HARRISBURG, Pa. - Ollie's Bargain Outlet Holdings, Inc. (NASDAQ: NASDAQ:OLLI), a prominent retailer of closeout merchandise, has announced its successful bid to acquire eight additional store leases previously owned by Big Lots (NYSE:BIG). This development follows a recent bankruptcy auction involving a second wave of Big Lots store closures totaling 170 locations. The transaction awaits final approval from the bankruptcy court and the fulfillment of standard closing conditions.
Including these eight new acquisitions, Ollie's has secured a total of 15 former Big Lots store leases. The company's President, Eric van der Valk, expressed satisfaction with the expansion, noting the alignment of the new stores with Ollie's in terms of store size, lease terms, customer demographics, and location within existing trade areas.
Ollie's plans to weave these new locations into its dynamic store opening program, which aims to balance productivity and pre-opening expenses. The company is on track to inaugurate 50 new stores in 2024, with two planned closures. It is also assessing the influence of the newly acquired leases on store openings and the pace for the first half of fiscal 2025.
Ollie's Bargain Outlet, recognized as America's largest retailer of closeout merchandise, operates 545 stores across 31 states. The company specializes in offering discounted brand name products across various departments, including housewares, food, and health and beauty aids.
The press release also included forward-looking statements, cautioning that actual results could differ materially from those projected due to various risks and uncertainties. These include inventory management, consumer demand, competition, store expansion success, economic conditions, supply chain issues, labor market changes, cybersecurity, lease terms, distribution center operations, online retail presence, litigation, seasonality, natural disasters, health epidemics, and regulatory changes.
Investors and stakeholders are reminded that forward-looking statements are based on current expectations and assumptions, and the company is not obligated to update these statements as new information arises. This article is based on a press release statement from Ollie's Bargain Outlet Holdings, Inc.
In other recent news, Ollie's Bargain Outlet has seen significant developments in its business strategy and financial performance. The company has successfully bid for seven store leases previously owned by the bankrupt retailer BIG, a move that aligns with Ollie's growth strategy of increasing its retail footprint. This strategic acquisition is backed by positive ratings from various analyst firms. KeyBanc has maintained an Overweight rating on Ollie's, while BofA Securities, Loop Capital, and RBC Capital Markets have all maintained Buy ratings, raising their price targets to $115, $110, and $106 respectively.
In terms of financial performance, Ollie's reported a 12% increase in net sales to $578 million in the second fiscal quarter of 2024, with a 5.8% rise in comparable store sales. This strong performance led to an upgrade in the company's sales and earnings guidance for the year. Despite management's projection of flat comparable store sales for the third fiscal quarter of 2024, Loop Capital suggests this forecast may be conservative, indicating their belief in Ollie's ability to deliver consistent sales growth.
These recent developments reflect Ollie's strategic positioning in the retail market and its potential for continued growth. As the company capitalizes on opportunities arising from the current market dynamics, investors can look forward to observing how these strategies unfold in the coming months.
InvestingPro Insights
As Ollie's Bargain Outlet Holdings, Inc. (NASDAQ: OLLI) expands its footprint with the acquisition of former Big Lots store leases, InvestingPro data provides additional context to the company's financial health and market position.
Ollie's market capitalization stands at $5.5 billion, reflecting its significant presence in the discount retail sector. The company's revenue growth of 14.15% over the last twelve months and 12.41% in the most recent quarter aligns with its aggressive expansion strategy, including the newly acquired store leases.
InvestingPro Tips highlight Ollie's financial strength, noting that "liquid assets exceed short term obligations" and the company "operates with a moderate level of debt." These factors suggest that Ollie's is well-positioned to finance its expansion plans without overextending itself financially.
Moreover, Ollie's profitability is underscored by its impressive gross profit margin of 39.96% and operating income margin of 11.46% over the last twelve months. An InvestingPro Tip indicates that Ollie's has been "profitable over the last twelve months," which bodes well for its ability to integrate and optimize the newly acquired store locations.
Investors considering Ollie's growth prospects might be interested to know that the company is "trading at a low P/E ratio relative to near-term earnings growth," according to another InvestingPro Tip. This could suggest potential upside for the stock as the company executes its expansion strategy.
For a more comprehensive analysis, InvestingPro offers additional tips and insights, with 7 more tips available for Ollie's Bargain Outlet Holdings, Inc. These additional insights could provide valuable perspective on the company's financial health and future prospects as it continues to grow its retail footprint.
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