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Ollie's Bargain's (OLLI) Q2 Earnings in Focus: Factors to Note

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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register a decrease in the top line when it reports second-quarter fiscal 2021 numbers on Aug 26, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $436.7 million, indicating a decline of 17.5% from the prior-year quarter.

The bottom line of this extreme value retailer of brand name merchandise is expected to decline year over year. We note that the Zacks Consensus Estimate for second-quarter earnings per share has been stable at 57 cents over the past 30 days. The figure suggests decline from earnings of $1.04 per share reported in the year-ago period.

The company has a trailing four-quarter earnings surprise of 16.7%, on average. In the last reported quarter, this Harrisburg, PA-based company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 21.2%.

Key Factors to Note

Ollie's Bargain second-quarter performance is likely to have witnessed tough year-over-year comparisons in sales, as COVID-19 benefits are lapped. Again, ongoing supply chain pressure, higher transportation expenses and labor costs might have impacted the margins. The company has been witnessing deleverage in SG&A expense for quite some time now due to increase in number of stores and variable selling expense.

Nonetheless, the company’s operating model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program — Ollie's Army should have provided some cushion. It has been making an effort to create an alignment between value driven merchandise and customer demand.

What the Zacks Model Unveils

Our proven model does not conclusively predict 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 odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Ollie's Bargain carries a Zacks Rank #3, it has an Earnings ESP of 0.00%.

3 Stocks With Favorable Combination

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

Abercrombie (ANF - Free Report) presently has an Earnings ESP of +4.93% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +8.07% and Zacks Rank #2.

Costco (COST - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #3.

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