Ollie's Bargain Outlet (OLLI) is expected to lower 2026 comparable sales guidance to nearly flat, though tariff refunds should limit the impact on profitability, while Q3 to date appears to be tracking well, raising confidence in the path back to algorithm and putting upward pressure on the multiple, RBC Capital Markets said Monday.
The company is scheduled to report Q2 results on Sept. 2.
RBC expects Q2 comparable sales to decline 1% and adjusted earnings per share of $1.17, compared with consensus estimates for a 0.7% decline and $1.13, respectively.
The brokerage believes the comparable sales declined 2% to 3% throughout May and June but rebounded to nearly flat or slightly positive in July, benefiting from more favorable weather, the extended Ollie Days event and the pull-forward of one flyer from Q3, according to the note.
RBC estimates that Ollie's is eligible to receive $25 million to $35 million in tariff refunds, the majority of which should land in Q2. After accounting for reinvestment, the brokerage expects the refunds to provide a nearly 135 basis point tailwind to Q2 gross margin, or a $0.12 tailwind to EPS, the note added.
The brokerage now models 2026 adjusted EPS of $4.34 or $4.21 excluding tariff refunds, compared with consensus of $4.44.
RBC has an outperform rating on Ollie's Bargain Outlet with a price target of $121.
Price: $74.98, Change: $-1.37, Percent Change: -1.79%