Ollie's Likely Seeing March Sales Accelerate as Bankrupt Rival Big Lots Liquidations End, Truist Says

MT Newswires
03-18
ollies -Shutterstock
Ollie's Bargain Outlet (OLLI) is probably seeing a "solid" start to the current quarter as sales this month accelerate, according to Truist Securities, which expects the discount retailer to report growth for the just-ended period even as it faced headwinds from inventory liquidations in a rival chain.

Truist said Tuesday it expects Ollie's fiscal fourth-quarter comparable sales to be in line with the brokerage's 2.5% year-over-year growth forecast, despite the anticipated impact from liquidation sales of Big Lots, which filed for Chapter 11 bankruptcy last year. Ollie's is scheduled to release the results on Wednesday. The consensus among eight analysts polled by FactSet is for a 2.4% rise.

"While it's still early, our data suggests that (the first quarter) is off to a solid start, with a modest acceleration" over the past roughly two weeks, Truist Managing Director Scot Ciccarelli said in the note. That compares with "the relatively slow start we have seen for most of our other retailers," he said.

Liquidation sales at Big Lots are ending as inventory dries up and stores close, Truist said. Ollie's said last month it's acquiring another 40 former Big Lots store leases, bringing to 63 the total number taken over so far.

Big Lots closures were a hindrance to Ollie's fiscal third-quarter comparable sales and were expected to weigh on the most recent period as well, but Ciccarelli said the shutdowns are a "significant (long-term) opportunity" to increase Ollie's market share and sales.

Truist expects the closures of Big Lots and other retailers to result in a "faster-than-historical store growth" of 14% for Ollie's for 2025. Ollie's stock has dropped 8% so far in 2025, as retailers faced consumer uncertainty, winter weather and whipsaw changes in the US government, Truist said in an earlier note.

The government moves include potential for tariffs, which could offer "a material (inventory) buying opportunity" for Ollie's should they lead to reduced demand and cancelled orders, Ciccarelli said Tuesday. While the company imports about 20% of its goods, about 70% of its sales are "close-out" goods where another retailer or vendor will have already paid the tariff, according to Truist.











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