Stocks at Ollie’s Bargain outlet Surge on Buyback and Store Expansion

Key Takeaways

• Ollie's Bargain Outlet Holdings announced a new share repurchase program and location expansion.
• The discount retailer said that it was looking for ways to take advantage recent store closings and bankruptcy cases in the retail industry.
• Ollie's reported fourth-quarter comparable store sales above estimates.

Shares in Ollie’s Bargain Outlet Holdings jumped by 10% on Wednesday, when the discount retailer expanded its footprint and announced a stock purchase.

The company announced that its board had approved a $300-million share repurchase plan, which will run until March 2029. CEO Eric van der Valk explained that Ollie's "cash generation is strong," and with no borrowings under its revolving credit facility at the end of fiscal 2024, "we have the ability to fund accelerated growth, return capital to shareholders, and pursue unique opportunities as they arise."

Ollie’s also noted the recent acquisition of 40 Big Lots stores "securing the path to our accelerated growth target of 75 stores for fiscal 2025," up from 50 last year. Van der Valk pointed out that with so many retailers shuttering locations or going bankrupt, "there are a considerable number of abandoned customers, merchandise, real estate, and talent in the marketplace." 

Ollie's Q4 Comparable Store Sales Top Estimates

Ollie’s fourth-quarter comparable sales increased 2.8% year-overyear, exceeding Visible Alpha estimates by 2.58%. Earnings per share (EPS), adjusted to $1.19, were in line with expectations. Revenue increased 2.8% at $667.1 million but fell short of expectations.

Ollie's Bargain Outlet Holdings shares are up nearly 45% over the last year.