Ollie's Bargain Outlet Stock Slips After Jefferies Downgrade: Retail’s Cautious

Shares of closeout store Ollie’s Bargain Outlet Holdings Inc. ($Olli) fell more than 2% on Tuesday after the company received a downgrade from Jefferies with retail investors turning cautious.

Jefferies downgraded Ollie's Bargain Outlet to ‘Hold’ from ‘Buy’ with a price target of $111, reduced from $125, Fly.com reported. The firm warned that growth cycles of the past 22 years indicate inventories exceeding sales growth tend to lead to a decline in gross margins and stock returns. That observation resulted in the downgrade for Ollie's. 

According to the report, a "storm is brewing" in the U.S. consumer discretionary sector as industry inventories are rising for the first time in two years and about to exceed sales growth.

Sentiment on Stocktwits was neutral compared to a week ago.

On Monday, Olli also announced the appointment of Eric van der Valk to president & CEO.

Van der Valk has also been added to the company’s board, which now has a total of 10 directors. John Swygert was named executive chairman of the board. These transitions complete its leadership succession plan announced in June 2024.

"Today’s appointments are the culmination of years of work on succession planning by the board. During Eric’s time at Ollie’s, he has led foundational changes that have not only driven execution and results but also positioned Ollie’s for sustainable long-term growth. His closeout, deep discount, merchandising and operational experience make him the ideal candidate to succeed John as president & CEO,” Rich Zannino, its lead independent director, said.

Ollie’s Bargain Outlet operates 562 stores in 31 states. Ollie’s Bargain stock is down 3.8% year-to-date.

For updates and corrections, email newsroom[at]stocktwits[dot]com.