Ollie’s Bargain Outlet Inc. (OLLI): Drought conditions continue to be a headwind, but improvement is underway

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Ollie’s Bargain Outlet Inc. (OLLI): Drought conditions continue to be a headwind, but improvement is underway

Equity Research

29 June 2026 | 5:00AM EDT

Ollie’s Bargain Outlet Inc. (OLLI): Drought conditions continue to be a

headwind, but improvement is underway

Kate McShane, CFA

+1(212)902-6740 |

kate.mcshane@gs.com

Goldman Sachs & Co. LLC

Grace Chee

+1(212)357-9730 | grace.chee@gs.com

YTD, OLLI’s stock has declined ~35% vs. the S&P500 up ~7%. While the stock has Mark Jordan, CFA

declined for several reasons (lapping a strong year of Big Lots tailwinds and exposure +1(617)772-7951mark.jordan@gs.com|

to the lower income consumer), we believe soft 2QTD trends are continuing to Goldman Sachs & Co. LLC

pressure the stock. Specifically, management noted that quarter-to-date trends are Emily+1(713)658-2632Ghosh |

running below their 2% algorithm, as stores in the South continue to underperform in emily.ghosh@gs.comGoldman Sachs & Co. LLC

seasonal categories. In this note, we analyze the impact of US drought conditions on Nishi Agarwal

Ollie’s stores. +1(332)245-7668 |

nishi.agarwal@gs.com

Goldman Sachs India SPL

Bottom line: We highlight that the US has been experiencing its most severe Dan Duggan, Ph.D.

prolonged dry spell in several decades, and ~40% of Ollie’s store base is currently +1(212)902-4726 |

dan.duggan@gs.com

undergoing severe or extreme drought conditions. We continue to reiterate our Buy Goldman Sachs & Co. LLC

on OLLI as we believe these softer trends are reflective of macro headwinds rather Jaswanthi Masada

+1(212)934-8739 |

than idiosyncratic issues (HD, LOW, TSCO (our previous note here) have experienced jaswanthi.masada@gs.com

similar seasonal impacts). As drought conditions improve, we expect Ollie’s business