Ollie's Bargain Outlet (OLLI) is expected to report strong Q1 results, with comp sales rising 2% year on year versus consensus estimate of 1.4% growth, RBC Capital Markets said in a note emailed Wednesday.
RBC said it lowered its adjusted EPS estimate for the retailer to $0.74 to add "some conservatism given the rising cost environment," but this is still about 5% above the consensus estimate of $0.71.
The investment firm also said its channel checks indicate that Ollie's management will "at least" reiterate comments on a low single digit/mid single digit benefit from closed Big Lots stores.
RBC said it contacted about 60 out of the estimated 170 Ollie's stores near Big Lots locations that have been closed for more than six months, and about 76% indicated "consistently higher traffic" since, while about 40% said they "ran promotions aimed at driving customer conversion."
RBC has an outperform rating on Ollie's and a $133 price target.
Shares of the company were down 1.8% in recent trading.
Price: 114.77, Change: -2.12, Percent Change: -1.81
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