With cost-conscious shoppers hunting for bargains in these inflationary times, Ollie's Bargain Outlet is on tap to report earnings on Sept. 1 before the open. OLLI stock has also earned a spot on IBD Leaderboard.
Fellow discounter retailers Dollar Tree and Dollar General release their quarterly numbers on Thursday.
Meanwhile, BJ's Wholesale Club has already reported, posting accelerating earnings and sales growth on Aug. 18. BJ stock jumped into a buy zone on the news, although it has given back some ground.
After finding support at its 10-week moving average, OLLI stock is also in buy range while forming a handle that would offer a new buy point.
Ollie's, BJ's, Dollar General and Dollar Tree all hail from the discount retailers industry, which ranks a solid No. 24 among the 197 industry groups IBD tracks.
BJ's stock leads its peers with the highest-possible 99 Composite Rating. As it continues to work on its turnaround from last year's slump, OLLI stock earns an 80 Composite Rating, meaning it's outpacing 80% of all stocks in terms of key stock-picking traits. DLTR sports a 93 rating, while DG stock scores an 80.
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Ollie's Bargain Outlet Crowns America's Biggest Cheapskate
Founded in 1982, Ollie's Bargain Outlet is America's largest retailer of closeouts and excess inventory. With headquarters in Harrisburg, Pa., the retailer offers "real brands at real bargain prices." Ollie's carries merchandise in food, books, housewares, toys, electronics, domestics, clothing, furniture, health and beauty, flooring, seasonal items and more.
This month, the bargain retailer opened the 450th of its "semi-lovely" stores. Currently operating bargain outlets in 29 states, the company plans to open 50-55 locations annually with an ultimate goal of 1,050 stores.
As part of its 40th anniversary celebration, Ollie's crowned America's biggest cheapskate. Along with the coveted title, the winner took home a $4,040 cash prize. The contest coincided with National Bargain Hunting Week.
Turnaround Retailer Stocks Up Future Estimates
After four quarters of earnings and sales declines, Ollie's Bargain Outlet has the look for a turnaround candidate within the retail industry.
Analysts expect earnings for its current fiscal year 2023 to fall 20%. But growth is expected to rebound in fiscal 2024, up 48% to $2.79 a share. Ollie's posted $3.16 in profits per share in fiscal 2021 ended in January that same year.
While the company did not join BJ's, Dollar General and Dollar Tree on the latest list of new buys by the best mutual funds, Ollie's has shown signs of institutional demand.
OLLI stock sports an A- Accumulation/Distribution Rating and a 1.2 up/down volume ratio. Plus, 31 funds with an A+ rating from IBD have reported holding the stock.
OLLI Stock In Buy Zone As Handle Forms
Ollie's Bargain Outlet is back in buy zone as it finds support at the 10-week line. The relative strength line has backed off its highs, but the RS line has started to tick upward.
Chart patterns can have multiple interpretations. Ollie's can now also be seen as forming a cup with handle showing a 68.08 buy point. Viewed this way, OLLI stock is in the fourth day of the handle, which takes at least five days to form.
Note that Ollie's 50-day line has been trending higher and the stock has found support at its 21-day line.
Also keep in mind that it's always risky to buy any stock just before it reports earnings. See how Ollie's Bargain Outlet reports — and how Wall Street reacts — on Sept. 1.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
