Ollie’s authorizes new $300 million stock buyback

HARRISBURG, Pa. - Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ: OLLI) has announced a new share repurchase program, under which the company is authorized to buy back an additional $300 million of its outstanding common stock. The authorization, approved by the Board of Directors, will remain in effect until March 31, 2029.

The company, which prides itself as America’s largest retailer of closeout merchandise and excess inventory, may conduct the repurchase through open market transactions, privately negotiated transactions, or a mix of these methods. The timing and amount of the share repurchases will be determined by the company’s management based on market conditions and other business considerations.

Since initiating its first share buyback in 2019, Ollie’s has repurchased approximately $414 million worth of its shares, which equates to around 5.5 million shares. The company’s President and CEO, Eric van der Valk, emphasized that while Ollie’s is focused on accelerated growth in the short term, it remains dedicated to rewarding its shareholders through repurchases. He also highlighted the company’s robust cash generation, noting that Ollie’s has increased its cash balances annually.

At the close of fiscal year 2024, the company reported having $429 million in cash and short-term investments, with no outstanding borrowings under its revolving credit facility. This financial position, according to van der Valk, provides Ollie’s with the flexibility to fund growth, return capital to shareholders, and seize unique market opportunities as they arise.

Ollie’s Bargain Outlet operates 575 stores across 31 states, offering customers a variety of brand-name products at significant discounts. These products span numerous categories, including housewares, food, books, and health and beauty aids.

The information in this article is based on a press release statement from Ollie’s Bargain Outlet Holdings, Inc. The company has made forward-looking statements regarding its business strategies and financial performance. These statements are subject to risks, uncertainties, and changes in circumstances that could affect the company’s actual results in the future. Ollie’s does not have an obligation to update these forward-looking statements publicly, except as required by law.

In other recent news, Ollie’s Bargain Outlet has been the focus of several analyst reports and strategic developments. RBC Capital Markets raised its price target for Ollie’s to $133, maintaining an Outperform rating, following the company’s acquisition of 40 additional store leases from Big Lots. This acquisition is expected to bolster Ollie’s store growth and market share. KeyBanc also maintained an Overweight rating with a $125 price target, highlighting the strategic expansion with the acquisition of former Big Lots locations, which is anticipated to drive sales and earnings growth in 2025.

Meanwhile, Piper Sandler reaffirmed an Overweight rating with a $126 target, emphasizing Ollie’s strong positioning amid economic uncertainties and the potential benefits from the Big Lots liquidation. Truist Securities maintained a Buy rating and a $121 price target, expressing optimism about Ollie’s fourth-quarter earnings and store growth prospects. In contrast, Jefferies downgraded Ollie’s from Buy to Hold, lowering the price target to $111 due to concerns about inventory growth outpacing sales and potential challenges in 2025.

These recent developments reflect a mix of confidence and caution among analysts regarding Ollie’s future performance and strategic direction. The company’s acquisition and expansion strategies are seen as key factors influencing its growth trajectory, while inventory management and economic conditions remain areas of focus. Investors are closely monitoring these factors as Ollie’s navigates the evolving retail landscape.

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