Ollie's Bargain Q3 Earnings Beat Estimates, Comps Decline 0.5% Y/Y

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Ollie's Bargain Outlet Holdings, Inc. OLLI announced its third-quarter fiscal 2024 results, revealing a mixed performance. While the top line fell short of the Zacks Consensus Estimate, the bottom line beat the same. Both metrics improved year over year.

The Harrisburg, PA-based company witnessed a decline in comparable store sales, breaking a streak of nine consecutive quarters of growth. As a result, management revised its fiscal 2024 guidance, lowering the sales forecast and narrowing the projected range for comparable store sales growth. However, the company maintained its full-year earnings view.

Here’s How OLLI’s Top & Bottom Lines Fared

This extreme-value retailer of brand-name merchandise posted adjusted earnings of 58 cents a share, which came a penny ahead of the Zacks Consensus Estimate and increased from 51 cents reported in the year-ago quarter.

Net sales of $517.4 million jumped 7.8% year over year due to new store unit growth, partly offset by a decline in comparable store sales. The top line missed the consensus mark of $518.6 million.

Comparable store sales for this Zacks Rank #4 (Sell) company decreased 0.5% in the quarter under discussion against a 7% increase registered in the prior-year period. The reported figure fell short of our expectation of 0.3% growth.

What Margins Have to Say About Ollie's Bargain

The gross profit grew 10.5% year over year to $214.5 million during the quarter. The gross margin expanded 100 basis points to 41.4%, driven by favorable supply-chain costs. However, this was partly offset by a lower merchandise margin due to the higher mix of consumables. We had anticipated 60 basis points of gross margin expansion.

Selling, general and administrative expenses (SG&A) expenses shot up 9% to $154.5 million from the prior-year quarter’s level due to an increase in selling expenses associated with the new store openings. As a percentage of net sales, SG&A increased 40 basis points to 29.9%. We anticipated SG&A expenses to deleverage by 20 basis points.

The operating income surged 14% to $44.5 million, while the operating margin expanded 50 basis points to 8.6%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) advanced 17% to $59.8 million during the quarter under review. The adjusted EBITDA margin increased 100 basis points to 11.6%. We had expected 40 and 60 basis points of expansion in the operating margin and EBITDA margin, respectively.

Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise

Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise
Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise

Ollie's Bargain Outlet Holdings, Inc. price-consensus-eps-surprise-chart | Ollie's Bargain Outlet Holdings, Inc. Quote


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