Let’s dig into the relative performance of Ollie's (NASDAQ:OLLI) and its peers as we unravel the now-completed Q2 discount retailer earnings season.

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.

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 exceeded analysts’ expectations by 3%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.

“Today, more than ever, everyone loves a bargain, and we are pleased that our great deal flow, disciplined expense control, and the strong execution of our teams led to better than expected sales and earnings for the second quarter. The process improvements and investments we have made in our people, supply chain, stores, and marketing continue to pay off in the form of better productivity, consistent execution, and strong financial performance,” said John Swygert, Chief Executive Officer.

Ollie's achieved the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 5.8% since reporting and currently trades at $91.07.

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

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, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with optimistic earnings guidance for the next quarter and an impressive beat of analysts’ EBITDA estimates.

Burlington scored the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 5.8% since reporting. It currently trades at $257.

Is now the time to buy Burlington? 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.

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. This result met analysts’ expectations. It was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ earnings estimates.

Ross Stores had the weakest performance against analyst estimates among its peers. The stock is down 9.4% since reporting and currently trades at $138.31.

Read our full, actionable report on Ross Stores 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 $13.47 billion, up 5.6% year on year. This result topped analysts’ expectations by 1.1%. Zooming out, 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.

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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