A month has gone by since the last earnings report for Ollie's Bargain Outlet (OLLI). Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Ollie's Bargain Outlet due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ollie's Bargain Q1 Earnings Beat, Comps Rise 1.7%, EPS View Up
Ollie’s Bargain delivered first-quarter fiscal 2026 results, wherein net sales fell short of the Zacks Consensus Estimate, while earnings beat the same. Both top and bottom lines increased year over year, driven by new store growth, positive comparable-store sales, margin expansion and disciplined expense management. Management raised its fiscal 2026 earnings outlook following the stronger-than-expected performance.
The company’s value-focused business model continued to resonate with consumers against an uncertain macroeconomic backdrop. During the quarter, Ollie’s opened 27 new stores and ended the period with 672 stores across 35 states, reflecting 15.1% year-over-year growth. The Ollie’s Army loyalty program expanded 12.6% to 17.5 million members, highlighting continued customer engagement and acquisition.
OLLI’s Performance: Key Metrics & Insights
Ollie’s Bargain reported adjusted earnings of 91 cents per share, which surpassed the Zacks Consensus Estimate of 87 cents by 4.6%. The figure increased 21.3% from adjusted earnings of 75 cents reported in the year-ago quarter.
Net sales rose 14.2% year over year to $658.9 million, driven by new store openings and positive comparable-store sales growth. However, revenues narrowly missed the Zacks Consensus Estimate of $666 million.
Comparable-store sales increased 1.7%, supported primarily by higher basket size. Food, general merchandise, hardware, seasonal décor and stationery were among the top-performing categories during the quarter, while weather-sensitive categories such as lawn and garden and summer furniture lagged due to unfavorable weather conditions.
Management noted that sales trends remained positive throughout the quarter, though elevated fuel prices and unseasonable weather affected customer traffic, particularly in southern markets. The company also highlighted continued strength in trade-down behavior among higher-income consumers, reflecting growing demand for value-oriented retail offerings.
What Margins Have to Say About Ollie’s Bargain
Gross profit increased 16.4% to $276 million. Gross margin expanded 80 basis points to 41.9%, benefiting from lower supply-chain costs and a modest improvement in merchandise margins. The result exceeded management’s expectations as lower tariff-related costs and supply-chain efficiencies more than offset higher fuel expenses.
SG&A expenses, as a percentage of net sales, remained flat year over year at 28.6%. Effective cost controls and productivity initiatives helped offset investments in growth and customer acquisition.
Pre-opening expenses declined 3.2% to $6.4 million, primarily due to lower dark-rent expenses associated with previously acquired bankruptcy locations, partially offset by a higher number of new store openings.
Operating income climbed 23.8% to $69.6 million, while operating margin expanded 90 basis points to 10.6%. Adjusted EBITDA rose 21.8% to $87.9 million, with adjusted EBITDA margin increasing 80 basis points to 13.3%.
Ollie’s Bargain’s Financial Snapshot
Ollie’s Bargain ended the quarter with total cash and investments of $525.6 million, up 26.7% year over year. The company continued to maintain a strong balance sheet with no meaningful long-term debt, providing significant financial flexibility.
Inventory increased 12.3% year over year to $686.9 million, primarily supporting ongoing store expansion initiatives. Capital expenditures totaled $25.5 million during the quarter, with investments directed toward new store openings, existing store improvements and supply-chain infrastructure projects.
The company repurchased approximately $53.4 million of stock during the quarter, buying back 542,486 shares. Management increased its planned fiscal 2026 share repurchases to approximately $125 million from the prior expectation of $100 million, reflecting confidence in the business and cash-flow generation.
Ollie’s continued to advance key initiatives during the quarter. The company reported strong growth in its loyalty program, continued success in category productivity efforts and progress on distribution-center expansion projects in Texas and Illinois, which are expected to increase network capacity to more than 850 stores. Management also cited an improving closeout buying environment, driven by retail industry consolidation and increased availability of attractive merchandise opportunities.
What to Expect From OLLI in Fiscal 2026?
Following the first-quarter outperformance, management raised its fiscal 2026 earnings outlook while maintaining its comparable-sales and store-opening expectations.
The company now expects adjusted earnings in the range of $4.45-$4.55 per share, up from the previous outlook of $4.40-$4.50. Net sales are expected in the range of $2.98-$3.0 billion compared with the prior outlook of $2.985-$3.013 billion. Comparable-store sales growth is still anticipated to be approximately 2% for fiscal 2026.
Gross margin is now expected to be approximately 40.7%, up from the prior expectation of 40.5%. Operating income is projected between $340 million and $348 million.
Management reiterated plans to open 75 new stores during fiscal 2026. Capital expenditures are expected in the range of $103-$113 million.
While management acknowledged continued uncertainty surrounding consumer spending, fuel prices and weather-related sales volatility, it expressed confidence in the company’s ability to deliver mid-teens earnings growth through strong execution, favorable availability of closeout merchandise, disciplined cost management, and ongoing investments in value and customer acquisition.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Ollie's Bargain Outlet has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ollie's Bargain Outlet has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Ollie's Bargain Outlet belongs to the Zacks Consumer Products - Staples industry. Another stock from the same industry, BJ's Wholesale Club (BJ), has gained 0.9% over the past month. More than a month has passed since the company reported results for the quarter ended April 2026.
BJ's reported revenues of $5.66 billion in the last reported quarter, representing a year-over-year change of +9.9%. EPS of $1.10 for the same period compares with $1.14 a year ago.
BJ's is expected to post earnings of $1.15 per share for the current quarter, representing a year-over-year change of +0.9%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%.
BJ's has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).