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Factors to Know Ahead of Ollie's Bargain (OLLI) Q1 Earnings

Zacks Equity Research
·3 min read

Ollie's Bargain Outlet Holdings, Inc. OLLI is likely to register a decline in the top line when it reports first-quarter fiscal 2020 numbers on May 28, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $312.5 million, indicating a decline of 3.8% from the prior-year reported figure.

The bottom line is also expected to decrease year over year. We note that the Zacks Consensus Estimate for earnings for the quarter to be reported has increased by a couple of cents over the past 30 days to 34 cents. However, the figure suggests a decline of roughly 26.1% from the prior-year quarter.

This retailer of brand name merchandise has a trailing four-quarter negative earnings surprise of 4.2%, on average. In the last reported quarter, the company reported negative earnings surprise of 2.6%.

Key Factors to Note

Analysts pointed that the outbreak of novel coronavirus is likely to have impacted Ollie's Bargain’s top line performance. Further, the impact of stiff competition, supply chain pressures and cannibalization of comparable stores cannot be ruled out.

Nonetheless, the company’s business model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program, Ollie's Army bode well.

Again, the company’s results are dependent on the availability of brand name and closeout merchandise at compelling prices, as the same represents roughly 70% of goods purchased. Moreover, the company sells merchandise at prices up to 70% lower than the department and fancy stores, and up to 20-50% lower than mass-market retailers.

Ollies Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise
 

Ollies Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise
Ollies Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise

Ollies Bargain Outlet Holdings, Inc. price-consensus-eps-surprise-chart | Ollies Bargain Outlet Holdings, Inc. Quote

What Does the Zacks Model Unveil?

Our proven model predicts an earnings beat for Ollie's Bargain this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Ollie's Bargain has a Zacks Rank #3 and an Earnings ESP of +25.24%.

3 More Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Big Lots BIG presently has an Earnings ESP of +19.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General DG has an Earnings ESP of +6.69% and a Zacks Rank #2, at present.

Guess GES currently has an Earnings ESP of +12.75% and a Zacks Rank #2.

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