Looking back on discount retailer stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Burlington (NYSE:BURL) 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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Best Q2: 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 $2.47 billion, up 13.4% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was an exceptional quarter for the company with optimistic earnings guidance for the next quarter and an impressive beat of analysts’ EBITDA estimates.

Michael O’Sullivan, CEO, stated, “We are pleased with our results from the second quarter. Comparable store sales increased 5%, while total sales increased 13%. Both of these metrics were well ahead of our expectations.”

Burlington achieved the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 5.8% since reporting and currently trades at $257.

Is now the time to buy Burlington? Access our full analysis of the earnings results 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 $5.29 billion, up 7.1% year on year, in line with analysts’ expectations. The business had a strong quarter with a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ earnings estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 9.4% since reporting. It currently trades at $138.31.

Is now the time to buy Ross Stores? Access our full analysis of the earnings results here, it’s free.

Weakest 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 $830.1 million, up 9.4% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a solid beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.

Five Below delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 17.9% since the results and currently trades at $93.

Read our full analysis of Five Below’s results here.

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 $13.47 billion, up 5.6% year on year. This print surpassed analysts’ expectations by 1.1%. Aside from that, it was a mixed quarter as it also produced a decent beat of analysts’ EBITDA estimates but underwhelming earnings guidance for the next quarter.

TJX had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $113.24.

Read our full, actionable report on TJX 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 $578.4 million, up 12.4% year on year. This print surpassed analysts’ expectations by 3%. Taking a step back, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.

Ollie's scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 3.3% since reporting and currently trades at $91.07.

Read our full, actionable report on Ollie's here, it’s free.

Market Update

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

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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