Discount retail company Ollie’s Bargain Outlet (NASDAQ: OLLI) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 16.8% year on year to $779.3 million. On the other hand, the company’s outlook for the full year was close to analysts’ estimates with revenue guided to $3.00 billion at the midpoint. Its non-GAAP profit of $1.39 per share was 1.1% below analysts’ consensus estimates.
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Ollie's (OLLI) Q4 CY2025 Highlights:
- Revenue: $779.3 million vs analyst estimates of $783.3 million (16.8% year-on-year growth, 0.5% miss)
- Adjusted EPS: $1.39 vs analyst expectations of $1.41 (1.1% miss)
- Adjusted EBITDA: $127.1 million vs analyst estimates of $125.8 million (16.3% margin, 1% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $4.45 at the midpoint, missing analyst estimates by 1.8%
- Operating Margin: 14%, in line with the same quarter last year
- Free Cash Flow Margin: 21.1%, up from 18.5% in the same quarter last year
- Locations: 645 at quarter end, up from 559 in the same quarter last year
- Same-Store Sales rose 3.6% year on year, in line with the same quarter last year
- Market Capitalization: $6.34 billion
“We had a strong fourth quarter to cap off an exceptional year,” said Eric van der Valk, President and Chief Executive Officer.
Company Overview
Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ: OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $2.65 billion in revenue over the past 12 months, Ollie's is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. On the bright side, it can grow faster because it has more white space to build new stores.
As you can see below, Ollie’s sales grew at a solid 13.2% compounded annual growth rate over the last three years as it opened new stores and increased sales at existing, established locations.
This quarter, Ollie’s revenue grew by 16.8% year on year to $779.3 million but fell short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 13.5% over the next 12 months, similar to its three-year rate. This projection is eye-popping and indicates the market is forecasting success for its products.
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Store Performance
Number of Stores
A retailer’s store count often determines how much revenue it can generate.
Ollie's sported 645 locations in the latest quarter. Over the last two years, it has opened new stores at a rapid clip by averaging 12.3% annual growth, among the fastest in the consumer retail sector. This gives it a chance to scale into a mid-sized business over time.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Same-Store Sales
The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Ollie’s demand has been healthy for a retailer over the last two years. On average, the company has grown its same-store sales by a robust 3.2% per year. This performance gives it the confidence to meaningfully expand its store base.
In the latest quarter, Ollie’s same-store sales rose 3.6% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from Ollie’s Q4 Results
It was good to see Ollie's narrowly top analysts’ gross margin expectations this quarter. We were also happy its EBITDA narrowly outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded up 2.3% to $105.34 immediately following the results.
Is Ollie's an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
