On Tuesday, Truist Securities reaffirmed its Buy rating on shares of Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI) with a steady price target of $109.00. According to InvestingPro data, the company maintains excellent financial health with a perfect Piotroski Score of 9, and its stock has delivered an impressive 29.2% return year-to-date.
Currently trading near its 52-week high, OLLI's valuation appears to be aligned with its Fair Value. The firm's analysis followed Ollie's third-quarter performance, which exhibited nearly flat comparable store sales with a slight decline of 0.5%, marginally improved profit margins, and earnings that met expectations. The company also confirmed its full-year earnings per share (EPS) forecast to be between $3.22 and $3.30.
The third quarter was anticipated to show lower comparable store sales, with an expected increase in the fourth quarter. Truist Securities highlighted Ollie's ability to attract customers seeking value during times of inflation with its deep-discount retail strategy. This strategy has proven effective, as InvestingPro data shows robust revenue growth of 14.15% and a healthy current ratio of 3.01, indicating strong operational efficiency.
Get access to 8 more exclusive InvestingPro Tips and comprehensive analysis through the Pro Research Report. The company's ongoing expansion and operational efficiency were also noted as reasons for the firm's positive outlook.
Ollie's third-quarter sales reached $517.4 million, closely aligning with Truist Securities' estimate of $520.3 million and consistent with data from Truist Card. The slight dip in comparable store sales was within the range of the company's guidance, which predicted flat performance, and contrasted with Truist's more optimistic projection of a 0.5% increase.
The quarter faced challenges such as tough year-over-year comparisons, a marketing flyer shift from the third to the fourth quarter, and disruptions due to store closures.
The company is expected to see a boost in fourth-quarter comparable store sales due to the shifted timing of marketing initiatives. Truist Securities suggests that external factors such as competitor Big Lot closures and storms in the Southeast may have negatively impacted the third quarter's performance.
Despite these challenges, the firm believes that Ollie's Bargain Outlet remains well-positioned to capitalize on its value-centric approach in the current economic climate. Want deeper insights? InvestingPro subscribers get exclusive access to detailed financial metrics, Fair Value calculations, and expert analysis for over 1,400 US stocks, including OLLI's comprehensive Pro Research Report.
In other recent news, Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) reported third-quarter earnings that exceeded analyst expectations, with adjusted earnings per share at $0.58, surpassing the consensus estimate of $0.57.
Despite this, the company slightly missed on revenue, recording $517.4 million against the anticipated $519.55 million. Notably, total net sales rose by 7.8% to $517.4 million, a development attributed to new store openings. On the downside, comparable store sales saw a decrease of 0.5% year-over-year.
In terms of expansion, Ollie's set a new record by opening 24 stores in the quarter, though it also closed three, bringing the total to 546 stores across 31 states, an 8.1% year-over-year increase in store count.
Looking into the future, the company has reaffirmed its full-year 2024 guidance, expecting earnings per share of $3.22-$3.30 on revenue of $2.27-$2.28 billion. This expectation aligns closely with analyst consensus, which predicts an EPS of $3.27 on $2.28 billion in revenue. These recent developments underscore the company's continued growth and performance.
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