Ollie‘s Bargain Outlet Holdings: Downgrade to Neutral On 2Q Miss & 2H Cut

研报英文原文证据摘录

Ollie‘s Bargain Outlet Holdings: Downgrade to Neutral On 2Q Miss & 2H Cut

-down in 3Q (vs. 1H comps) the past 2 years

tied to “lull” period within 3Q comp results given the shoulder season & lack of seasonal

catalyst (vs. 1H & 4Q), which would point to negative mid-single-digits SSS in 3Q26.

• Said differently – 1H26 same-store-sales growth underlying (excluding any lift from

increased promotional activity) would be -2% by our estimates, with the downside

risk to 3Q following historical precedent of -270bps of underperformance (vs. 1H)

pointing to potential for a -5% comp decline (vs. Street +1.9%).

#3: Lowering Our FY27 EPS -10% Below Consensus: Into FY27, we are lowering our

EPS to $4.61 (10% below Street $5.11) based on same-store-sales growth of Flat (below

Street +2.0%), a 40.3% gross margin rate (below Street 40.7%), 20bps of SG&A deleverage

on our Flat comp forecast (2% comp leverage point), equating to +7.3% EBIT dollar growth

(< +8.9% revenue growth) and +8.5% EPS growth supported by share repurchases.

Notably,we see incrementalpotential downside risk to our Flat same-store-sales growth

assumption in FY27, which stands more/less consistent with our FY26 +0.2% forecast,

despite FY26 uniquely aided by elevated markdown reinvestment and tailwinds to start

this year associated with furniture, squish dumplings/trend-items as well as the US

consumer’s wallet benefit tied to tax refunds up roughly 20% YOY. Said differently, our

Flat FY27 same-store-sales growth forecast implies roughly ~500bps sequential

improvement relative to “underlying” ex-markdown 2Q current run-rate comps by our

estimates. On margins, we are modeling FY27 gross margins of 40.3%, ~Flat YOY relative

FY26E gross margin rate and below Street 40.7% as our model reflects flow-through of