OLLI Expands With 40 Big Lots Stores: Key Insights for Investors

Ollie’s Bargain Outlet Holdings, Inc. OLLI is accelerating its expansion by acquiring 40 former Big Lots store leases from Gordon Brothers. This latest move builds on Ollie’s Bargain’s previous acquisitions, bringing the total number of former Big Lots locations to 63. The deal remains subject to final bankruptcy court approval.Strategic Angle Behind OLLI’s ExpansionOllie’s Bargain stated that the newly acquired Big Lots locations align with its growth strategy. These stores are the right size, have favorable lease terms and are in areas that cater to budget-conscious shoppers, making them a valuable addition to its expanding network.To drive expansion, the company will prioritize opening these stores over previously planned locations for a smooth and efficient rollout. With this acquisition and other investments, Ollie’s Bargain plans to open around 75 stores in 2025, exceeding its typical 10% annual growth target.Ollie’s Bargain’s acquisition of former Big Lots stores signifies a strategic growth initiative within the competitive retail landscape. Currently, OLLI operates 568 stores across 31 states and aims to grow to 1,300 locations nationwide.Key Drivers of Ollie’s Bargain’s GrowthOllie’s Bargain’s business model of “buying cheap and selling cheap,” combined with cost-control efforts, store productivity focus and the expansion of Ollie’s Army rewards program, strengthens its position in the industry. These strategies support long-term growth, with management’s confidence in returning to key targets, including double-digit sales growth, a 40% gross margin and double-digit EBITDA growth.The company specializes in offering a wide range of brand-name merchandise across various categories at deep discounts. Its success depends on securing brand-name and closeout products at compelling prices. By selling goods at 20% to 70% lower prices than department stores and upscale retailers, Ollie’s Bargain attracts value-conscious consumers and maintains a competitive edge.Ollie’s Bargain’s robust supply-chain infrastructure is another significant advantage. The newly operational distribution center in Princeton, IL, which supports more than 150 stores, has enhanced the company’s ability to manage its expanding footprint. The company now can serve up to 750 stores. Investments in technology and productivity underscore OLLI’s focus on operational excellence.OLLI’s Investment AnalysisOllie’s Bargain is strategically expanding to strengthen its market presence, drive sales and enhance customer value, which should support future financial performance. However, the company faces challenges, including margin pressures from higher SG&A expenses and shifts in product mix. Given these concerns, OLLI currently carries a Zacks Rank #4 (Sell).In the past month, OLLI’s shares have lost 3.8% against the industry’s growth of 4.2%.Image Source: Zacks Investment ResearchStocks to ConsiderPost Holdings, Inc. POST operates as a consumer-packaged goods holding company in the United States and internationally. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Post Holdings’ current fiscal-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the prior-year reported levels. POST delivered a trailing four-quarter earnings surprise of 22.3%, on average.Lancaster Colony Corporation LANC engages in the manufacturing and marketing of specialty food products for the retail and food-service channels in the United States. It currently holds a Zacks Rank #2. LANC delivered a trailing four-quarter earnings surprise of 1.7%, on average.The consensus estimate for Lancaster Colony’s current financial-year sales and earnings implies growth of 3.1% and 6.1%, respectively, from the year-ago period’s reported figure.Tyson Foods, Inc. TSN operates as a food company worldwide. It currently has a Zacks Rank #2. TSN delivered a trailing four-quarter earnings surprise of 52%, on average.The Zacks Consensus Estimate for Tyson Foods’ current financial-year sales and earnings indicates growth of 0.9% and 22.6%, respectively, from the prior-year reported levels.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tyson Foods, Inc. (TSN): Free Stock Analysis Report Post Holdings, Inc. (POST): Free Stock Analysis Report Lancaster Colony Corporation (LANC): Free Stock Analysis Report Ollie's Bargain Outlet Holdings, Inc. (OLLI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks