Ollie's Bargain Outlet (OLLI) saw its stock price plummet 5.70% in pre-market trading on Tuesday, despite reporting better-than-expected first-quarter earnings and raising its fiscal 2025 sales outlook. The sharp decline comes as investors seem to be looking beyond the positive headline numbers.

The discount retailer reported fiscal Q1 adjusted earnings of $0.75 per diluted share, surpassing analysts' expectations of $0.71. Revenue for the quarter ended May 3 came in at $576.8 million, also beating the FactSet consensus estimate of $566.2 million. Same-store sales showed a solid increase of 2.6%, driven primarily by an increase in transactions.

While Ollie's raised its fiscal 2025 sales guidance to a range of $2.58 billion to $2.60 billion, up from the previous forecast of $2.56 billion to $2.59 billion, the company maintained its adjusted earnings outlook at $3.65 to $3.75 per diluted share. This decision to keep earnings guidance unchanged despite the sales increase may be contributing to investor concerns about potential margin pressures or increased costs.

The market's negative reaction to seemingly positive news suggests that investors may have been expecting even stronger results or guidance, or they might be focusing on other aspects of the company's performance not immediately apparent in the headline figures. As consumers continue to seek out value in the current economic environment, Ollie's positioning as a discount retailer could be both an opportunity and a challenge, depending on how well the company manages its costs and inventory in the face of changing consumer behavior.