These Retail Stores Provide 3 Views Into Inflation

Discount retail store stocks slid on Tuesday, ahead of another round of earnings reports this week. Ollie’s Bargain Outlet (OLLI) and Casey’s General Stores (CASY) announce results Wednesday morning. Costco Wholesale (COST) follows, on Thursday afternoon. Costco stock, OLLI stock and CASY stock all dipped Tuesday prior to their reports.


The next round of reports come after Five Below (FIVE), Dollar General (DG) and Big Lots (BIG) provided mixed performance updates last week.

Discount Retail Stores: OLLI Earnings

Ollie’s Bargain Outlet is expected to snap its streak of five quarters of declining earnings. For the July-ending period, Ollie’s earnings toppled 58% and revenue climbed 9%, after four quarters of declining sales.

Analysts predict Ollie’s earnings will jump 17% to 40 cents per share for its Wednesday morning report. The discount retail store chain’s revenue is seen rising 12% to $429 million.

OLLI stock slid 2% on Tuesday prior to its Wednesday report. Ollie’s shares are above levels of critical support, and starting up the right side of a four-month base pattern.

Casey’s General Stores

Casey’s General Stores has shown two quarters of decelerating earnings growth, slowing to a still healthy 28% increase in Q1, ended in July. Meanwhile, sales averaged 44% gains for the past six quarters. For the current second quarter, analysts expect the gasoline and retail store chain’s earnings growth to slow to 22%, or $3.16 per share, on a 23% increase in revenue to $4.03 billion.

But Wells Fargo analyst Anthony Bonadio thinks Casey’s is set up to beat expectations. Fuel profits should remain robust, although the upside may start to wane. But inside store sales performance should lead the way given positive consumer trends, Bonadio wrote in a research note Tuesday.

CASY stock’s relative strength line is near its highs for the year. It has an RS rating of 90 out of 99, indicating strong performance against its peers in the stock market. Shares broke out from its six-week cup base in late October. But the advance has slowed as shares lost their 21-day exponential moving average and 10-week moving average at the beginning of December.

CASY stock dipped less than 1% Tuesday, to not quite 7% off its recent high, and holding 2% above a 224 buy point following an October breakout.

Costco Stock Results

Costco Wholesale announces its fiscal first-quarter results Thursday after the market close. The wholesaler has reported positive earnings and revenue growth going all the way back to Q1 2018.

However, the company’s sales growth has slowed in recent months. Costco reported $19.17 billion in sales for November, up 5.7% year over year. That’s lower than the 7.7% increase reported in October and 10.1% growth announced in September. And e-commerce sales fell 10.1% from October to November.

Wall Street predicts the wholesaler’s earnings will climb 5% to $3.12 per share on 15% sales growth to $58.36 billion.

COST stock sank almost 2% on Tuesday prior to its Thursday results.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison


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