Discount retailer Ollie's Bargain Outlet topped expectations for second-quarter earnings early Thursday. OLLI stock swung higher during trade. Elsewhere, Dollar General tumbled after missing estimates.
Ollie's Bargain Outlet earnings growth accelerated for the fourth consecutive quarter, tripling to 67 cents per share. Net sales jumped 13.7% to $514.5 million. Analysts polled by FactSet expected earnings of 61 cents per share on $499 million in revenue.
Comparable store sales rose 7.9% for the quarter. Gross profit spiked 37% to $196.7 million. The company's gross margin improved by 650 basis points to 38.2%, driven by favorable supply chain costs and higher merchandise margins.
Inventory ticked up 0.8% to $498.3 million for the quarter.
Ollie's Bargain Outlet Longs To Unleash The Inner 'Cheapskate' In Us All
Ollie's notched up its guidance following results. The discount chain now sees full-year net sales between $2.076 billion and $2.091 billion, a slight upgrade from its previous outlook of $2.052 to $2.067 billion. Ollie's expects adjusted earnings between $2.65 to $2.74 per share. It previously guided earnings between $2.56 to $2.65 per share. The company significantly boosted its expectations for comparable sales growth to 4% to 4.5%, vs. the prior expectations of 2% to 2.8% growth.
OLLI Stock
OLLI stock surged 2.9% Thursday, even as Dollar General and Five Below took heavy losses. Shares are extended following a July 12 breakout from a cup-with-handle base.
OLLI stock rallied nearly 65% this year through Thursday's close and is approaching its 2023 high of 77.58 from Aug. 15.
DG stock plummeted more than 12% to a new 2023 low Thursday after Dollar General missed earnings and slashed its guidance.
Dollar General earnings tumbled 28.5% to $2.13 per share on 3.9% revenue growth to $9.8 billion. Analysts expected earnings of $2.47 per share on $9.93 billion in sales.
The company cited slowing traffic, softer sales trends and an increase in inventory shrink and markdowns in its results. It expects those trends to continue for the second half of its fiscal year. Dollar General also noted a $170 million hit to operating profit in 2H of 2023 based on inventory reduction efforts and strategic investments.
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