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How Ollie's Bargain (OLLI) Looks Just Ahead of Q4 Earnings

·4 min read

Ollie's Bargain Outlet Holdings, Inc. OLLI is likely to register an increase in the top line when it reports fourth-quarter fiscal 2020 numbers on Mar 18, after the market closes. The Zacks Consensus Estimate for revenues is pegged at $486.1 million, indicating an improvement of 15.1% from the prior-year quarter.

Further, the bottom line of this retailer of brand name merchandise is expected to improve year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable at 85 cents over the past 30 days. The figure suggests growth from 74 cents reported in the year-ago period.

Notably, the company has a trailing four-quarter earnings surprise of 17.3%, on average. In the last reported quarter, this Harrisburg, PA-based company’s bottom line surpassed the Zacks Consensus Estimate by a significant margin of 12.1%.

Key Factors to Note

Ollie's Bargain business operating model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity and expansion of customer reward program — Ollie's Army are likely to have contributed to the fourth-quarter performance. We believe that the company’s endeavors might have aided it in capitalizing on growing consumer demand for essentials and other daily purchases amid the coronavirus pandemic.

However, comparable store sales growth rate for the fourth quarter is likely to have decelerated when compared with the decent third-quarter performance. On its last earnings call, management highlighted that comparable store sales moderated in the latter part of the third quarter and continued to do so in the fourth quarter. It also cautioned about uncertainty related to the pandemic and informed that it is hard to predict the impact of the health and financial crisis on consumer behavior. We note that the Zacks Consensus Estimate for comparable store sales for the to-be-reported quarter is currently pegged at 3%.

Apart from the aforementioned factors, we cannot ignore concerns related to deleverage in supply-chain cost, promotional pressure and higher expenses associated with operating through the ongoing pandemic.

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 the Zacks Model Unveils

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 +3.73%.

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:

Dave & Buster's Entertainment PLAY has an Earnings ESP of +5.54% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Outdoor Brands AOUT has an Earnings ESP of +3.96% and a Zacks Rank #3.

Williams-Sonoma WSM has an Earnings ESP of +1.37% and a Zacks Rank #3.

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