Ollie’s Bargain Outlet Holdings Inc.
shares fell more than 25% in after-hours trading Wednesday, after the retailer said that earnings were damaged by rapid expansion and cut its annual forecast. Ollie’s reported second-quarter earnings of $25.3 million, or 38 cents a share, on sales of $333.9 million, up from $288.1 million the year before. After adjusting for certain tax benefits, Ollie’s reported earnings of 35 cents a share, down from 40 cents a share in the year-ago quarter. Analysts on average expected earnings of 42 cents a share on sales of $330 million. Chief Executive Mark Butler noted that Ollie’s opened twice as many stores in the quarter as it had the quarter before, including taking over 13 former Toys R Us locations. “The exceptional strength, rapid pace of openings and larger footprint of these new stores impacted comparable store sales through increased cannibalization and supply chain pressures that reduced comparable store inventory levels,” he said in Wednesday’s announcement. “Comparable store sales were also affected by headwinds from store classes with exceptionally strong first-year sales now normalizing as they entered the comparable store base.” Ollie’s slashed its prediction for same-store sales growth to a decrease of 0.5% to 1.5%, after previously guiding for growth of 1% to 2%. The retail chain now expects 2019 sales of $1.42 billion to $1.43 billion, a cut of roughly $20 million from previous guidance, and adjusted earnings of $1.95 a share to $2 a share, down from previous guidance of $2.13 to $2.17 a share. Ollie’s stock, down 6.4% in the past year to $77.77 at Wednesday’s close, declined to less than $59 in extended trading.
Go to Source