Looking back on discount retailer stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including TJX (NYSE: TJX) 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 0.6% below.

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

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 exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “I am extremely pleased with our second quarter performance. Our comparable store sales increase of 4%, pretax profit margin, and earnings per share all exceeded our plans.”

TJX delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 7.1% since reporting and currently trades at $121.45.

Is now the time to buy TJX? 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 EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

Burlington delivered 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 1.8% since reporting. It currently trades at $268.

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, exceeding analysts’ expectations by 1%. Still, it was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations.

Five Below delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 7.9% since the results and currently trades at $85.10.

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

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 number surpassed analysts’ expectations by 3%. Taking a step back, it was a mixed quarter as it also produced an impressive 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% since reporting and currently trades at $91.34.

Read our full, actionable report on Ollie's 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. This number beat analysts’ expectations by 0.8%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.

Ross Stores had the weakest performance against analyst estimates among its peers. The stock is down 8.2% since reporting and currently trades at $140.08.

Read our full, actionable report on Ross Stores here, it’s free.

Market Update

As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.

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.

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