Ollie's (OLLI) Stock Trades Up, Here Is Why

Petr Huřťák /
2024/06/05 12:03 pm EDT

What Happened:

Shares of discount retail company Ollie’s Bargain Outlet (NASDAQ:OLLI) jumped 9.6% in the morning session after the company reported a "beat and raise" quarter. First quarter earnings results beat analysts' EPS expectations on slightly higher same-store sales. It is also encouraging that the company raised its full year revenue and EPS outlook, even if the latter just came in-line with expectations. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic.

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What is the market telling us:

Ollie's's shares are not very volatile than the market average and over the last year have had only 2 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 9 months ago, when the stock gained 10.5% on the news that the company reported second quarter results that exceeded analysts' revenue and EPS expectations. The company also broadly raised its full year outlook for sales, profits, and EPS again after raising the outlook less than three months ago when reporting the previous quarter. Management sounded bullish, saying "We feel very good about the current trends and momentum of our business." Overall, it was a strong quarter for the company. 

Lastly, with discount retailers like Dollar General and Five below reporting weaker results, Ollie's strength is especially impressive.

Ollie's is up 20.8% since the beginning of the year. Investors who bought $1,000 worth of Ollie's's shares 5 years ago would now be looking at an investment worth $941.17.

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