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The Market Has Ollie’s Bargain Outlet Completely Wrong
Authored by Thomas Hughes. Article Posted: 6/5/2026.
Key Points
- Ollie's Bargain Outlet trades at roughly 17.5 times earnings, a discount to off-price peers like TJX and Ross Stores, which trade at 27 to 30 times earnings.
- Q1 adjusted EPS rose 21% to 91 cents, beating estimates by 4 cents, while margins expanded across all levels and full-year EPS guidance was raised to $4.50 at the midpoint.
- Ollie's increased its share-buyback program by 25% to $125 million and is converting acquired Big Lots locations from rent-only expense into revenue-producing stores.
- Special Report: Elon’s “Hidden” Company
The market has Ollie’s Bargain Outlet (NASDAQ: OLLI) completely wrong, pricing it like a dollar store instead of a closeout retailer, which is what it really is. Closeout retailers rely on end-of-season, surplus, and excess inventory from major retailers and manufacturers, buying it at deep discounts and passing those savings on to shoppers.
Dollar stores, by contrast, offer a low-price variety of everyday items they keep in stock. They are convenience-driven, low-price retailers. The distinctions come down to margins, pricing power, and, ultimately, what they carry — and those differences matter.
Before SpaceX goes public, watch this tiny supplier closely (Ad)
When the railroads launched in the 1860s, Andrew Carnegie didn't profit by riding the trains - he got rich owning the steel rails they ran on. The same dynamic may be playing out today around the anticipated $1.75 trillion SpaceX IPO.
Analyst Michael Robinson has identified a tiny, under-the-radar supplier - just 1/60th the size of SpaceX - that he believes sits at the center of Elon Musk's broader AI infrastructure buildout. Once SpaceX goes public this June, Robinson argues Wall Street will inevitably spotlight this overlooked vendor.
Watch Robinson's presentation and see the details before the IPO window closesOff-price retailers like Ollie’s are strong in 2026, supported by healthy consumers and ample supply, which is driving robust cash flow and capital returns. Dollar stores are also performing well, but they trade at a deep discount compared with their off-price peers, and that is the opportunity today.
Ollie’s Has Value to Unlock: Catalysts in Play
Trading at approximately 17.5X its current-year earnings forecast, Ollie’s is richly valued relative to dollar stores such as Dollar Tree (NASDAQ: DLTR) and Dollar General (NYSE: DG), which trade at 14X and 16X, respectively. The opportunity is a price-multiple expansion toward off-price retail levels, with companies such as TJX Companies (NASDAQ: TJX), Ross Stores (NASDAQ: ROST), and Burlington Stores (BURL) trading at 27X to 30X earnings.
Beyond steady organic growth, strong cash flow, and rising capital returns, the key driver here is Ollie’s converting empty, cost-only store space into stores that actually generate sales. The backstory: when Ollie’s acquired former Big Lots locations out of bankruptcy, it took on the leases before it could open the stores — meaning it was paying rent on dark, unused space, known as “dark rent.” As management remodels and opens those locations, that dead-rent expense turns into revenue-producing retail. The takeaway is that Ollie’s has a path to accelerated revenue growth and margin expansion, as reflected in the Q1 release and guidance update, which could serve as a catalyst for bullish market activity.
Ollie’s Bargain Outlet Has Strong Quarter, Widens Margin
Ollie’s Bargain Outlet had a strong, if mixed, quarter in Q1. The mixed part came from the comparison to consensus estimates: revenue fell a hair short of the $700.85 million the market expected, but the miss was small and offset by other strengths. The main offset was 14.2% revenue growth, an acceleration from the prior year, supported by a 1.7% comp-store gain and a 15.1% increase in store count. Ollie’s now operates 672 stores in 35 states and has ample room to grow. Another critical detail is the loyalty membership base, which grew by 12.6%.
Margin news was the strongest part of the report. The company widened margins across all levels, gaining 80 basis points (bps) in gross margin, 70 bps in adjusted EBITDA margin, and 30 bps in net income margin, driving accelerated earnings growth. Adjusted earnings per share (EPS) grew by 21% to 91 cents, outpacing consensus by 4 cents.
Guidance is mixed as well, but still bullish for investors. The company trimmed its revenue target to about 12.5% year-over-year growth, in line with the consensus estimate, while raising its earnings outlook. It now forecasts a wider-than-expected margin and adjusted EPS of $4.50 at the midpoint, a nickel above forecasts.
Ollie’s Accelerates Buyback in 2026
Perhaps the most important news from the report is the accelerated share buyback. Executives showed strong confidence in future results by increasing their share-repurchase plans by 25%. The new target is $125 million in shares, or about 2.6% of the market cap with shares trading at early-June lows, and activity may be accelerated again in upcoming quarters. As it stands, Q1 activity led to a 1% year-over-year reduction in the average share count, providing significant leverage for investors.
Ollie’s balance sheet shows no red flags. The Q1 details reflect both the aggressive buyback and the impact of investments and the conversion of dark rent. Highlights include a 26% increase in cash and investments, higher current and total assets, and higher equity, despite corresponding increases in liabilities and capital returns. Looking ahead, Ollie’s is on track to continue improving margins as it converts the dark space and will likely maintain its fortress balance sheet while reducing the share count.
Analysts Cap Gains in Early 2026, Robust Gains Still Possible
Analysts responded to Ollie’s Q1 release with downgrades and price-target reductions despite the underlying strengths. The concern is slowing comp-store sales, but even so, the data points to optimism and enough upside to remain interesting. Trading near $80, OLLI is more than 10% below the lowest analyst target, while the consensus reported by MarketBeat forecasts 65% upside. That upside may not be unlocked this summer, but it remains a viable target, and institutional data suggest the group thinks the same. Institutions own virtually 100% of OLLI stock and have been accumulating on balance for eight consecutive quarters.
Kohl's Stock Soars After Better-Than-Feared Quarter
Authored by Jennifer Ryan Woods. Article Posted: 6/2/2026.
Key Points
- Kohl's reported better-than-expected first-quarter earnings and revenue and delivered its strongest comparable sales performance in more than four years, sending shares sharply higher.
- Despite the encouraging results, Kohl's still reported a quarterly loss and a decline in sales, highlighting that the retailer's turnaround remains a work in progress.
- Wall Street remains cautious on the stock, and recent analyst actions have been mixed, including a Citigroup upgrade to Buy following the earnings report.
- Special Report: Elon’s “Hidden” Company
Kohl's Corp. (NYSE: KSS) delivered first-quarter results last week that were better than Wall Street had feared. Although sales still declined and Kohl's posted a loss for the quarter, the retailer delivered its best comparable sales performance in more than four years and topped analyst expectations for both earnings and revenue.
The report sent shares soaring, fueling optimism that the retailer's multiyear turnaround effort may finally be gaining traction.
Q1 Results Top Expectations Despite Sales Decline
Before SpaceX goes public, watch this tiny supplier closely (Ad)
When the railroads launched in the 1860s, Andrew Carnegie didn't profit by riding the trains - he got rich owning the steel rails they ran on. The same dynamic may be playing out today around the anticipated $1.75 trillion SpaceX IPO.
Analyst Michael Robinson has identified a tiny, under-the-radar supplier - just 1/60th the size of SpaceX - that he believes sits at the center of Elon Musk's broader AI infrastructure buildout. Once SpaceX goes public this June, Robinson argues Wall Street will inevitably spotlight this overlooked vendor.
Watch Robinson's presentation and see the details before the IPO window closesFor the quarter, Kohl's reported a loss of 13 cents per share, matching its year-ago loss and coming in ahead of Wall Street's expectation for an 18-cent-per-share loss.
Revenue of $3.17 billion declined 1.7% from the prior year but exceeded analyst estimates by nearly $177 million. Comparable sales (comps) fell 1.1% year over year.
The company said the decline in sales was driven primarily by fewer in-store transactions.
Within the business, Kohl's proprietary brands were a bright spot, with comps rising 6%. Four lines of business posted flat to slightly positive comp growth, including women's, kids, accessories, and home. Men's and footwear were weaker and underperformed the company overall.
The company also strengthened its balance sheet during the quarter, improving its net cash position by more than $800 million and reducing inventory by approximately 8%.
Kohl's Reaffirms Full-Year Outlook
Kohl's reaffirmed its full-year outlook, continuing to expect comps to range from down 2% to flat compared with 2025. The company also maintained its forecast for an operating margin of 2.8% to 3.4% and earnings per diluted share of $1 to $1.60.
On the earnings call, Chief Executive Officer Michael Bender highlighted the company's encouraging early results, saying, "The progressive improvements from the prior quarter exemplify our ability to execute with agility and make necessary adjustments in our business."
He added, "Moving forward, we remain realistic about the important work ahead of us, but the early results in Q1 give us increased confidence in our ability to execute against our key initiatives."
The company's turnaround strategy has centered on three primary initiatives: delivering a more curated and balanced assortment, reestablishing Kohl's as a leader in value and quality, and enhancing its omnichannel platform to create a more seamless shopping experience.
Positive Surprise Sparks Sharp Rally
Investors applauded the Q1 report, sending shares above $16 during the session before closing at $15.64, up more than 20% for the day.
The rally was a welcome boost for a stock that has been steadily falling since reaching a 52-week high above $25 in December. Even after the post-earnings surge, the stock remains down roughly 22% year to date.
However, shares have staged a major recovery from the 52-week intraday low below $8, hit on June 2, 2025. At the current price of around $15.88, the stock is up more than 95% since then.
The bumpy performance of Kohl's stock is nothing new. The retailer has spent years struggling with declining traffic, intense competition from off-price retailers, and changing consumer preferences, all against a challenging macroeconomic backdrop. As a result, shares have lost more than 70% of their value over the past five years.
Wall Street Remains Skeptical Despite the Rally
While the latest quarter provided some encouraging signs, Wall Street remains cautious on Kohl's. The stock carries a Reduce consensus rating. Among analysts covering the company, six rate the stock a Sell, eight rate it Hold, and just two recommend buying shares.
Following the earnings report, analyst reactions were mixed. One analyst lowered its price target to $14 from $15, while another modestly increased its target to $9 from $8. This week, Citigroup upgraded Kohl's to Buy from Neutral.
The average price target of $14.92 is below the current share price, suggesting analysts see downside from current levels. Price targets range from a low of $8 to a high of $22.
Short Sellers Still Have Doubts
Investors have continued to take a bearish stance on Kohl's, with roughly 25.8 million shares, or 23.3% of the float sold short as of May 15. However, that declined from more than 30.5 million shares, or 27.5% of the float, at the end of March.
From a valuation standpoint, Kohl's may appear more attractive at current levels. The stock trades at about 6X earnings, a discount to the retail industry's average price-to-earnings ratio of roughly 11.6. It also trades below some of its department store peers. Dillards Inc. (NYSE: DDS), which reported better-than-expected earnings in May, trades at about 14X earnings, while Macy's Inc. (NYSE: M), which is scheduled to report earnings on Wednesday, trades at roughly 9X earnings.
While Kohl's turnaround remains a work in progress, the latest quarter delivered a positive surprise, suggesting the company's efforts may be starting to pay off. Going forward, investors will be looking for continued improvement in comparable sales and proof that management's strategy can produce sustainable results.
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