well-chalked merchandising strategies aided meeting demand conditions aptly.

Management highlighted that comparable store sales in the second-quarter are progressing ahead of expectations. The company is on track with executing long-term growth opportunities and expanding its store base.

Price and Consensus

Price Consensus Chart for OLLI

This retailer is expected to post quarterly earnings of $0.55 per share in its upcoming report, which represents a year-over-year change of -47%. Revenues are expected to be $414.26 million, down 21.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Ollie's Bargain Outlet, the consensus EPS estimate for the quarter has been revised 1.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on OLLI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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