Ollie's Bargain Outlet could be "most cushioned" retailer from border tax, analyst says

Source: Ollie’s Bargain Outlet

Shares of Ollie's Bargain Outlet climbed nearly 5 percent Wednesday after one analyst said the company was among the "most cushioned retailers" from a potential border adjustment tax, or BAT.

Even though Ollie's sells imported merchandise, the Pennsylvania-based retailer does little direct importing, instead buying most of its merchandise from U.S. sources after taxes have been paid, MKM Partners' Patrick McKeever wrote in a Wednesday note to clients.

"Ollie's significantly outperformed most retailers in the quarter with solid same-store sales growth ... even as the company cycled [through] some of the toughest comparisons," McKeever said. The firm reiterated a buy rating on the stock and upped its price to $39 from $34.

Piper Jaffray and KeyBanc Capital Markets also issued upbeat notes to investors Wednesday on Ollie's, following a strong earnings report and better-than-expected guidance out Tuesday after the bell.

Ollie's reported adjusted fourth-quarter earnings of 39 cents on sales of $283.4 million, topping Thomson Reuters consensus estimates of 35 cents on sales of $280.4 million.

For the upcoming fiscal year ended Feb. 3, 2018, Ollie's also announced it expects to open 33 to 35 new stores, with no planned closures.

At one point the stock was trading Wednesday on pace for its best day since January, when shares climbed more than 5 percent. Shares later cut back most of those gains, closing the day up a little less than half a percent and hovering around $33.

As of Wednesday's close, the stock is up more than 16 percent for the year.

Ollie's year-to-date performance 

Source: FactSet