Ollie's Shares Surge Following Big Lots Store Closures

Investing.com -- Ollie's Bargain Outlet (NASDAQ:OLLI) shares rose by 3.5% in response to the market's reaction to Big Lots' decision to close all its stores and cancel the proposed sale to Nexus Capital Management. Analysts from Truist and KeyBanc identified Ollie's as the primary beneficiary of these closures, noting the company's potential to capture a portion of Big Lots' market share.

The positive sentiment is bolstered by a previous analysis, which suggests that if approximately 425 Big Lots stores located within a 5-mile radius of Ollie's locations close, and Ollie's captures just 5% of the non-furniture business of these stores, it could lead to an additional 200-250 basis points increase in comparable sales for Ollie's.

According to Truist analyst Scot Ciccarelli, this scenario now appears increasingly likely. Ciccarelli commented on the situation: "While the closures of Big Lots stores will pose some challenges for our other retailers (approximately 50 basis points for Ollie's in Q3), the permanent shutdown of these stores will leave a substantial amount of sales dollars on the table that could flow to competing retailers like Ollie's."

KeyBanc analyst Bradley Thomas views additional Big Lots store closures positively for OLLI, suggesting that the company could gain "additional market share" not only among customers but also with suppliers. Moreover, the closures may provide new real estate opportunities for Ollie's expansion.