We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Ollie's Bargain (OLLI) Earnings Continue to Rise in Q3?
Read MoreHide Full Article
Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register improvement in the top line when it reports third-quarter fiscal 2019 numbers. The Zacks Consensus Estimate for revenues is pegged at $322.8 million, indicating an improvement of 13.8% from the prior-year quarter’s reported figure.
Further, the bottom line is expected to rise year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable over the past 30 days at 39 cents. The figure suggests growth of 21.9% from the year-ago quarter’s reported figure.
Notably, the company’s bottom line has outperformed the Zacks Consensus Estimate in three of the trailing four quarters. In the last reported quarter, this Pennsylvania-based value retailer witnessed negative earnings surprise of 23.9%.
Key Factors to Note
Ollie's Bargain’s business model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program, Ollie's Army, have been favorably impacting the company’s top and bottom line performance.
The company’s results are dependent on the availability of brand name and closeout merchandise at compelling prices, as the same represents roughly 70% of goods purchased. Moreover, the company sells merchandise at prices up to 70% lower than the department and fancy stores, and up to 20-50% lower than mass-market retailers.
Analysts pointed that stiff competition, rise in supply chain costs and any deleverage in SG&A expenses remain concerns. The company had earlier guided gross margin contraction of 20-30 basis points for the third quarter. Further, SG&A expenses have been increasing for quite some time now. In the last reported quarter, it increased 19.7% on account of higher selling expenses driven by new store growth.
What the Model Predicts
Our proven model doesn’t 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.
Ollie's Bargain has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Dollar General (DG - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #2.
Big Lots has an Earnings ESP of +3.85% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Will Ollie's Bargain (OLLI) Earnings Continue to Rise in Q3?
Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register improvement in the top line when it reports third-quarter fiscal 2019 numbers. The Zacks Consensus Estimate for revenues is pegged at $322.8 million, indicating an improvement of 13.8% from the prior-year quarter’s reported figure.
Further, the bottom line is expected to rise year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable over the past 30 days at 39 cents. The figure suggests growth of 21.9% from the year-ago quarter’s reported figure.
Notably, the company’s bottom line has outperformed the Zacks Consensus Estimate in three of the trailing four quarters. In the last reported quarter, this Pennsylvania-based value retailer witnessed negative earnings surprise of 23.9%.
Key Factors to Note
Ollie's Bargain’s business model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program, Ollie's Army, have been favorably impacting the company’s top and bottom line performance.
The company’s results are dependent on the availability of brand name and closeout merchandise at compelling prices, as the same represents roughly 70% of goods purchased. Moreover, the company sells merchandise at prices up to 70% lower than the department and fancy stores, and up to 20-50% lower than mass-market retailers.
Analysts pointed that stiff competition, rise in supply chain costs and any deleverage in SG&A expenses remain concerns. The company had earlier guided gross margin contraction of 20-30 basis points for the third quarter. Further, SG&A expenses have been increasing for quite some time now. In the last reported quarter, it increased 19.7% on account of higher selling expenses driven by new store growth.
What the Model Predicts
Our proven model doesn’t 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.
Ollie's Bargain has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Costco (COST - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar General (DG - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #2.
Big Lots has an Earnings ESP of +3.85% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>