Ollie's Bargain Outlet recently raised its full-year guidance, signaling a positive outlook propelled by surpassing Wall Street's expectations in revenue during the fiscal second quarter, despite earnings growth coming in slightly below projections. With a robust strategy focused on value, the discount retailer is making significant strides in a competitive landscape. The company now anticipates sales to reach between $2.28 billion and $2.29 billion this year, an increase from its previous forecast, which anticipated sales in the range of $2.26 billion to $2.28 billion.
The average analyst estimate reported on Capital IQ stands at $2.27 billion for the ongoing fiscal year. Furthermore, the comparable store sales guidance has been upgraded to a range between 2.7% and 3.2%, enhancing the earlier projections of 1.5% to 2.3%. In terms of adjusted earnings per share, Ollie's has elevated its target to between $3.22 and $3.30 for the fiscal year concluding on February 1, up from the previous estimates of $3.18 to $3.28.
This marks a significant increase from last year's earnings of $2.91. Analysts have conformed to expectations with a modeled normalized EPS of $3.28 for this year. Chief Executive John Swygert articulated during a conference call that the rising consumer demand for value has catalyzed growth within the discount and off-price segments.
"Consumers are seeking value, and this is driving growth in the discount and off-price channels," stated Swygert, as noted in a Capital IQ transcript. Furthermore, major retailers are consistently refreshing their product selections while large manufacturer suppliers vie for prominent shelf space, leading to innovative products and packaging.
Swygert emphasized the importance of maintaining a steady inventory flow, which has facilitated a vibrant closeout market. He remarked, "a constant availability of products and inventory across the supply chains," underlines the robustness of their approach. In the fiscal second quarter, Ollie's recorded adjusted earnings per share climbing to $0.78, a rise from $0.67 year over year; however, this figure fell short of Wall Street estimates by a marginal penny.
Consequently, shares of Ollie's experienced a downturn, slipping 5.8% in midday trading as investors reacted to the earnings report. Revenue for the three-month period ending on August 3 increased to $578.4 million, up from $514.5 million during the same timeframe the previous year, notably exceeding the average analyst estimation of $561.3 million as reported on Capital IQ.
Moreover, comparable store sales demonstrated a 5.8% growth, significantly better than the 1.7% consensus prediction. Sales momentum accelerated throughout the quarter, as detailed by Chief Financial Officer Robert Helm, who pointed out that comparable sales growth was chiefly driven by an uptick in customer transactions and increased basket size.
Key categories such as room air, housewares, sporting goods, along with food and confectionery products exhibited strong performance, reinforcing Ollie's strategic positioning in the market. Price: 88.74, Change: -5.35, Percent Change: -5.69.