What Happened:
Shares of discount retail company Ollie’s Bargain Outlet (NASDAQ:OLLI) fell 10.8% in the pre-market session after the company reported second-quarter earnings results. Its full-year earnings guidance missed Wall Street's estimates, sending shares lower. Similarly, EPS missed during the quarter, suggesting that profitability might be pressured. On the other hand, revenue came in ahead of expectations. Regardless, this was a weaker quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Ollie's? Access our full analysis report here, it’s free.
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 6 moves greater than 5%. Moves this big are very rare for Ollie's and that is indicating to us that this news had a significant impact on the market’s perception of the business.
The biggest move we wrote about over the last year was 12 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. 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.
Ollie's is up 18.5% since the beginning of the year, but at $89.03 per share it is still trading 14.4% below its 52-week high of $103.97 from July 2024. Investors who bought $1,000 worth of Ollie's’s shares 5 years ago would now be looking at an investment worth $1,579.
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