01:12 PM EDT, 08/29/2024 (MT Newswires) -- Ollie's Bargain Outlet (OLLI) raised its full-year guidance on Thursday as the discount retailer's fiscal second-quarter revenue exceeded Wall Street's estimates while earnings grew less than expected.

The company now expects sales of $2.28 billion to $2.29 billion this year, up from an earlier outlook in the $2.26 billion to $2.28 billion range. The average analyst estimate on Capital IQ is for revenue of $2.27 billion in the ongoing year. The comparable store sales guidance was increased to between 2.7% and 3.2% from the previous 1.5% to 2.3% range.

Ollie's raised its adjusted earnings per share target to between $3.22 and $3.30 for the fiscal year ending Feb. 1, up from a previous expectation of $3.18 to $3.28. That compares with last year's $2.91. Analysts are modeling for normalized EPS of $3.28 this year.

"Consumers are seeking value, and this is driving growth in the discount and off-price channels," Chief Executive John Swygert told analysts on a conference call, according to a Capital IQ transcript.

Big retailers are constantly updating their product offerings while large manufacturer suppliers compete for shelf space, resulting in new products and packaging, according to Swygert. This has led to "a constant availability of products and inventory across the supply chains," which is helping the closeout market, he said.

For the fiscal second quarter, adjusted earnings per share climbed to $0.78 from $0.67 year over year but missed the Street's view by a penny. Shares of Ollie's slid 5.8% in midday trade.

Revenue rose to $578.4 million for the three months ended Aug. 3 from $514.5 million the year earlier and surpassed the $561.3 million average analyst estimate on Capital IQ. Comparable store sales climbed 5.8%, ahead of the 1.7% consensus view.

Sales momentum built as the quarter progressed, according to Chief Financial Officer Robert Helm. Comparable sales growth was primarily led by higher transactions and an increased basket size, with room air, housewares, sporting goods, food and candy showing strength, he told analysts.

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