What Happened?
Shares of discount retail company Ollie’s Bargain Outlet (NASDAQ: OLLI) fell 3.8% in the afternoon session after the company reported mixed third-quarter results, where an earnings beat and raised guidance were overshadowed by revenue that fell just short of expectations. Ollie's posted earnings of $0.75 per share, which topped the analyst consensus of $0.73. However, revenue for the period came in at $613.6 million, narrowly missing Wall Street's estimate of $615.3 million. Despite the slight revenue miss, the company's net sales still increased by 18.6% compared to the same period in the previous year. Furthermore, management lifted its sales and earnings outlook for the full year. The market's negative reaction suggested that investors were focused on the revenue miss, indicating that expectations were high heading into the report.
The shares closed the day at $113.99, down 4% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Ollie's? Access our full analysis report here.
What Is The Market Telling Us
Ollie’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 18 days ago when the stock gained 3% on the news that comments from a key Federal Reserve official boosted investor optimism for a potential interest rate cut. New York Federal Reserve President John Williams, a voting member of the rate-setting committee, suggested he sees room for "further policy easing," which sent a strong signal to the markets. Following his remarks, the probability of a December rate cut, as measured by the CME FedWatch Tool, surged from 39% to 71%. Lower interest rates can stimulate the economy by making borrowing cheaper for both consumers and businesses, which often translates to increased consumer spending. This prospect is outweighing recent reports of lower consumer confidence, as investors bet that a more accommodative Fed policy will support retailers through the holiday season.
Ollie's is up 5.3% since the beginning of the year, but at $114 per share, it is still trading 19% below its 52-week high of $140.80 from August 2025. Investors who bought $1,000 worth of Ollie’s shares 5 years ago would now be looking at an investment worth $1,442.
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