Is Ollie’s Bargain Outlet a Retail Stock to Watch? (2024)

Is Ollie’s Bargain Outlet a Retail Stock to Watch? (1)Is Ollie’s Bargain Outlet a Retail Stock to Watch? (2)

Ollie’s Bargain Outlet Holdings, Inc. (OLLI), a leading retailer of brand name merchandise, reported its fiscal 2024 first-quarter results. The company posted revenue of $508.82 million, indicating an increase of 10.8% compared to the first quarter of 2023. And its gross profit grew 17.2% from the year-ago value to $209.36 million.

During the first quarter, Ollie opened four new stores in the U.S., ending the quarter with 516 stores in 30 states in total, reflecting a year-over-year increase in store count by 8.4%.

Further, the company entered into a partnership with Sunbit to launch a co-branded Visa® credit card. It will be OLLI’s first-ever credit card for the customers, and they will be able to avail themselves of rewards and benefits for purchases made at OLLI and every place where a visa is accepted.

John Swygert, Chief Executive Officer, commented, “We are extremely pleased with our performance this quarter. Our team is executing at a very high level, offering amazing deals to our customers, delivering consistent financial results, and investing in future growth. Our first quarter comparable store sales, total revenue, gross margin, and expenses were all better than expected, demonstrating the strength of our business.”

The company raised its sales and earnings outlook for fiscal 2024. OLLI’s net sales is expected between $2.26 billion and $2.28 billion. Its operating income is expected to be $250 million - $258 million. Also, the company’s adjusted net income is expected to range from $196 to $202 million and $3.18 to $3.28 per share.

Shares of OLLI have gained 20.1% over the past six months and 25.5% over the past year to close its last trading session at $91.86. However, the stock has declined 7.4% over the past month.

Let’s look at factors that could influence OLLI’s performance in the upcoming months.

Positive Recent Development

On July 23, OLLI announced partnership with Sunbit, a leading financial technology company, to launch a co-branded Visa® credit card. The credit card program will offer rewards and benefits for purchases made at OLLI’s and every place where visa is accepted.

With this launch, OLLI’s offering its first-ever credit card to the customers making it easier for customers to shop with OLLI, earn even more rewards, and receive exclusive benefits.

Solid Financials

For the first quarter that ended May 4,2024, OLLI’s net sales increased 10.8% year-over-year to $508.82 million. Its gross profit grew 17.2% from the year-ago value to $209.36 million. Also, the company’s operating income of $56.50 million, indicates growth of 46.6% year-over-year.

Furthermore, the company’s net income and EPS came in at $46.34 million and $0.75, up 49.6% and 50% from the prior year’s quarter, respectively. OLLI’s cash and cash equivalents and total assets stood at $212.25 million and $2.31 billion as of May 4,2024.

Mixed Historical Growth

OLLI’s revenue grew at a CAGR of 4% over the past three years. The company’s tangible book valueincreased at a CAGR of 6.4% over the same period while the company’s total assets grew at a CAGR of 4.2% over the same time frame.

However, the company’s EBIT and net income decreased at CAGRs of 7% and 9.4% over the same timeframe, respectively.

Favorable Analyst Estimates

Analysts expect OLLI’s revenue for the fiscal year (ending January 2027) to come in at $2.76 billion and the consensus EPS is estimated to be $3.97 for the same period. Further, the company has surpassed the consensus EPS estimates in all of the trailing four quarters.

High Profitability

OLLI’s trailing-12-month EBIT margin of 11.42% is 45.9% higher than the 7.82% industry average. Its trailing-12-month net income margin of 9.14% is significantly higher than the industry average of 4.62%. Likewise, the stock’s trailing-12-month gross profit margin of 40.10% is 8.3% higher than the industry average of 37.03%.

Furthermore, the stock’s trailing-12-month ROCE, ROTC, and ROTA of 13.50%, 7.98% and 8.51% are higher than the 11.41%, 6.14%, and 4.19% industry average, respectively.

Elevated Valuation

In terms of forward non-GAAP P/E, OLLI is currently trading at 28.08x, 86.8% higher than the industry average of 15.03x. The stock’s forward EV/Sales and Price/Sales of 2.54x and 2.47x are considerably higher than the industry average of 1.18x and 0.84x, respectively.

Additionally, the stock’s forward EV/EBITDA and Price/Book of 19.24x and 3.46x are 100.5% and 40% higher than the industry averages of 9.60x and 2.47x, respectively.

POWR Ratings Reflect Uncertainty

OLLI’s mixed fundamentals are reflected in its POWR Ratings. The stock has an overall rating of C, translating to a Neutral in ourproprietarysystem. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. OLLI has a C grade for Growth, in sync with its mixed historical growth.

The stock also has a D grade for Value, consistent with its mixed valuation.

OLLI is ranked #31 among the 41 stocks in the Specialty Retailers industry.

Beyond what I have stated above, we have also given OLLI grades for Momentum, Sentiment, Stability, and Quality. Get access to all the OLLI ratings here.

Bottom Line

OLLI reported solid financial results in the last reported quarter. Further, the company’s long-term prospects appear promising, driven by its strong market footprint, widening operation scale, and strategic investments. However, it continues to grapple with rising competition from companies like Global-e Online Ltd. (GLBE) and Etsy Inc. (ETSY).

Given OLLI’s mixed financials, historical growth and elevated valuation, waiting for a better entry point in this stock seems prudent.

Stocks to Consider Instead of Ollie’s Bargain Outlet Holdings, Inc. (OLLI)

Given its near-term uncertain prospects, the odds of OLLI outperforming in the weeks and months ahead are compromised. However, there are many industry peers with much more impressive POWR Ratings. So, consider these A (Strong Buy) or B (Buy) stocks from the Specialty Retailers industry instead:

Next PLC ADR (NXGPY)

Upbound Group Inc. (UPBD)

Torrid Holdings Inc. (CURV)

For exploring more A and B-rated specialty retailers stocks, click here.

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OLLI shares were unchanged in after-hours trading Wednesday. Year-to-date, OLLI has gained 13.62%, versus a 15.12% rise in the benchmark S&P 500 index during the same period.

Is Ollie’s Bargain Outlet a Retail Stock to Watch? (2024)

FAQs

Is Ollie's a good stock to buy? ›

Ollie's Bargain Outlet Holding has a consensus rating of Moderate Buy which is based on 10 buy ratings, 2 hold ratings and 1 sell ratings. The average price target for Ollie's Bargain Outlet Holding is $100.08.

How does Ollie's get their merchandise? ›

Ollie's buyers scour the world looking for closeouts, overstocks, package changes, manufacturer refurbished goods, and irregulars. Much of the merchandise comes direct from the finest manufacturers in the country and abroad.

Is Ollie's profitable? ›

Net income: US$181.4m (up 77% from FY 2023). Profit margin: 8.6% (up from 5.6% in FY 2023). The increase in margin was driven by higher revenue. EPS: US$2.94 (up from US$1.65 in FY 2023).

Is Ollie's Bargain Outlet publicly traded? ›

Ollie's is traded under the symbol OLLI on NASDAQ.

What is the stock price forecast for Ollie's in 2025? ›

On average, Wall Street analysts predict that Ollie's Bargain Outlet Holdings's share price could reach $101.46 by Jul 12, 2025.

What are the best share to buy? ›

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1Vodafone Group PLC16.41
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3Legal & General Group PLC6.16
4NVIDIA Corp5.46
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What is the Ollie's Bargain Outlet controversy? ›

Federal Lawsuit Says Ollie's Bargain Outlet Misclassifies Store Managers to Avoid OT Pay. A class-action lawsuit against the national retailer that seeks overtime pay for store managers says their jobs are "indistinguishable" from non-exempted employees who are paid hourly plus overtime.

What company owns Ollie's? ›

OLLI (U.S.: Nasdaq)

What state has the most Ollies stores? ›

Pennsylvania

Can you buy stock in Ollie's? ›

To buy fractional shares of Ollie's Bargain Outlet Holdings Inc stock, you'll need to sign up for Stash and open a personal portfolio. Stash allows you to purchase smaller pieces of investments, called fractional shares, rather than having to pay the full price for a whole share.

Does Ollie's get stuff from Target? ›

The Ollie's Bargain Outlet business model involves purchasing merchandise directly from manufacturers and other retailers, such as Walmart/Sam's Club, Target, Kroger, Costco, Winn-Dixie, Publix, Whole Foods Market, and TJX-owned stores, in bulk and selling in smaller quantities to customers with the minimum operational ...

What is Ollie's net worth? ›

Market cap: $5.87 Billion

As of August 2024 Ollie's Bargain Outlet has a market cap of $5.87 Billion. This makes Ollie's Bargain Outlet the world's 2453th most valuable company by market cap according to our data.

What is the target price for Gamb stock? ›

The average price target for Gambling.com is $13.20. This is based on 6 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $18.00 ,the lowest forecast is $10.00.

Should I buy Ptlo stock? ›

Portillo's has 60.97% upside potential, based on the analysts' average price target. Portillo's has a consensus rating of Strong Buy which is based on 7 buy ratings, 2 hold ratings and 0 sell ratings. The average price target for Portillo's is $15.63.

Is Lowe's a good stock to buy? ›

Lowe's Companies has a consensus rating of Moderate Buy which is based on 11 buy ratings, 11 hold ratings and 0 sell ratings. The average price target for Lowe's Companies is $254.37. This is based on 22 Wall Streets Analysts 12-month price targets, issued in the past 3 months.

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