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Discount Retailer Stocks Q3 Earnings: Five Below (NASDAQ:FIVE) Best of the Bunch

By: StockStory

February 14, 2025 at 04:04 AM EST

FIVE Cover Image

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the discount retailer industry, including 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 mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 0.8% below.

While some discount retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.6% since the latest earnings results.

Best Q3: 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 $843.7 million, up 14.6% year on year. This print exceeded analysts’ expectations by 5.8%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Ken Bull, Interim CEO and COO of Five Below said, “We are pleased to report third quarter results that exceeded our outlook. We delivered stronger performance across a broader group of our merchandise worlds compared to the second quarter and improved our operational execution. We were encouraged to see the positive results from the initiatives we undertook to add newness and deliver value in key categories. We opened a record 82 new stores during this period with new store performance also surpassing our expectations. Our merchant and operational teams across the organization are focused on our key priorities of product, value and store experience, and I want to thank them for their efforts in delivering these results."

Five Below scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise 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 13.1% since reporting and currently trades at $91.07.

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 $517.4 million, up 7.8% year on year, in line with analysts’ expectations. The business had a satisfactory quarter with a solid beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 9.9% since reporting. It currently trades at $107.90.

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

Weakest Q3: 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 $2.53 billion, up 10.5% year on year, falling short of analysts’ expectations by 0.9%. It was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations and a slight miss of analysts’ EBITDA estimates.

As expected, the stock is down 14.2% since the results and currently trades at $250.35.

Read our full analysis of Burlington’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 $5.07 billion, up 3% year on year. This result missed analysts’ expectations by 1.3%. More broadly, it was a mixed quarter as it also logged a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

Ross Stores had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 1.1% since reporting and currently trades at $141.43.

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 $14.06 billion, up 6% year on year. This number beat analysts’ expectations by 1%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

The stock is up 5.2% since reporting and currently trades at $125.85.

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

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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