That being said, Ollie's is one of those rare regional retailers that seem to have a clear path to national expansion. Based on the midpoint of Ollie's forward adjusted earnings guidance of $1.65 to $1.69 per share, Ollie's currently trades at a forward P/E ratio of about 36 - not cheap by any means. With strong growth and many catalysts ahead, investors will have to pay up to participate in Ollie's journey ahead. So, while talks of buybacks and dividends are not yet on the table, it's not hard to envision a more palatable future for shareholders. At that time, management said, it will have a strategic discussion on how best to return capital to its investors going forward. The company said it will use savings from the new tax legislation to accelerate debt payments, and it expects to finish 2018 with no debt and about $70 million to $80 million of cash on its balance sheet. In 2017, Ollie's paid off approximately $146 million in term loan debt, ending the year with approximately $49 million of debt and $39 million in cash.

In years past, Ollie's used debt to finance expansion as it opened new stores, but the company is now generating enough cash flow to grow its store count while paying down its existing debt. Less debt, more cashĪnother thing for shareholders to be excited about is that the company has been actively paying down debt to shore up its balance sheet.

Given that Ollie's is only present in 20 states now, and some of those states are far from saturated, I find the target to be feasible. Management believes the company can ultimately grow into 950 locations, which is three and a half times as many stores the company runs now. This past year, the company opened its first location in Rhode Island, and in 2018, it expects to open its first stores in Arkansas and Louisiana. The chain currently operates locations in only 20 states. The best part about Ollie's store expansion plans is that it has such a long runway of growth left. Image source: Ollie's Bargain Outlets Holdings Inc. Ollie's management believes it can grow the company's store locations at a mid-teen percentage rate for years into the future.

Management expects to open 36 to 38 stores in 2018, with the second half of the year seeing more openings than the first half. That's a 14.5% increase in its store count over the past year, and management believes it can continue to expand in the 14% to 15% range for the foreseeable future. Ollie's finished the fourth quarter with 268 stores, up from the 234 stores it operated at the end of 2016. we make a living.' Store count on the rise Butler called toys a 'substantial portion' of the company's business and said the purpose of the ad was to take advantage of a unique opportunity and 'to remind everybody how. Just days before the earnings release, Ollie's advertised in The Wall Street Journal that it was ready and willing to buy excess toy inventory from manufacturers, distributors, and retailers affected by the closings. One opportunity Ollie's management seemed particularly excited about was the recent Toys-R-Us bankruptcy. The closeout buying environment remains as strong as I've ever seen, and I'd like where Ollie's is positioned as a growing force in one of the most dynamic retail sectors in America today. And with 274 stores, we strive to be the first call for the majority of all these available deals. We're strengthening our relationships with major manufacturers and gaining better access to merchandise. Our overall deal flow remains very strong, and we're see a growing availability of product from both existing and new vendors.

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