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Ollie's Bargain Outlet (OLLI) is heading lower today after reporting its Q3 (Oct) results this morning. The company narrowly beat EPS expectations, while revenue was just in line, though it increased 18.6% yr/yr to $613.6 mln, its strongest growth in over four years. Additionally, the company raised its full year guidance for EPS, revenue and comps to $3.81-3.87, $2.648-2.655 bln, and +3.2-3.5%, respectively.

• Comps came in at +3.3% (+2.6% in Q1; +5.0% in Q2), driven by a mid-single-digit increase in transactions, partially offset by lower average ticket as OLLI leaned into sharp closeout deals and value-focused consumables.
• Strength was led by food, seasonal, hardware, stationery, and lawn and garden, as consumers continue to prioritize necessities, seek value, and buy closer to need. It noted customers are still responding well to expanded seasonal and gift assortments.
• Specifically, younger and higher income shoppers were the fastest-growing cohorts in Q3, a trend management ties to its shift toward digital marketing, consumers seeking value, and customers trading down.
• Growth continues to be fueled by accelerated new store openings (32 in Q3 and 86 YTD), and ongoing expansion of the Ollie's Army loyalty program, where new sign-ups increased 30% yr/yr.
• Looking ahead, OLLI said comp trends since early October have been strong, and it feels good about its momentum into the heart of the holiday season, which is typically its largest quarter.

Briefing.com Analyst Insight

Despite the strong quarterly report from OLLI, shares are heading lower. The standouts this quarter were solid comps and clear benefits from its growth initiatives in new stores and digital, and management was upbeat about the holiday season, noting healthy comp trends through October and continued momentum. The stock's weakness likely reflects elevated expectations, especially with other value retailers like FIVE (comp+14.3%), DLTR (+4.2%), and DG (+2.5%) posting strong Q3 results, while OLLI's comps softened from Q2, its Q4 comp guide of +2-3% shows limited acceleration, and revenue only came in line. That said, the report fits the broader theme that consumers continue to prioritize value, and OLLI still seems well positioned to capture that trend as it heads into the heart of the holiday season.