Ollie's Bargain Outlet sees strong revenue growth, raises guidance, and maintains margins

From Nasdaq: 2024-08-30 13:00:00

Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ: OLLI) reported strong revenue growth in the second quarter of fiscal year 2024, reaching $578.4 million, surpassing analyst estimates by 3%. Despite a slight miss on earnings, the company raised its revenue guidance to $2.28 billion and projected full-year non-GAAP EPS of $3.26. Ollie’s maintained steady gross and EBITDA margins, with 525 stores in operation, contributing to its growth.

Ollie’s sales growth strategy revolves around effective expansion plans and customer retention. With a 10.6% annualized revenue growth rate over five years, the company opened new stores in underpenetrated markets, increased sales at existing stores, and optimized its supply chain. Although a slight deceleration is expected, Ollie’s growth remains robust amidst intensified competition and evolving consumer preferences.

Ollie’s successful same-store sales growth of 4.6% despite a slight slowdown in Q2 FY2024 underscores its strong customer demand. However, competition within the discount retail sector and broader economic challenges may impact future growth. Ollie’s growth strategy includes aggressive store expansion and improving supply chain efficiencies to capture new market segments and enhance customer experience.

Investing in Ollie’s presents opportunities and risks, including competitive pressures from online retailers like Amazon, volatility in the wholesale market affecting margins, and vulnerability to economic downturns impacting consumer discretionary spending. While the company’s growth potential and unique value proposition are promising, investors must weigh the associated risks to make informed decisions in the discount retail sector.



Read more at Nasdaq: Is Ollie’s Bargain Outlet a Bargain for Investors?