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Ollie’s Bargain Outlet Holdings, Inc. OLLI has caught the attention of investors, with its stock climbing 8.4% in the past month, fueled by robust financial results and strategic growth initiatives. While this performance has been impressive, it raises a critical question: Is there still room for further upside, or has OLLI reached its peak?
With the company’s solid fundamentals, aggressive expansion plans and increasing consumer loyalty, OLLI appears well-positioned to maintain its upward trajectory. The stock has outpaced the industry, which showcased a decline of 3.5% in the past month.
OLLI Stock Past Month Performance
Image Source: Zacks Investment Research
Ollie’s Bargain stock closed at $106.17 yesterday, positioning it 11.5% below its 52-week high of $120.03 reached on Dec. 20, 2024. Despite this dip, the stock is trading above its 50-day and 200-day moving averages, signaling a bullish trend. As investors evaluate whether this momentum can continue, it is worth examining OLLI’s future prospects to determine the best course of action for your portfolio.
OLLI Trades Above 50 & 200-Day Moving Averages
Image Source: Zacks Investment Research
Ollie's Army & Store Expansion: Key to Growth
With a strong financial performance and strategic growth initiatives, Ollie’s Bargain is well-positioned to deliver long-term shareholder value. In the third quarter of fiscal 2024, OLLI registered a 7.8% increase in net sales to $517.43 million and a 13.7% rise in adjusted earnings per share to 58 cents. The company also achieved a 100-basis point improvement in the gross margin to 41.4%, driven by reduced supply-chain costs.
A key driver of OLLI’s growth is its store expansion strategy. In the third quarter, the company opened 24 new stores, a record number, bringing its total count to 546 stores across 31 states. The acquisition of Big Lots locations and multiple “99 Cents Only” stores has strengthened its portfolio, ensuring a presence in high-traffic areas. With plans to open at least 56 new stores in fiscal 2025, OLLI is on track to achieve its 10% annual unit growth target.
The company has also leveraged its customer loyalty program, Ollie's Army, to bolster its market position further. The company ended the third quarter with 14.8 million active Ollie's Army members, accounting for more than 80% of sales. This program, coupled with targeted digital marketing efforts, has helped the company attract a younger demographic, with the 18-45 age group being the fastest-growing segment.
Ollie’s robust supply-chain infrastructure is another significant advantage. The newly operational distribution center in Princeton, IL, which supports more than 150 stores, has enhanced the company’s ability to manage its expanding footprint. The company now can serve up to 750 stores. Investments in technology and productivity underscore OLLI’s focus on operational excellence.
As the largest buyer of closeout and excess inventory, OLLI benefits from its scale, enabling it to secure favorable deals with suppliers. Its ability to offer high-quality branded products at prices 20-70% lower than traditional retailers provides a competitive advantage. The company’s financial stability, with $304 million in cash and short-term investments and no outstanding debt, ensures flexibility to capitalize on future opportunities.