Ollie’s Bargain Outlet’s EPS Performance


Jun. 13 2018, Updated 10:32 a.m. ET

Bottom-line numbers are impressive

For the first fiscal quarter of 2018, Ollie’s Bargain Outlet Holdings (OLLI) generated adjusted EPS of $0.41, which was 10.8% better than the analyst estimate. First-quarter adjusted EPS were up 64% on a YoY or year-over-year basis. On a reported basis, EPS (inclusive of stock-based compensation) was $0.46, up 58.6%. Higher sales and a reduction in income tax expenses led to impressive bottom-line numbers.

Driven by strong first-quarter results, management upped its earnings expectations for the current fiscal year. Fiscal 2018 adjusted net income is estimated around $112.0 million to $114.0 million, compared with the prior guidance of $109.0 million to $112.0 million.

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The adjusted EPS range was bumped up to $1.69 to $1.72. Earlier, Ollie’s has expected to report adjusted EPS of $1.65 to $1.69. Driven by recently enacted tax reforms, the effective tax rate is expected to be 26%. The benefits from lower tax rates should be deployed toward investments in associates.

Cash position

As of May 5, the company’s cash and cash equivalents stood at $27.6 million, down 18.1% on a YoY basis. Long-term debt was $13.9 million, significantly lowered from $121.9 million. Ollie’s Bargain Outlet generated cash flow from operations of $15.3 million.

The company’s inventory was up 11.9%, mainly due to new store openings. Ollie’s opened eight new stores in the first quarter. Capex stood at $4.7 million for the first quarter. For fiscal 2018, capex is projected to be $23.0 million to $25.0 million.

Peer performance

Five Below’s (FIVE) adjusted EPS was $0.35, which was better than analysts’ estimate of $0.32. On a reported basis, EPS was $0.39, representing over twofold growth year-over-year. Higher revenue, an improved SG&A expense rate, and a lower tax rate led to strong bottom-line numbers.

For the first quarter of 2018, Big Lots (BIG) reported adjusted EPS of $0.95—much lower than the $1.19 projected by analysts. Lower sales and escalating expenses marred its bottom-line performance.


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