Ollie's Bargain Outlet Holdings, Inc.’s OLLIcontinued with its impressive streak of positive earnings and sales surprise, when it reported first-quarter fiscal 2018 results. The company also sustained its decent year-over-year improvement in both the top and bottom lines, while delivering 16th straight quarter of comparable-store sales growth.
Quite apparently, better-than-expected results prompted management to lift fiscal 2018 view.Notably, the company’s impressive performance, strategic endeavors and concerted efforts to lower debt burden have helped this Zacks Rank #3 (Hold) stock to surge roughly 55% in the past six months and comfortably outperform the industrythat witnessed a of decline of 15%.
Ollie’s Bargain delivered quarterly earnings of 41 cents a share that beat the Zacks Consensus Estimate of 36 cents and surged 64% from the year-ago period. Net sales of $275.7 million also came ahead of the consensus mark of $270.3 million and rose 21.1% year over year. Comparable-store sales jumped 1.9% during the quarter under review.
Gross profit rose 21.5% to $112.9 million, while gross margin expanded 10 basis points to 40.9% buoyed by higher merchandise margin, partly offset by increase in supply chain costs as a percentage of net sales. Operating income also soared 31.6% to $36 million, while operating margin increased 110 basis points to 13.1%.
Ollie's Bargain’s business model of “buying cheap and selling cheap”, cost-containment efforts, focus on store productivity, sturdy comparable-store sales performance and expansion of customer reward program, Ollie's Army, fortify its position in the Consumer Staplesspace. These initiatives positioned the stock to augment both its top and bottom-line performance in the long run.