Can I please get your opinion of Ollie's Bargain Outlets (OLLI). Thank you!
Dave
OLLI operates as a discount retailer and is now trading at 28x times' Forward P/E. In the last few years, sales growth slowed down materially compared to the previous trend before FY 2021. The balance sheet is strong, with net debt of $172M and net debt/EBITDA around 0.6x. Historically, the company had a track record of consistently opening stores while growing same-store sales at a healthy rate. Although, growth has recovered to a low double-digit range in the most recent quarter, and profitability improved, it is nowhere near to pre-FY 2021 levels of growing 20% annually. We see OLLI as a turnaround play, for a high-quality name in the space, we prefer FIVE or DOL.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in FIVE.