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Investing.com – Ollie’s Bargain stock (NASDAQ:OLLI) fell 20% in Friday’s trading as supply chain issues took a toll on the discount retailer’s third-quarter sales and profits, both falling short of expectations.
The discount retailer blamed shipping delays of imported seasonal and other products and subsequent backlogs in its distribution centers for the 7.5% fall in in net sales to around $383.5 million in the quarter ended October 30. Comparable stores sales fell around 15%, the erosion being partially offset by addition of new stores. Gross margins also fell due to increased supply chain costs, the result of higher import and trucking costs and, to a lesser extent, higher wage rates in the distribution centers.
Fatter wages and higher selling expenses associated with 41 net additional stores fueled the rise in selling, general and administrative expenses.
With less than two months to go for the end of the company’s financial year, the company restored giving annual guidance, a practice it had dropped during the pandemic.
Total net sales for the year are seen between $1.76 billion and $1.77 billion, with comparable store sales likely to rise 3.5% to 4%.
Adjusted profit per share was 34 cents, just over half of 65 cents in the third quarter of last year.
