The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how discount retailer stocks fared in Q4, starting with Five Below (NASDAQ: FIVE).
Discount retailers understand that many shoppers love a good deal, and they focus on providing excellent value to shoppers by selling general merchandise at major discounts. They can do this because of unique purchasing, procurement, and pricing strategies that involve scouring the market for trendy goods or buying excess inventory from manufacturers and other retailers. They then turn around and sell these snacks, paper towels, toys, clothes, and myriad other products at highly enticing prices. Despite the unique draw and lure of discounts, these discount retailers must also contend with the secular headwinds of online shopping and challenged retail foot traffic in places like suburban strip malls.
The 5 discount retailer stocks we track reported a slower Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.3% below.
In light of this news, share prices of the companies have held steady as they are up 1.9% on average since the latest earnings results.
Best Q4: Five Below (NASDAQ: FIVE)
Often facilitating a treasure hunt shopping experience, Five Below (NASDAQ: FIVE) is an American discount retailer that sells a variety of products from mobile phone cases to candy to sports equipment for largely $5 or less.
Five Below reported revenues of $1.39 billion, up 4% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a satisfactory quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations.
Winnie Park, CEO, said, “It has been a busy three months at Five Below. We are executing our key strategies around product, value and store experience, and doing so with a sharpened focus on our core customer – the kid and the kid in all of us. We have a unique opportunity to deliver amazing value across a curated assortment featuring consistent newness with simplified pricing. Our focus on affordability and value is not just a strategy; it’s a promise to our customers that Five Below is a place where they can find joy and excitement at WOW prices. This is the true magic of Five Below.”
Five Below scored the highest full-year guidance raise of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $75.49.
Is now the time to buy Five Below? Access our full analysis of the earnings results here, it’s free.
Ollie's (NASDAQ: OLLI)
Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ: OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.
Ollie's reported revenues of $667.1 million, up 2.8% year on year, falling short of analysts’ expectations by 1.2%. The business performed better than its peers, but it was unfortunately a mixed quarter with a solid beat of analysts’ gross margin estimates but full-year EPS guidance missing analysts’ expectations.
The market seems happy with the results as the stock is up 7% since reporting. It currently trades at $106.01.
Is now the time to buy Ollie's? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Ross Stores (NASDAQ: ROST)
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Ross Stores reported revenues of $5.91 billion, down 1.8% year on year, in line with analysts’ expectations. It was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations.
Ross Stores delivered the slowest revenue growth in the group. Interestingly, the stock is up 2.1% since the results and currently trades at $138.94.
Read our full analysis of Ross Stores’s results here.
Burlington (NYSE: BURL)
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE: BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Burlington reported revenues of $3.28 billion, up 4.8% year on year. This number topped analysts’ expectations by 0.9%. Zooming out, it was a slower quarter as it logged EPS guidance for next quarter missing analysts’ expectations.
Burlington delivered the fastest revenue growth among its peers. The stock is down 4% since reporting and currently trades at $228.
Read our full, actionable report on Burlington here, it’s free.
TJX (NYSE: TJX)
Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE: TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.
TJX reported revenues of $16.35 billion, flat year on year. This print surpassed analysts’ expectations by 1%. Aside from that, it was a slower quarter as it produced EPS guidance for next quarter missing analysts’ expectations.
TJX achieved the biggest analyst estimates beat among its peers. The stock is up 4.3% since reporting and currently trades at $127.99.
Read our full, actionable report on TJX here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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