Ollie's Bargain Q4 Earnings Lag Estimates, Comps Up 2.8% Y/Y

Ollie's Bargain Outlet Holdings, Inc. OLLI posted fourth-quarter fiscal 2024 results, wherein both the top and bottom lines fell short of the Zacks Consensus Estimate. While net sales increased, earnings decreased from the year-ago period’s actuals. This Harrisburg, PA-based company witnessed an uptick in comparable store sales.OLLI’s Quarterly Performance: Key Metrics & InsightsThis extreme-value retailer of brand-name merchandise posted adjusted earnings of $1.19 per share, missing the Zacks Consensus Estimate of $1.20 by a penny and declining from $1.23 reported in the year-ago quarter.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Ollie's Bargain Outlet Holdings, Inc. Price, Consensus and EPS Surprise Ollie's Bargain Outlet Holdings, Inc. price-consensus-eps-surprise-chart | Ollie's Bargain Outlet Holdings, Inc. QuoteNet sales of $667.1 million rose 2.8% year over year, driven by new store unit growth and a comparable store sales increase, partially offset by the impact of last year’s 53rd week, which accounted for $34 million in sales. Excluding this impact, net sales increased 8.5%. However, the top line missed the consensus mark of $672 million.Comparable store sales for the company increased 2.8% in the quarter under discussion compared with a 3.9% increase registered in the prior-year period. This growth was evenly driven by increases in both transaction count and basket size. The reported figure is in line with our expectations.What Margins Have to Say About Ollie's BargainThe gross profit grew 3.3% year over year to $271.6 million during the quarter. The gross margin expanded 20 basis points to 40.7%, driven by favorable supply-chain costs. However, this was partly offset by a slight decline in merchandise margin, primarily due to shifts in the sales mix across product categories. We had anticipated 60 basis points of gross margin contraction.Selling, general and administrative expenses (SG&A) expenses shot up 8.8% to $169.8 million from the prior-year quarter’s level. As a percentage of net sales, SG&A increased 140 basis points to 25.5%. Excluding a one-time $5.5 million expense related to the modification of existing equity awards, SG&A as a percentage of net sales rose 50 basis points to 24.6%, due to higher costs associated with new store growth and the earlier timing of new store openings in fiscal 2025 compared with fiscal 2024. We anticipated SG&A expenses to remain flat this time.The operating income declined 10.2% to $87.7 million, while the operating margin contracted 180 basis points to 13.2%. This included the one-time $5.5 million expense. Excluding this one-time expense, adjusted operating income fell 4.5% to $93.2 million, while the adjusted operating margin decreased 100 basis points to 14%. We had expected 110 basis points of contraction in the operating margin.Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) declined 1.1% to $109.4 million during the quarter under review. The adjusted EBITDA margin decreased 60 basis points to 16.4%. We anticipated 100 basis points of contraction in the adjusted EBITDA margin.OLLI’s Store Expansion PlansDuring the quarter, Ollie’s Bargain opened 13 new stores bringing the total count to 559 stores in 31 states at the end of the period. This reflected an increase of 9.2% in the store count on a year-over-year basis. The company plans to open a net 75 stores in fiscal 2025.Ollie's Bargain’s Financial SnapshotOllie’s Bargain ended the quarter with cash and cash equivalents of $205.1 million. The company had no borrowings outstanding under its $100 million revolving credit facility and $85.8 million of availability under the facility as of the end of fiscal 2024. During fiscal 2024, the company incurred capital expenditures of $120.6 million. For fiscal 2025, management projected capital expenditures in the range of $83-$88 million.During the quarter under discussion, the company invested $5.7 million to repurchase 52,155 shares of its common stock. The company had $32.7 million remaining under its share repurchase program. In addition, OLLI announced a new $300 million share repurchase authorization, unanimously approved by its board of directors and effective through March 31, 2029.What to Expect From OLLI in Fiscal 2025?Management envisions fiscal 2025 net sales between $2,564 million and $2,586 million, which indicates an increase from $2,271.7 million reported in fiscal 2024. Ollie’s Bargain anticipates comparable store sales to rise in the band of 1-2% compared with the increase of 2.8% reported last fiscal year.OLLI envisions the gross margin rate to be 40% for fiscal 2025 compared with 40.3% reported in fiscal 2024. The company anticipates an operating income in the range of $283-$292 million for fiscal 2025, up from $249.5 million reported in fiscal 2024. Management envisions fiscal 2025 adjusted earnings in the range of $3.65-$3.75 per share, up from the adjusted earnings of $3.28 reported last fiscal.Shares of this Zacks Rank #4 (Sell) company have lost 8.2% in the past three months against the industry’s rise of 1.6%.Image Source: Zacks Investment ResearchStocks to ConsiderSprouts Farmers SFM, which is engaged in the retailing of fresh, natural and organic food products, 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 Sprouts Farmers’ current financial-year sales and earnings implies growth of 11.9% and 24.3%, respectively, from the year-ago reported numbers. SFM delivered a trailing four-quarter earnings surprise of 15.1%, on average.Farmer Bros. Co. FARM engages in the roasting, wholesale, equipment servicing and distribution of coffee, tea and other allied products in the United States. It currently holds a Zacks Rank #2. FARM delivered a trailing four-quarter earnings surprise of 35%, on average.The Zacks Consensus Estimate for Farmer Bros.’ current financial-year sales and earnings implies growth of 3.3% and 25%, respectively, from the year-ago period’s reported figure.Post Holdings, Inc. POST operates as a consumer-packaged goods holding company in the United States and internationally. It currently carries a Zacks Rank #2. POST delivered a trailing four-quarter earnings surprise of 22.3%, on average.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.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 Farmer Brothers Company (FARM): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report Post Holdings, Inc. (POST): 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