Ollie’s Stock (OLLI): Why The Price Substantially Dropped Today

By Amit Chowdhry ● Dec 3, 2021
  • The stock price of Ollie’s Bargain Outlet Holdings Inc (NASDAQ: OLLI) fell by over 20% pre-market today. This is why it happened.

The stock price of Ollie’s Bargain Outlet Holdings Inc (NASDAQ: OLLI) fell by over 20% pre-market today. Investors are responding negatively to the company’s third-quarter fiscal 2021 financial results.

Q3 Highlights:

— Total net sales decreased 7.5% to $383.5 million.

— Comparable store sales decreased 15.5% from the prior year increase of 15.3%. 

— Comparable store sales decreased 1.3% compared with the third quarter of fiscal 2019.

— The company opened 18 new stores, ending the quarter with 426 stores in 29 states, a year-over-year increase in store count of 10.6%.

— Operating income decreased 47.7% to $30.2 million and operating margin decreased 600 basis points to 7.9%.

— Adjusted operating income decreased 48.3% to $29.9 million and adjusted operating margin(1) decreased 610 basis points to 7.8%.

— Net income was $23.2 million, or $0.36 per diluted share, as compared with net income of $45.2 million, or $0.68 per diluted share, in the prior year.

— Adjusted net income was $22.0 million, or $0.34 per diluted share, as compared with prior year adjusted net income of $43.2 million, or $0.65 per diluted share.

— Adjusted EBITDA decreased 41.9% to $37.9 million and adjusted EBITDA margin(1) decreased 590 basis points to 9.9%.

Fiscal 2021 Outlook

The company expects the following results for the full-year fiscal 2021:

— Total net sales of $1.762 billion to $1.772 billion;

— Comparable store sales increasing 3.5% to 4.0% as compared to fiscal 2019;

— A gross margin rate of approximately 38.6% to 38.8%, and

— Adjusted net income of $150 million to $153 million and adjusted net income per diluted share of $2.30 to $2.35, both of which exclude excess tax benefits related to stock-based compensation and an after-tax gain from an insurance settlement.

“Our third-quarter performance was impacted by greater than anticipated supply chain related headwinds, leading to lower than expected results. While we believe that many of the factors impacting us are transitory in nature and we are taking proactive steps to navigate these challenges, these pressures have continued to impact our business in the fourth quarter. Despite the near-term challenges, longer term, we remain bullish on the growth opportunities that lie ahead for several reasons. First, we are seeing incredible deals being presented to us each and every day and we expect to continue to capitalize on market disruptions, including order cancellations and abandoned goods associated with import shipping delays. Second, we have made meaningful progress in driving improved efficiencies and increased throughput across our distribution centers. Third, we continue to deliver extreme value to our customers, which is particularly important in inflationary times.”

“As we look past 2021, we are confident that we will continue to grow well into the future with the significant white space in front of us and deliver strong growth in both our top and bottom lines as we have for almost 40 years,” Mr. Swygert continued. “Reflecting confidence in our business, we are pleased to announce that our Board of Directors has authorized an additional $200 million share repurchase program.”

— John Swygert, President and Chief Executive Officer

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.