By Senad Karaahmetovic
Ollie's Bargain Outlet (NASDAQ:OLLI) shares are trading over 10% higher in pre-market Wednesday after the discount retailer issued a better-than-expected full-year forecast.
The company reported an adjusted EPS of $0.84 on revenue of $549.8 million, beating the estimate for earnings of $0.79 on sales of $542.2M. Comparable sales rose 3% year over year, beating the 1.8% estimate. The gross margin expanded by 110 basis points YoY to 37.6% but was still below the 38.3% estimate.
“We are pleased with our fourth quarter performance, which reflects an improvement in our transaction trends and a 3.0% increase in comparable store sales. Our team executed well in a highly promotional environment and delivered a 110 basis point increase in gross margin compared to last year,” said John Swygert, president and chief executive officer.
For FY24, the company sees adjusted EPS in the range of $2.49-2.58 on net sales of $2.05B (the midpoint), beating the consensus for adjusted EPS of $2.38 on sales of $2.01B. The FY forecast for comparable sales was in-line at +1.5%.
“For 2023, we are focused on offering great deals, expanding operating margins, and growing our store base, all of which will position us to deliver consistent, long-term growth for our shareholders. We believe we are well positioned to thrive in the current environment and our customers are responding to the tremendous values in our stores. Our deal pipeline is strong, and we are excited about the opportunities ahead of us.”
Goldman Sachs analysts said the share reaction is justified given “the strong 4Q22 results and 2023 guidance.”