雅虎香港財經 Here's Why It Is Prudent to Invest in Ollie's Bargain (OLLI)
Ollie's Bargain Outlet Holdings, Inc. OLLI has demonstrated remarkable resilience and growth potential in a challenging market environment. Based in Harrisburg, PA, Ollie's has defied industry trends by achieving a significant stock rally of 35.3% over the past six months, while the broader industry experienced a 1.6% decline. This performance highlights Ollie's ability to navigate through economic uncertainties and emerge stronger, showcasing its strategic and operational efficiency.
Ollie's success lies in its straightforward yet highly effective business model, 'buy cheap, sell cheap.' This principle, combined with rigorous cost management and a focus on enhancing store efficiency, has allowed it to maintain a competitive edge. The company has also leveraged its customer loyalty program, Ollie's Army, to bolster its market position further. By expanding this program, Ollie's has not only retained a loyal customer base but also attracted new shoppers.
Reflecting the positive sentiment around Ollie's Bargain, the Zacks Consensus Estimate for earnings per share has seen upward revisions. Over the past 30 days, analysts have increased their estimates for the current fiscal year by 3.1% to $3.29 per share and for the next fiscal year by 8.3% to $3.65 per share. These estimates indicate expected year-over-year growth rates of 13.1% and 10.9%, respectively. The numbers reinforce confidence in the stock.
Market Expansion Initiatives
Ollie's Bargain's commitment to offering value-driven merchandise assortments has made it a formidable player in the marketplace. The continued success of Ollie's Army has played a vital role in driving sales. With a consistently growing membership, Ollie's Bargain ended the first quarter of fiscal 2024 with 14.2 million active Ollie's Army members, accounting for slightly more than 80% of sales.
The company's performance has been bolstered by the favorable response to its deals and product offerings, which resonate with a wide customer base. Ollie's Bargain's ability to offer appealing and diverse products has been a key driver of its success. Additionally, the company's strong vendor relationships have played a crucial role in further cementing its position in the market.
Markedly, Ollie's Bargain's results depend on the availability of brand-name and closeout merchandise at compelling price points. The company remains steadfast in its commitment to delivering superior deals, enhancing operating margins and expanding its store network.
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Store Growth & Distribution Network
Ollie's Bargain remains committed to its long-term expansion strategy, aiming to have 1,300 in the long run. The company has consistently expanded its store network, achieving an impressive CAGR of 10.4%, growing from 345 stores in fiscal 2019 to 512 stores in fiscal 2023. Looking at fiscal 2024, Ollie's Bargain plans to open 50 new stores in fiscal 2024.
Importantly, Ollie's Bargain's new store real estate model prioritizes flexibility and focuses on the store size between 25,000 and 35,000 square feet. The company targets new store sales of about $4 million in the first full year of operations.
Final Thoughts
Ollie's Bargain’s strategic endeavors position the stock firmly for growth. With promising factors such as enhanced closeout opportunities, a growing trend of consumers trading down and ample room for expanding its store network, this Zacks Rank #2 (Buy) stock appears poised for a bright future.
Management has set ambitious targets for fiscal 2024, with net sales projected between $2,257 million and $2,277 million, marking an increase from $2,102.7 million reported in fiscal 2023. The company foresees fiscal 2024 adjusted earnings in the range of $3.18-$3.28 per share, up from the adjusted earnings of $2.91 reported last fiscal.
3 More Stocks Looking Red Hot
Here, we have highlighted three other top-ranked stocks, namely Vital Farms VITL, Sprouts Farmers Market SFM and Tractor Supply Company TSCO.
Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.5% and 59.3%, respectively, from the year-ago reported numbers.
Sprouts Farmers, the renowned grocery retailer, currently sports a Zacks Rank #1. SFM has a trailing four-quarter earnings surprise of 9.2%, on average.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of around 8% and 9.9%, respectively, from the year-ago reported numbers.
Tractor Supply Company, which operates as a rural lifestyle retailer, currently carries a Zacks Rank #2. TSCO has a trailing four-quarter earnings surprise of 2.7%, on average.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and earnings calls for growth of around 3% and 2.5%, respectively, from the year-ago reported numbers.
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Tractor Supply Company (TSCO) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
Vital Farms, Inc. (VITL) : Free Stock Analysis Report
