Yahoo Finance Discount Retailer Stocks Q1 Recap: Benchmarking Big Lots (NYSE:BIG)
Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Big Lots (NYSE:BIG) 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 6 discount retailer stocks we track reported a slower Q1; on average, revenues missed analyst consensus estimates by 0.6%. while next quarter's revenue guidance was 5% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and discount retailer stocks have had a rough stretch, with share prices down 7.6% on average since the previous earnings results.
Big Lots (NYSE:BIG)
Priding itself on carrying brand-name items, Big Lots (NYSE:BIG) is a discount retailer that acquires excess inventory and then sells at meaningful discounts to the prices of traditional retailers.
Big Lots reported revenues of $1.01 billion, down 10.2% year on year, falling short of analysts' expectations by 3%. Overall, it was a weak quarter for the company with a miss of analysts' earnings estimates.
Commenting on today's results announcement, Bruce Thorn, President and CEO of Big Lots stated, "While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items. We remain focused on managing through the current economic cycle by controlling the controllables. As we move forward, we're taking aggressive actions to drive positive comp sales growth in the latter part of the year and into 2025, and to maintain year-over-year gross margin rate improvements, all driven by progress on our five key actions."
Big Lots delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 70.7% since reporting and currently trades at $1.03.
Read our full report on Big Lots here, it's free.
Best Q1: 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 $508.8 million, up 10.8% year on year, in line with analysts' expectations. It was a solid quarter for the company with a decent beat of analysts' gross margin and earnings estimates.
Ollie's achieved the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 20.9% since reporting. It currently trades at $99.31.
Is now the time to buy Ollie's? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $811.9 million, up 11.8% year on year, falling short of analysts' expectations by 2.7%. It was a weak quarter for the company with underwhelming earnings guidance for the next quarter and revenue guidance for next quarter missing analysts' expectations.
Five Below had the fastest revenue growth but had the weakest full-year guidance update in the group. As expected, the stock is down 48% since the results and currently trades at $69.
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 $12.48 billion, up 5.9% year on year, in line with analysts' expectations. Taking a step back, it was a weaker quarter for the company with underwhelming earnings guidance for the full year.
The stock is up 16.1% since reporting and currently trades at $113.41.
Read our full, actionable report on TJX 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 $4.86 billion, up 8.1% year on year, in line with analysts' expectations. Overall, it was an ok quarter for the company with a decent beat of analysts' gross margin estimates but underwhelming earnings guidance for the next quarter.
Ross Stores pulled off the biggest analyst estimates beat among its peers. The stock is up 8.8% since reporting and currently trades at $143.50.
Read our full, actionable report on Ross Stores here, it's free.
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