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Discount Retailer Stocks Q3 Results: Benchmarking Burlington (NYSE:BURL)

By: StockStory

February 21, 2025 at 04:03 AM EST

BURL Cover Image

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at discount retailer stocks, starting with Burlington (NYSE: BURL).

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 0.9% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.

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. This print fell short of analysts’ expectations by 0.9%. Overall, it was a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations and a slight miss of analysts’ EBITDA estimates.

Michael O’Sullivan, CEO, stated, “Our third quarter comp trend started out very strongly, but then warmer temperatures from mid-September onwards slowed our sales momentum. Cold Weather categories represent about 15% of sales in the third quarter. Excluding these categories, our comp growth in the third quarter was 4%, which is consistent with the trend that we have seen in our business since March. We are very encouraged by this underlying comp sales trend.”

The stock is down 16.5% since reporting and currently trades at $243.51.

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

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, outperforming analysts’ expectations by 5.8%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Five Below scored the biggest analyst estimates beat, fastest revenue growth, and 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 15.1% since reporting. It currently trades at $89.

Is now the time to buy Five Below? 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 $5.07 billion, up 3% year on year, falling short of analysts’ expectations by 1.3%. It was a mixed quarter as it posted a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

Ross Stores delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 3.1% since the results and currently trades at $138.59.

Read our full analysis of Ross Stores’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 $14.06 billion, up 6% year on year. This print beat analysts’ expectations by 1%. More broadly, it was a mixed quarter as it also produced an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.

The stock is up 3.7% since reporting and currently trades at $123.96.

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 $517.4 million, up 7.8% year on year. This number met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates but full-year revenue guidance meeting analysts’ expectations.

Ollie's had the weakest full-year guidance update among its peers. The stock is up 5.4% since reporting and currently trades at $103.49.

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

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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