Goldman Sachs maintains buy rating on Ollie’s stock after strong Q1

On Tuesday, Goldman Sachs analysts reaffirmed their Buy rating for Ollie’s Bargain Outlet stock (NASDAQ: OLLI), keeping the price target at $127.00. According to InvestingPro data, the stock is currently trading above its Fair Value, with analyst targets ranging from $105 to $137. This decision follows Ollie’s release of its first-quarter fiscal 2025 results, which exceeded expectations.

Ollie’s reported adjusted earnings per share of $0.75 for the first quarter, surpassing both Goldman Sachs and consensus estimates of $0.71. The company’s net sales increased by 13.4% year-over-year, reaching $576.8 million, which also exceeded the Goldman Sachs and consensus estimates of $561.3 million and $565.9 million, respectively. Comparable sales rose by 2.6%, outperforming the anticipated growth of 1.0% to 1.6%. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 3.27, indicating robust liquidity. Get access to 10+ additional ProTips and comprehensive financial metrics with InvestingPro.

The adjusted operating margin for the quarter fell by 136 basis points year-over-year to 9.7%, slightly above the expected 9.6%. The gross margin remained stable at 41.1% compared to the previous year.

Additionally, Ollie’s management updated its full-year fiscal 2025 guidance. The company now projects sales between $2.58 billion and $2.60 billion, up from the previous range of $2.56 billion to $2.59 billion. Comparable store sales growth is anticipated to be between 1.4% and 2.2%, revised from the prior forecast of 1% to 2%. The projections for gross margin, operating income, and adjusted earnings per share remain unchanged.

In other recent news, Ollie’s Bargain Outlet reported a strong first-quarter performance with a 2.6% increase in comparable sales, surpassing RBC Capital’s estimate of 2.0% and the consensus forecast of 1.5%. The company also posted an adjusted earnings per share growth of 2% year-over-year, reaching $0.75, which exceeded both RBC Capital’s projection of $0.74 and the consensus estimate of $0.71. RBC Capital maintained its Outperform rating with a price target of $133, citing potential market share gains from Big Lots (NYSE:BIG) closures. UBS analysts reiterated a Neutral rating with a $123 price target, noting the resilience of Ollie’s closeout model and its flexible purchasing strategy. Truist Securities maintained a Buy rating with a $126 target, observing sales acceleration in late March and April, despite a softer start to the quarter. KeyBanc Capital Markets raised its price target from $125 to $135, maintaining an Overweight rating and suggesting potential for Ollie’s comparable store sales to exceed initial expectations. These developments reflect a range of analyst perspectives on Ollie’s performance amid evolving market conditions and competitive dynamics.

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