Ollie's Bargain (OLLI) Stock Declines On Q4 Earnings Miss
Zacks Investment Research | Mar 19, 2020 10:12PM ET
Shares of Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) declined roughly 7.4% during the after-market trading session on Mar 19. The decline can be attributed to the company’s lower-than-expected fourth-quarter fiscal 2019 results. Moreover, the company continued to witness soft comparable-store sales performance. Margins also contracted on a year-over-year basis.
Management highlighted that the fourth quarter was quite challenging in terms of sales, as the company’s significant investment in toy category impacted the performance of other key merchandise categories. Further, six fewer shopping days between Thanksgiving and Christmas impacted sales. Nonetheless, the company’s cost containment efforts did provide some cushion.
The company is optimistic about its business model of “buying cheap and selling cheap,” and remains focused on improving store productivity. Notably, both the top and bottom lines improved year over year during the quarter under review. However, given the coronavirus outbreak, the company has decided not to provide fiscal 2020 guidance.
Quarterly Results
Ollie’s Bargain delivered adjusted earnings of 74 cents a share that missed the Zacks Consensus Estimate by a couple of cents but improved 4.2% from the year-ago quarter’s figure of 71 cents. This year-over-year increase can be attributed to higher net sales and better expense management.
Notably, net sales improved 7.2% to $422.4 million but lagged the consensus mark of $436.7 million. The increase in the top line can be attributed to robust new store performance from the 42 stores opened in fiscal 2019, which includes 14 former Toys R Us locations.
However, comparable-store sales decreased 4.9% during the quarter under review, following a decline of 1.4% in the preceding period. We note that the reported figure compared unfavorably with the prior-year quarter’s increase of 5.4%.
Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise
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