Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Five Below (NASDAQ: FIVE) and its peers.
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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.7% below.
In light of this news, share prices of the companies have held steady as they are up 1.1% on average since the latest earnings results.
Best Q2: 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 $1.03 billion, up 23.7% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was an exceptional quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Winnie Park, CEO of Five Below, said, “We are excited to deliver second quarter results that exceeded our sales and earnings expectations. These results demonstrate the effectiveness of our strategy and are a testament to the hard work, dedication and tight collaboration of our teams across the company, especially in an ever-changing tariff environment. We have been maniacally focused on executing with excellence, specifically curating Wow! newness in our assortment, simplifying our pricing while maintaining extreme value, improving in-stock levels and optimizing product flow. Importantly, our results demonstrate that our customers are recognizing us as the destination for fun at great value for the KID and the KID in all of us.”
Five Below scored the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 1.6% since reporting and currently trades at $147.
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 $679.6 million, up 17.5% year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.
Ollie's pulled off the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3% since reporting. It currently trades at $126.75.
Is now the time to buy Ollie's? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: 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 $14.4 billion, up 6.9% year on year, exceeding analysts’ expectations by 1.7%. It was a satisfactory quarter as it also posted a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
Interestingly, the stock is up 1.4% since the results and currently trades at $136.55.
Read our full analysis of TJX’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 $2.71 billion, up 9.7% year on year. This result surpassed analysts’ expectations by 2.5%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
The stock is up 3.7% since reporting and currently trades at $290.68.
Read our full, actionable report on Burlington here, it’s free.
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 $5.53 billion, up 4.6% year on year. This print was in line with analysts’ expectations. Aside from that, it was a satisfactory quarter as it also logged EPS guidance for next quarter exceeding analysts’ expectations but a slight miss of analysts’ EBITDA estimates.
Ross Stores had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 1.9% since reporting and currently trades at $148.36.
Read our full, actionable report on Ross Stores here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
