What’s driving Ollie’s Bargain Outlet Holdings Inc (NASDAQ: OLLI) stock rise

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Ollie’s Bargain Outlet Holdings Inc (NASDAQ: OLLI) stock rose over 10.9% in the pre-market session of 11th December, 2019 (as of  9:15 am GMT-5; Source: Google finance)  after the company posted better than expected results for the third quarter of FY 19 and named a new chief executive. The company has reported 28.3% increase in the adjusted net income to $26.8 million, in the third quarter of fiscal 2019 from $20.9 million, in the third quarter of fiscal 2018. Adjusted EBITDA has increased 22.5% to $42.6 million, or 13.0% of net sales, in the third quarter of fiscal 2019 compared to $34.7 million, or 12.2% of net sales, in the third quarter of fiscal 2018. The Company’s cash balance as of the end of the third quarter of fiscal 2019 has increased to $10.1 million from $0.7 million as of the end of the third quarter of fiscal 2018. Inventory as of the end of the third quarter of fiscal 2019 has risen 15.9% to $385.3 million compared with $332.3 million as of the end of the third quarter of fiscal 2018, mainly due to new store growth and timing of deal flow.

Meanwhile, the company has appointed John Swygert as the President and Chief Executive Officer and member of its board of directors, effective immediately. Mr. Swygert has been interim President and Chief Executive Officer since December 2, 2019 after the unexpected passing of the Company’s founder, Mark Butler. Swygert, Ollie’s former chief operating officer and chief financial officer, worked alongside Butler for nearly 16 years.

OLLI in the third quarter of FY 19 has reported the adjusted earnings per share of 41 cents, beating the analysts’ estimates for the adjusted earnings per share of 38 cents. The company had reported the adjusted revenue growth of 15.3 percent to $327 million in the third quarter of FY 19, beating the analysts’ estimates for revenue of $323 million.

For FY 19, the company expects total net sales to be in the range of $1.419 billion to $1.430 billion, a comparable store sales decrease in a range of 0.5% to 1.5%, a gross margin rate to be of 39.5%, operating income is expected to be in the range of $174 million to $178 million, adjusted net income is expected to be in the range of $130 million to $133 million and adjusted net income per diluted share to be in the range and capital expenditures to be in the range of $75 million to $80 million.

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