Ollie's Bargain Outlet (OLLI, Financial) shares remained stable after unveiling their Q4 (Jan) earnings results this morning, a crucial period as it traditionally generates the highest revenue for the company. The report revealed a significant EPS beat and revenues that met expectations, slightly falling short for some analysts. Notably, OLLI achieved a milestone by surpassing $2 billion in annual sales for the first time.
Looking ahead, the company provided its first glimpse into FY24, with both EPS and revenue guidance falling short of analyst projections. Additionally, OLLI set its full-year comparable sales (comps) growth target at +1-2%, a conservative figure compared to the +5.7% comps in FY23, likely due to the high base effect of the previous fiscal year.
OLLI, known as America's largest retailer of closeout merchandise and excess inventory, continues to attract consumers seeking bargains. This quarter marked OLLI's fifth consecutive EPS beat and its most significant EPS upside in the last 11 quarters. Despite a slight decrease, Q4 same-store comps grew by +3.9%, outperforming the guidance of +3% but below Q3's robust +7.0%. Notably, the company did not provide Q1 (Apr) comp guidance, deviating from its usual practice and possibly indicating a change in reporting strategy.
Another key growth driver for OLLI is new store openings. The company opened 7 new stores in Q4, a decrease from the record 23 openings in Q3, likely focusing on holiday sales execution. Importantly, OLLI announced an increase in its long-term store target to 1,300 from 1,050, ending FY23 with 512 stores. This expansion, particularly into rural/suburban areas, underscores OLLI's optimistic growth trajectory.
Despite the mixed results, including a slight revenue miss and conservative FY24 guidance, the stock's performance remained steady. The positives, such as significant EPS upside, better-than-expected comps, and an ambitious long-term store target, were balanced by the negatives. OLLI's stock has been fluctuating within the $70-83 range since mid-July 2023, and this report seems unlikely to significantly alter its course.
