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Factors Likely to Impact Ollie's Bargain (OLLI) Q4 Earnings

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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register a marginal decline in the top line when it reports fourth-quarter fiscal 2021 numbers on Mar 23, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $513.1 million, indicating a decline of 0.5% from the prior-year quarter.

The bottom line of this extreme value retailer of brand name merchandise is anticipated to decline year over year. We note that the Zacks Consensus Estimate for fourth-quarter earnings per share has been stable at 68 cents over the past 30 days. The figure suggests a decline from earnings of 97 cents reported in the year-ago period.

The company has a trailing four-quarter negative earnings surprise of 0.3%, on average. In the last reported quarter, this Harrisburg, PA-based company’s bottom line missed the Zacks Consensus Estimate by 27.7%.

Key Factors to Note

On its last earnings call, management highlighted that Ollie's Bargain’s fourth-quarter comparable store sales comparisons would be challenging due to impressive performance last year as the top line gained from stimulus measures. It projected fourth-quarter comparable store sales to be flat to down 2% compared with fourth-quarter fiscal 2019.

Again, the company anticipates persistent headwinds in gross margin owing to ongoing supply chain challenges, including increased import and trucking costs as well as continued higher labor costs. SG&A expenses have also been increasing for quite some time now. In the last reported quarter, SG&A expenses increased due to higher selling expenses associated with 41 net additional stores and escalating wage rates in select markets.

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 might 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ollie's Bargain has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

3 Stocks With Favorable Combination

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

Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +0.46% and a Zacks Rank #2. FAST is expected to register bottom-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for quarterly earnings of 44 cents a share suggests growth of 18.9% from the year-ago quarter’s reported figure.

Fastenal’s top line is expected to rise from the year-ago quarter’s actuals. The consensus mark for revenues is pegged at $1.67 billion, indicating an improvement of 17.9% from the figure reported in the year-ago period. FAST has a trailing four-quarter earnings surprise of 3.3%, on average.

Boot Barn Holdings (BOOT - Free Report) currently has an Earnings ESP of +0.25% and a Zacks Rank of 3. BOOT is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.30 suggests an increase of 73.3% from the year-ago period’s reported number.

Boot Barn Holdings’ top line is expected to increase from the prior-year quarter’s reading. The Zacks Consensus Estimate for quarterly revenues is pegged at $345.2 million, suggesting an increase of 33.3% from the prior-year quarter’s finals. BOOT has a long-term earnings growth rate of 20%.

Costco (COST - Free Report) currently has an Earnings ESP of +0.35% and a Zacks Rank #2. COST is expected to register bottom-line growth when it reports third-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings of $2.97 per share suggests an improvement of 8% from the year-ago quarter’s reported figure.

Costco’s top line is expected to rise from the year-earlier quarter’s reported figure. The consensus mark for revenues stands at $49.61 billion, indicating an increase of 9.6% from the figure reported in the year-ago quarter. COST has a trailing four-quarter earnings surprise of 13.3%, on average.

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