GICS Sector : Consumer Defensive
Ollie's Bargain Outlet Holdings, Inc.operates as a retailer of brand name merchandise.The company offers housewares, bed and bath, food, floor coverings, health and beauty aids, books and stationery, toys, and electronics; and other products, including hardware, candy, clothing, sporting goods, pet and lawn, and garden products.
Ollie's Bargain Outlet Holdings reported a robust third quarter, with net sales increasing 19% to $614 million, driven by new store openings and comparable store sales growth of 3.3%. The company's adjusted net income and adjusted earnings per share rose 29% to $46 million and $0.75, respectively, beating analyst estimates of $0.74. Gross margin decreased 10 basis points to 41.3%, while SG&A expenses decreased 50 basis points to 29.4%, indicating effective cost management.
Publication Date: Dec -20
The company opened 32 new stores in the quarter, bringing the total to 645 stores, an 18% increase year-over-year. Ollie's Army loyalty program saw significant growth, with a 12% increase in members to 16.6 million. The company is shifting its marketing strategy to a more digital-first approach, which has shown positive results, including a significant increase in sales in October.
With a P/E Ratio of 29.62 and an expected revenue growth rate of 16.4% next year, the company's valuation appears reasonable. The P/S Ratio is 2.61, and the EV/EBITDA is 21.03, indicating a moderate valuation. The company's ROE is 12.7%, and ROIC is 8.11%, demonstrating a decent return on equity and invested capital. As Robert F. Helm noted, "quarter-to-date trends are currently ahead of guidance," citing strength in transaction trends and a step change in AUR.
Ollie's guidance for gross margin is 40.3%, above their long-term algorithm of 40%. The company has seen strong new store performance, with 85% of stores opened this year beating plan. Stores in markets where Big Lots has closed continue to outperform the rest of the chain, with a low single-digit to mid-single-digit lift in sales.
The company plans to open 86 new stores in 2025 and has a long-term target of 1,300 stores with a minimum 10% annual unit growth. With a strong pipeline of new stores and a focus on digital marketing, Ollie's is well-positioned for continued growth. The company expects to benefit from a favorable real estate environment and a step change in new store openings, driving double-digit top-line growth and mid-teens bottom-line growth in the long term.
Ollie's Bargain Outlet Is A Way To Invest In Retail Sector Weakness
Jan -29
Ollie’s Bargain Outlet Holdings, Inc. $OLLI Shares Sold by Universal Beteiligungs und Servicegesellschaft mbH
Jan -26
Emerald Advisers LLC Reduces Position in Ollie’s Bargain Outlet Holdings, Inc. $OLLI
Jan -22
Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) Receives Average Recommendation of “Moderate Buy” from Analysts
Jan -19
SG Americas Securities LLC Boosts Position in Ollie’s Bargain Outlet Holdings, Inc. $OLLI
Jan -12
This Fund Sold $81 Million of Ollie's Stock, but Kept a Nearly $100 Million Bet After a 13% Year
Jan -10
Ollie's Bargain Outlet Holdings: Visible Low-Teens Earnings Growth
Jan -07
Ollie’s Bargain Outlet Holdings, Inc. $OLLI Shares Bought by Braun Stacey Associates Inc.
Jan -02
Ollie's Bargain Outlet's 10% growth in the Home segment is driven by increasing demand for affordable home goods, expansion of store count, and effective inventory management. Additionally, the company's 'buy-low, sell-low' business model, which offers customers deep discounts on brand-name products, continues to resonate with price-conscious consumers, contributing to the segment's growth.
Ollie's Bargain Outlet's 12% growth in Consumables is driven by increasing demand for everyday essentials, strategic pricing, and effective inventory management. The company's 'buy-low, sell-low' model, which offers customers significant discounts, also contributes to growth. Additionally, Ollie's focus on private label products and partnerships with national brands further boosts sales.
Ollie's Bargain Outlet's 9% growth is driven by increasing popularity of off-price retail, effective inventory management, and strategic store expansions. Additionally, the company's focus on offering a wide range of products at discounted prices, creating a treasure hunt-like experience for customers, and maintaining a strong balance sheet contribute to its growth momentum.
Ollie's Bargain Outlet's 11% seasonal growth is driven by increasing demand for off-price retail, effective inventory management, and strategic store expansions. Additionally, the company's focus on offering a treasure hunt-like shopping experience, competitive pricing, and a loyal customer base contribute to its strong seasonal performance.
Ollie's Bargain Outlet offers a wide range of furniture products, including sofas, loveseats, chairs, tables, desks, beds, and more at discounted prices.
The company sells a variety of housewares, including kitchen utensils, gadgets, cookware, dinnerware, and home decor items at discounted prices.
Ollie's Bargain Outlet offers a range of bed and bath products, including bedding, towels, linens, and more at discounted prices.
The company sells a variety of food and beverage products, including snacks, beverages, and specialty foods at discounted prices.
Ollie's Bargain Outlet offers a range of health and beauty products, including skincare, haircare, and fragrances at discounted prices.
The company sells a variety of toys and games, including puzzles, action figures, dolls, and more at discounted prices.
Ollie's Bargain Outlet offers a range of electronic products, including TVs, laptops, tablets, and more at discounted prices.
The company sells a variety of sports and outdoor products, including bicycles, camping gear, and athletic equipment at discounted prices.
Ollie's Bargain Outlet offers a range of arts and crafts supplies, including paints, canvases, and more at discounted prices.
Ollie's Bargain Outlet Holdings, Inc. operates in a niche market, offering closeout merchandise and excess inventory at discounted prices. The threat of substitutes is low due to the unique nature of its business model.
While customers have some bargaining power due to the availability of alternative discount retailers, Ollie's Bargain Outlet Holdings, Inc.'s unique product offerings and treasure hunt-like shopping experience help to mitigate this power.
Ollie's Bargain Outlet Holdings, Inc. has a strong bargaining position with its suppliers due to its ability to purchase excess inventory at discounted prices. This allows the company to negotiate favorable terms with its suppliers.
The threat of new entrants is low due to the significant barriers to entry in the closeout merchandise market. Ollie's Bargain Outlet Holdings, Inc.'s established relationships with suppliers and its expertise in sourcing and pricing merchandise create a high barrier to entry for new competitors.
While Ollie's Bargain Outlet Holdings, Inc. operates in a niche market, there is still some rivalry with other discount retailers. However, the company's unique business model and focus on closeout merchandise help to differentiate it from competitors.
| Value | |
|---|---|
| Debt Weight | 5.68% |
| Debt Cost | 3.95% |
| Equity Weight | 94.32% |
| Equity Cost | 7.74% |
| WACC | 7.52% |
| Leverage | 6.02% |
Value: 3.1
Growth: 8.4
Quality: 6.2
Yield: 2.0
Momentum: 9.0
Volatility: 7.3
1-Year Total Return ->
Value: 3.9
Growth: 6.0
Quality: 5.7
Yield: 2.0
Momentum: 9.0
Volatility: 8.0
1-Year Total Return ->
Value: 3.1
Growth: 6.7
Quality: 8.1
Yield: 0.0
Momentum: 5.5
Volatility: 7.7
1-Year Total Return ->
Value: 2.6
Growth: 7.6
Quality: 6.1
Yield: 0.0
Momentum: 8.5
Volatility: 6.0
1-Year Total Return ->
Value: 7.7
Growth: 8.3
Quality: 7.4
Yield: 0.0
Momentum: 0.5
Volatility: 2.0
1-Year Total Return ->
Value: 1.8
Growth: 5.2
Quality: 4.8
Yield: 2.0
Momentum: 6.0
Volatility: 3.3
1-Year Total Return ->