Ollie's Bargain Outlet Holdings, Inc. (OLLI): A Bull Case Theory

We came across a bullish thesis on Ollie’s Bargain Outlet Holdings, Inc. on TQI capital (Typical quality investor)’s Substack by TQI capital. In this article, we will summarize the bulls’ thesis on OLLI. Ollie’s Bargain Outlet Holdings, Inc.'s share was trading at $107.26 as of January 29th. OLLI’s trailing and forward P/E were 29.71 and 23.81 respectively according to Yahoo Finance.

Ollie's Bargain Outlet Holdings, Inc. operates as a retailer of closeout merchandise and excess inventory in the United States. OLLI delivered a strong Q3 FY25, executing a deliberate strategy focused on customer acquisition and long-term loyalty rather than near-term optics. Management leaned into aggressive pricing, particularly in consumables and seasonal categories, driving traffic, membership growth, and evidence that the company’s operational flywheel remains intact. Net sales rose 19% YoY to $614 million, with comparable store sales up 3.3% driven by mid-single-digit transaction growth.

Adjusted EPS of $0.75 beat expectations, up 29% YoY, and adjusted EBITDA increased 22% to $73 million, while gross margins remained resilient at 41.3% despite the price investments. Store growth accelerated, with 32 new locations opened this quarter, ending at 645 stores, and more than 85% of new stores outperforming plan, including “warm box” sites from Big Lots closures, supporting durable comps in years 2–4. Management plans continued expansion with at least 75 new stores in FY26, implying ~11.6% unit growth, while maintaining 3% same-store sales growth, positioning the company for ~15% top-line growth with high visibility.

Ollie’s Army loyalty program continues to strengthen the moat, with new memberships up 30% YoY, particularly among younger and higher-income customers, who shop more frequently, spend more, and stick longer. Digital marketing efficiency improved, reducing costs while boosting targeted reach. The balance sheet remains strong, with $432 million in cash, minimal debt, and ample share repurchase capacity, enabling continued strategic sourcing in the closeout market.

Overall, Ollie’s is scaling from a position of strength, gaining better deals, better stores, and more control over its product mix, ensuring long-term compounding growth. Near-term multiples may look full, but execution quality and structural advantages support a compelling long-term investment case.

Previously we covered a bullish thesis on Target Corporation (TGT) by LongYield in May 2025, which highlighted the company’s digital momentum, cost control, and long-term strategy amid near-term retail challenges. The stock has appreciated approximately 9.06% since coverage. The thesis still stands as Target maintains a foundation for recovery. TQI capital shares a similar bullish view but emphasizes Ollie’s focus on pricing, traffic, and customer acquisition for long-term growth.

Ollie’s Bargain Outlet Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held OLLI at the end of the third quarter which was 32 in the previous quarter. While we acknowledge the potential of OLLI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.