Ollie's Bargain Outlet Shares Rise

Shares of Ollie's Bargain Outlet (NASDAQ:OLLI) climbed 3.5% following Big Lots (NYSE:BIG)' decision to close all stores and cancel its proposed sale to Nexus Capital Management.

Analysts from Truist and KeyBanc identified Ollie's as a primary beneficiary of these closures, highlighting the potential for the company to capture a portion of Big Lots' market share.

Positive sentiment around Ollie's is supported by previous analysis showing that if approximately 425 Big Lots stores with direct overlap (within 5 miles of an Ollie's location) were to close, capturing just 5% of that store's non-furniture business could lead to 200-250 basis points in comparable sales gains for Ollie's.

This scenario is increasingly likely, according to Truist analyst Scot Ciccarelli, who commented, "While Big Lots store closures have created some headwinds for some of our other retailers (~50bps for Ollie’s in 3Q), the permanent closure of these stores will orphan a lot of sales dollars that can flow to competitive retailers, especially Ollie’s.”

KeyBanc analyst Bradley Thomas also views the additional store closures as favorable for Ollie's, suggesting that the company stands to gain "incremental market share" with customers and suppliers. Additionally, the closures may present new real estate opportunities for Ollie's expansion.

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