What Happened?
Shares of discount retail company Ollie’s Bargain Outlet (NASDAQ: OLLI) jumped 11.7% in the morning session after the company reported strong fourth-quarter 2024 results: What grabbed our attention was the full year 2025 sales forecast, which came in line with analysts' expectations but actually represented an acceleration in growth at 13.4%(vs 8.5% in FY2024). Backing the growth guidance were plans to open 75 new store openings in 2025, an increase from 50 in 2024.
On the other hand, its full-year EPS guidance missed and its revenue fell slightly short of Wall Street's estimates. But with markets more focused on the future, the stock was rewarded given the improved growth forecast.
Separately, the company announced its focus on returning value to shareholders by increasing its share repurchase plan by an additional $300 million. As a reminder, a stock buyback reduces the amount of outstanding shares, ensuring that more profits accrue to existing shareholders.
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What The Market Is Telling Us
Ollie’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Ollie's and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 13.1% on the news that the company delivered impressive third-quarter 2024 results, surpassing analysts' expectations for operating profit and exceeding Wall Street's gross margin estimates. Revenue was in line, and the company reconfirmed its full-year revenue guidance. These results highlighted Ollie's progress as it continued to grow its market share by opening new stores. Overall, this was a strong quarter for the company.
Ollie's is up 0.6% since the beginning of the year, but at $108.91 per share, it is still trading 9.1% below its 52-week high of $119.80 from December 2024. Investors who bought $1,000 worth of Ollie’s shares 5 years ago would now be looking at an investment worth $2,861.
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