Ollie's Bargain Outlet Holdings' (OLLI) April transaction data could indicate how the company will face against "tough" fiscal Q2 comparable sales, RBC Capital Markets said in a Wednesday note.
RBC said soft transaction data in March weighed on the company's stock, with a significant deceleration from February, potentially indicating that it is "heading into the toughest compare of the year in 2Q." Trends in April will show if the weakness in March was structural or more related to factors like weather or timing, the brokerage added.
According to RBC, certain investors believe the market is over-reacting to the March data. This investor group flagged that about 20% of Ollie's sales are in cash transactions, potentially yielding a "less reliable historical correlation" between transaction data and comparable sales, the investment firm said.
RBC has an outperform rating on Ollie's Bargain Outlet Holdings, with a $155 price target.
Price: 91.45, Change: -0.59, Percent Change: -0.64
Comments