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Ollie’s Bargain Outlet’s Fiscal Q2 Sales Expected to Rise 11.8%

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Aug. 18 2020, Updated 5:19 a.m. ET

Sales to increase

Wall Street analysts expect Ollie’s Bargain Outlet (OLLI) to report an 11.8% increase in sales to $284.6 million in the fiscal second quarter. Its new store openings remain the main growth catalyst for the company. The company plans to open 36 to 38 stores in fiscal 2018. Over the long term, it expects to operate 950 stores across the United States.

Ollie’s Bargain Outlet (OLLI) is also improving its product offerings by purchasing more merchandise at low wholesale prices. Like all closeout merchandise retailers, Ollie’s typically purchases goods from manufacturers that seek to shed excess inventory or are trying to sell inventory after implementing packaging changes. As a result, the wholesale price is reduced considerably. Shoppers often seek out these low-cost deals in favor of paying full retail prices.

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Ollie’s Army is another growth catalyst for the company. On average, these loyalty members comprise 70.0% of the company’s overall sales. Ollie’s Bargain Outlet is adding new features to its loyalty program to retain customers, including a tier system that offers additional benefits as members acquire points based on their spending levels.

A brief recap of fiscal Q1 2018

For the fiscal first quarter, Ollie’s Bargain Outlet reported sales of $275.7 million, which beat analysts’ estimates by 3.3% and reflected YoY (year-over-year) growth of 21.1%. The company’s sales were primarily driven by the new store openings, and it opened eight new stores in the fiscal first quarter.

The company’s fiscal first-quarter comps rose 1.9% against a 1.7% increase delivered in the fiscal first quarter of 2017. Its comps performance was driven by the higher average basket.

Growth estimates for peers

For the second quarter, Wall Street expects Dollar General (DG) to report sales of $6.4 million, reflecting 9.3% growth on a YoY basis. The consensus estimate for Dollar Tree’s (DLTR) sales growth stands at 4.8% to $5.5 billion for the second quarter.

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