Ollie's Bargain Outlet Holdings, Inc. OLLI is set to report its fourth-quarter fiscal 2024 results on March 19 before the opening bell. The Zacks Consensus Estimate suggests that the company will achieve revenues of $672.1 million, marking a 3.6% increase compared to the same quarter last year.

The extreme-value retailer of brand-name merchandise is anticipated to deliver a decline in the bottom line. The Zacks Consensus Estimate for fourth-quarter earnings per share has remained steady at $1.20 over the past 30 days, which implies a year-over-year decrease of 2.4%.

Ollie's Bargain has a trailing four-quarter earnings surprise of 5%, on average. In the last reported quarter, this Harrisburg, PA-based company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 1.8%.

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Key Factors Driving OLLI’s Q4 Performance

Ollie's Bargain’s business operating model of “buying cheap and selling cheap,” cost-containment efforts, focus on store productivity and the expansion of the customer loyalty program, Ollie's Army, are likely to have contributed to the top-line performance. Ollie's Army continued to be a major sales driver, with membership increasing continuously. The company ended the third quarter of fiscal 2024 with 14.8 million active Ollie's Army members, accounting for more than 80% of sales. We expect comparable store sales growth of 2.8% for the final quarter.

The company’s disciplined approach to inventory management and ability to source desirable products from closeouts and overstocks ensure that stores remain well-stocked with items that meet customer demand. This adaptability enhances the in-store shopping experience, encouraging higher foot traffic and repeat visits. 

Moreover, Ollie’s ongoing store expansion strategy continues to drive incremental revenues by broadening its reach to new markets. The strategic acquisition of "99 Cents Only" stores and leases for former Big Lots locations highlight Ollie’s ability to seize growth opportunities.

While the aforementioned factors raise optimism about the outcome, margins remain an area to watch. Any deleverage in SG&A expenses due to higher marketing and advertising expenses, occupancy costs for stores and other general expenses may have a direct bearing on margins. We expect SG&A expenses to increase 3.8% year over year for the quarter under discussion. We expect the operating margin to contract 110 basis points.

What the Zacks Model Predicts About OLLI

Our proven model does not conclusively predict an earnings beat for Ollie's Bargain this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ollie's Bargain has an Earnings ESP of +0.28% but a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Five Below FIVE has an Earnings ESP of +0.50% and currently carries a Zacks Rank of 3. FIVE’s top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.38 billion, which suggests a 3.1% rise from the figure reported in the year-ago quarter.

The company is expected to register a decline in the bottom line. The consensus estimate for Five Below’s fourth-quarter earnings is pegged at $3.38 per share, down 7.4% from the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 39%, on average.

Chewy CHWY has an Earnings ESP of +15.66% and a Zacks Rank of 2 at present. CHWY’s top line is anticipated to advance year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.19 billion, which suggests a 13.1% rise from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for Chewy’s fourth-quarter earnings is pegged at 21 cents per share, up 16.7% from the year-ago quarter. CHWY has a trailing four-quarter negative earnings surprise of 30.9%, on average.

Post Holdings POST currently has an Earnings ESP of +0.50% and a Zacks Rank of 2. The company is likely to register a decrease in the bottom line when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for the quarterly earnings per share is pegged at $1.19, down 21.2% from the year-ago period.

Post Holdings’ top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.98 billion, which suggests a decrease of 0.7% from the prior-year quarter. POST has a trailing four-quarter negative earnings surprise of 22.3%, on average.

BJ's Wholesale Club BJ has an Earnings ESP of +1.13% and currently carries a Zacks Rank of 3. BJ’s top line is anticipated to decline year over year when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.18 billion, which suggests a 5.3% jump from the figure reported in the year-ago quarter. 

The company is expected to register an increase in the bottom line. The consensus estimate for BJ's Wholesale’s fourth-quarter earnings is pegged at 90 cents a share, up 5.9% from the year-ago quarter. BJ has a trailing four-quarter negative earnings surprise of 12%, on average.

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BJ's Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report

Five Below, Inc. (FIVE) : Free Stock Analysis Report

Post Holdings, Inc. (POST) : Free Stock Analysis Report

Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report

Chewy (CHWY) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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