Ollie's Bargain Outlet's EPS Growth Duration Underappreciated: RBC Analysis

Ollie's Bargain Outlet's earnings per share growth has been "underappreciated," according to RBC. The retailer has over 541 stores in 31 states, primarily selling closeout merchandise and excess inventory from manufacturers, wholesalers, and other retailers. Its warehouse format stores feature various categories, including housewares, health and beauty aids, and electronics. RBC believes Ollie's growth story is not well understood by investors, making it an attractive investment opportunity.

Title: Ollie's Bargain Outlet: A Strong Q2 Performance and Underrated Growth Potential

Ollie's Bargain Outlet Holdings, Inc. (OLLI) reported robust financial results for the second quarter of 2025, surpassing analyst expectations. The company's earnings per share (EPS) of $0.99 exceeded the forecast of $0.92, and revenue reached $680 million, surpassing the anticipated $660.75 million. This positive performance led to a pre-market stock price increase of 6.13%, bringing the price to $138.60 [1].

The company achieved an 18% increase in net sales, reaching $680 million. This growth is attributed to Ollie's unique "closeout" business model, which capitalizes on retail bankruptcies and store closures. The company's EPS of $0.99 surpassed expectations by 7.61%, and revenue was higher than expected. Key takeaways include an 18% increase in net sales and a 5% growth in comparable store sales [1].

Ollie's Bargain Outlet opened 54 new stores in the first half of the year, quadrupling last year's number. The company raised its full-year store opening target to 85, with expectations for full-year net sales between $2.631 billion and $2.644 billion, and comparable store sales growth of 3-3.5%. The company also aims for a gross margin target of 40.3% and operating income between $292 million and $298 million [1].

RBC has noted that Ollie's growth story is underappreciated by investors. The retailer has over 541 stores in 31 states, primarily selling closeout merchandise and excess inventory from manufacturers, wholesalers, and other retailers. RBC believes that the company's growth potential is not well understood, making it an attractive investment opportunity [1].

The company's stock is currently trading above its Fair Value, with a notable 26.17% price return over the past six months. The stock is approaching its 52-week high of $141.74, indicating strong market sentiment. Analyst consensus shows strong confidence in the company's future, with price targets ranging from $105 to $159 per share [1].

Ollie's Bargain Outlet's CEO, Eric Vanderbug, emphasized the company's commitment to delivering value to consumers and highlighted the company's strategic priorities, noting that the company is delivering against its strategic priorities and driving strong consistent results [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-ollies-bargain-outlet-beats-q2-2025-expectations-93CH-4214941