Ollie’s Bargain Outlet Holdings, Inc., known for its knack for deals, is poised to announce its fourth-quarter fiscal 2023 results on Mar 20. Analysts anticipate a striking 18.1% surge in revenue to $649.1 million from the previous year.
The budget-friendly brand purveyor is also forecast to see a substantial increase in bottom-line performance. The consensus has pegged earnings per share at $1.16, a significant climb from last year’s 84 cents.
With a track record of beating earnings estimates, Ollie’s Bargain has an average four-quarter earnings surprise of 7%. In the previous quarter, the company outpaced analyst expectations by 13.3%.
Factors Driving the Success
Ollie’s Bargain’s strategy of “buying cheap and selling cheap” coupled with its cost-cutting endeavors, strong focus on store efficiency, and the expansion of its customer loyalty program, Ollie’s Army, likely bolstered its revenue stream.
The retailer’s emphasis on value-focused merchandise selections has positioned it well to seize market opportunities and fulfill consumer requirements effectively. Notably, Ollie’s Army has consistently been a key sales driver, with membership numbers on the rise. A 3% increase in comparable store sales is expected for the fourth quarter.
Despite these positive aspects, margins remain a crucial area for scrutiny. Potential issues could arise from any SG&A expenses deleverage due to increased selling expenses related to new store expansion, along with investments in employee wages and higher utility charges. Projections indicate a 16% rise in SG&A expenses year over year for the upcoming quarter.
Insights from Historical Analytics
The proprietary predictive model suggests a mixed outlook for Ollie’s Bargain this quarter. While traditionally a positive Earnings ESP combined with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) would indicate likelihood of surpassing earnings estimates, that scenario does not appear likely this time.
Currently holding a Zacks Rank #3 paired with an Earnings ESP of 0.00%, the company falls short of favored conditions for an earnings beat. The Zacks model refrains from providing a definitive projection under these circumstances.
Companies with Favorable Prospects
As investors consider the best options for potential earnings surprises this season, three companies stand out as per our model analysis:
lululemon athletica LULU holds an Earnings ESP of +0.45% and a Zacks Rank of 3, indicating a probable boost in bottom-line figures for the upcoming quarter. Forecasts show an EPS rise of 13.9% to $5.01 from the prior year.
The company’s revenue stream is expected to climb with estimates projecting a 15.1% year-over-year increase to $3.19 billion. LULU has demonstrated consistent earnings surprises, averaging 9.2% over the last four quarters.
General Mills GIS posts an Earnings ESP of +1.30% along with a Zacks Rank of 3, predicting an uptick in quarterly earnings, with estimates showing a 7.2% growth to $1.04 per share.
While the company anticipates a decrease in revenue by 3.4% to $4.95 billion compared to the prior year, GIS has maintained an earnings surprise average of 5.7% over the past four quarters.
Guess?, Inc. GES boasts an Earnings ESP of +4.25% and a Zacks Rank of 2. Despite an expected bottom-line decrease when it reports Q4 fiscal 2024 results, revenue projections indicate a 4.6% surge to $855.5 million.
GES has shown a solid track record of earnings surprises, averaging 43.1% over the last four quarters.
As we await the earnings report, investors can keep track of upcoming announcements through the Zacks Earnings Calendar.
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