As of December 4, Ollie’s Bargain Outlet Holdings (OLLI) was trading at a 12-month forward PE multiple of 42.5x. Meanwhile, Dollar General (DG), Dollar Tree (DLTR), and Five Below (FIVE) are trading at 12-month forward PEs of 15.8x, 15.0x, and 36.5x, respectively, as of December 4. A comparison of forward PEs can help investors make investment decisions for similar companies.
OLLI’s growth estimates
Analysts project that Ollie’s Bargain Outlets’ fiscal 2018 sales will be $1.23 billion, up 14.4%, while the company’s EPS are expected to be up 41.6% to $1.77 on an adjusted basis. Lower tax rates along with sales growth are likely to aid the bottom line in fiscal 2018. For fiscal 2019, sales are estimated to rise 16.0%, while the company’s EPS are expected to be up 16.9% to $2.07 on an adjusted basis.
Ollie’s is rapidly expanding its store footprint and increasing its brand awareness. Its competitive pricing is its major advantage. It is a closeout merchandise retailer, which means it procures goods from manufacturers at very low prices. Generally, Ollie’s buys goods from manufacturers when they are looking to offload excess inventory.
Annual growth estimates for other retailers
For Dollar General, analysts’ fiscal 2018 sales estimate stands at ~$25.6 billion, representing a 9.0% increase on a YoY basis. For fiscal 2019, sales are anticipated to grow 7.4%. The adjusted EPS are expected to grow by 32.4% to $6.05 for fiscal 2018 and 10.4% to $6.68 in fiscal 2019.
Analysts anticipate Dollar Tree sales to rise by 2.5% to $22.8 billion in fiscal 2018 and adjusted EPS are projected to grow by 12.1% to $5.45. For fiscal 2019, sales are expected to rise by 4.8% to $23.9 billion in fiscal 2019, and adjusted EPS are estimated to grow by 7.0% to $5.83.
For fiscal 2018, Five Below’s top line is expected to increase by 20.8% to $1.5 billion, and adjusted EPS are expected to grow by 44.7% to $2.59. For fiscal 2019, sales are expected to rise by 21.9% to $1.9 billion in fiscal 2019, and adjusted EPS are expected to grow by 20.5% to $3.12.