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How Ollie's Bargain (OLLI) Looks Just Ahead of Q4 Earnings

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Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) is likely to register improvement in the top line when it reports fourth-quarter fiscal 2019 numbers on March 19, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $436.7 million, indicating an improvement of 10.9% from the prior-year 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 76 cents. The figure suggests growth of 7% from the prior-year quarter.

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 positive earnings surprise of 5.1%.

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. SG&A expenses have been increasing for quite some time now. In the last reported quarter, it increased 15.4%. Further, cannibalization of comparable stores and short-term supply chain pressures may hurt the comparable-store sales performance.

What Does the Zacks Model Unveil?

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.

Although Ollie's Bargain carries a Zacks Rank #3, it has 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:

Children's Place (PLCE - Free Report) has an Earnings ESP of +1.16% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fastenal Company (FAST - Free Report) has an Earnings ESP of +1.07% and a Zacks Rank #3.

KB Home (KBH - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank #3.

5 Stocks Set to Double

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