Truist Securities maintains buy rating on Ollie’s stock

On Tuesday, Truist Securities analysts reaffirmed their Buy rating on Ollie’s Bargain Outlet stock (NASDAQ: OLLI), maintaining a price target of $126.00. According to InvestingPro data, the stock has shown strong momentum with a 34% return over the past year. The analysts noted that the company’s first-quarter sales and comparable store sales slightly exceeded their expectations, with sales reaching $577 million compared to the forecasted $561 million, and comparable store sales increasing by 2.6% against the projected 2.0%.

The company’s earnings before interest and taxes (EBIT) margin also surpassed expectations, standing at 9.7% compared to the predicted 9.3%. This led to an adjusted earnings per share (EPS) of $0.75, exceeding the anticipated $0.69. The company maintains a healthy financial position with a strong current ratio of 3.27 and operates with moderate debt levels. Truist Securities highlighted the strength of Ollie’s deep-discount model, which continues to attract consumer spending despite broader discretionary pressures.

While early second-quarter sales appear to be slightly slower, Ollie’s has raised its full-year comparable store sales guidance and reiterated its earnings outlook. InvestingPro analysis shows 4 analysts have revised their earnings upward for the upcoming period, with revenue growth forecast at 13% for the next fiscal year. This is despite the company facing costs related to dark rent for stores purchased out of bankruptcy, growth expenses for newer stores, and a full year of tariffs. For deeper insights into OLLI’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Truist Securities remains optimistic about Ollie’s prospects, citing strong consumer appeal, double-digit unit growth, and the potential benefits from orphaned sales from competitors like Big Lots (NYSE:BIG). The analysts believe these factors contribute to the company’s solid momentum, supported by its impressive gross profit margin of 40.25% and steady revenue growth of 8% over the last twelve months.

Further details are expected to be discussed in a call later today, providing more insights into Ollie’s performance and future strategies.

In other recent news, Ollie’s Bargain Outlet reported strong first-quarter fiscal 2025 results, with adjusted earnings per share of $0.75, surpassing consensus estimates of $0.71. The company achieved a 13.4% year-over-year increase in net sales, reaching $576.8 million, exceeding expectations. Ollie’s management updated its full-year fiscal 2025 guidance, projecting sales between $2.58 billion and $2.60 billion. Analysts from Goldman Sachs and Truist Securities maintained their Buy ratings, reflecting confidence in the company’s performance. RBC Capital also reiterated its Outperform rating, setting a price target of $133.00, citing potential benefits from the closure of Big Lots stores. UBS analysts maintained a Neutral rating with a $123.00 target, noting Ollie’s resilience amid market volatility. RBC Capital highlighted Ollie’s strategic efforts to capitalize on Big Lots closures, with 76% of nearby stores experiencing higher traffic. Ollie’s is projected to achieve a comparable sales growth of 3.5% in 2025, according to RBC, which is higher than the consensus forecast. These developments underscore Ollie’s adaptability and strategic positioning in the evolving retail landscape.

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