Ollie's Expands Supply With New Distribution Hub

Ollie's Bargain Outlet Holdings, Inc. OLLI has taken a significant step forward in its nationwide expansion with the grand opening of its fourth distribution center in Princeton, IL. The new 615,000-square-foot distribution hub is not just a milestone in Ollie's growth strategy, but a crucial hub that will drive the company's expansion in the Midwest and support its push westward.

Strategically designed to improve efficiency, the Princeton distribution center will initially serve around 60 stores across nine states. As Ollie's continues to grow, this center's reach will extend, ultimately supporting more than 150 stores. The distribution facility, built with an investment of more than $75 million, will not only streamline operations but also bring substantial economic benefits to the local community.

This new distribution center is anticipated to create more than 200 full-time jobs, greatly benefiting the local economy.

As Ollie's currently operates 525 stores across 31 states with a dedicated team of over 12,000 employees, the company has set its sights on an ambitious goal to open more than 1,300 stores nationwide. The new Princeton distribution center will play a pivotal role in achieving this expansion, serving as a cornerstone of Ollie's future growth and continued success. This investment in the Illinois distribution center highlights the company's dedication to providing outstanding value to its customers and fostering economic growth in the areas served.

What's More for OLLI?

Ollie's has achieved a notable 10.4% CAGR in its store network, growing from 345 stores in fiscal 2019 to 512 in fiscal 2023. The company opened 45 and 40 stores in the past two fiscal years, respectively, and aims to open 50 new stores in fiscal 2024. Its real estate strategy emphasizes flexibility, targeting second-generation sites of 25,000-35,000 square feet with an average initial investment of $1 million.

Furthermore, Ollie's success story revolves around the business model of ‘buying cheap and selling cheap,' along with its cost-containment strategies, focus on store productivity and the expansion of its customer reward program, Ollie's Army. The customer loyalty program, Ollie's Army, significantly enhances Ollie's competitive edge by increasing customer retention and enticing new shoppers.

This Zacks Rank #2 (Buy) company's shares have increased 32% in the past three months compared with the industry's growth of 6%.

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Other Stocks to Consider

Here, we have highlighted three other top-ranked food stocks, namely, The Chef's Warehouse CHEF, Pilgrim's Pride PPC and Vital Farms VITL.

The Chef's Warehouse, which engages in the distribution of specialty food products, currently sports a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 33.7%, on average.

The Zacks Consensus Estimate for The Chef's Warehouse's current fiscal year sales and earnings indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported numbers.

Pilgrim's Pride, which produces, processes, markets and distributes fresh, frozen and value-added chicken and pork products, currently sports a Zacks Rank #1. PPC delivered a positive earnings surprise of 27.3% in the trailing four quarters, on average.

The Zacks Consensus Estimate for Pilgrim's Pride's current financial-year earnings indicates growth of 183.43%, respectively, from the prior-year reported level.

Vital Farms offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2. VITL has a trailing four-quarter average earnings surprise of 82.5%.

The Zacks Consensus Estimate for Vital Farms' current financial-year sales and earnings indicates growth of 26.3% and 88.1%, respectively, from the prior-year reported level.

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