Discount chain Ollie's Bargain Outlet seems to have several things going for it. Its prices are low and its stores are decorated to make shopping enjoyable, with sort of an amusement theme park meets retail shopping feel. It's had a tough year though as inflation pressured profits and consumers hunkered down even on discount stores buying. But the discount retailer reported a return to growth for both sales and profits last quarter. As a result, Ollie's stock's Relative Strength (RS) Rating climbed to 73 Monday, upgraded from 69 last week.
The upwardly revised 73 RS Rating means that Ollie's stock has outperformed 73% of all stocks over the past 52 weeks. History reveals that the best-performing stocks often have an RS Rating of above 80 in the early stages of their moves. See if Ollie's Bargain Outlet can continue to rebound and clear that threshold.
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Ollie's Stock Rising As It Eyes Further Expansion
Ollie's Bargain Outlet sells buyouts, overstocks and closeouts it obtains and sells at discount prices. It has 467 stores currently and says more are on the way in 2023. The company on its website says it's the nation's largest closeout merchandise and excess inventory retailer.
Ollie's stock is trying to complete a consolidation with a 72.37 entry. See if it can break out in volume at least 40% higher than normal. Its stock slumped 17% on Dec. 7 to 46.04. Investors were looking for a bigger rebound than the 9% earnings per share growth it posted. Showing strength though, it's risen about 13% since last week, and traded Monday afternoon around 52.13.
Although its stock is rising nicely, other Ollie's key ratings are playing catch-up. It has a middling 59 Earnings Per Share Rating Rating, 56 Composite Rating and a C SMR Rating (sales+profit margins+return on equity) on an A-to-E scale with A tops.
Revenue, Earnings Return To Growth Mode
Ollie's Bargain Outlet reported 9% earnings growth last quarter to 37 cents per share. That was a pivot from the prior three quarters when it stayed profitable but reported lower year-over-year quarterly earnings. Sales also grew 9% last quarter, to $418.1 million. On Oct. 17, the company named Robert Helm its new chief financial officer, effectively immediately.
Ollie's stock earns the No. 6 rank among its peers in the Retail-Discount & Variety industry group. Dollar General and BJ's Wholesale Club are also among the group's highest-rated stocks.
