Yahoo Finance Reflecting On Discount Retailer Stocks’ Q1 Earnings: Burlington (NYSE:BURL)
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Burlington (NYSE:BURL) and the rest of the discount retailer stocks fared in Q1.
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. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and discount retailer stocks have had a rough stretch, with share prices down 10.2% on average since the previous earnings results.
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 $2.36 billion, up 10.5% year on year, in line with analysts' expectations. Overall, it was a decent quarter for the company with an impressive beat of analysts' earnings estimates.
Michael O’Sullivan, CEO, stated, “We are very pleased with how our sales trends developed in the first quarter. The quarter got off to a slow start in February, likely due to disruptive weather and delayed tax refunds, but then our sales trend picked up. Comparable store sales increased 4% during the months of March and April combined. This resulted in a 2% comparable store sales increase for the quarter which was at the high end of our guidance range.”
The stock is up 27.6% since reporting and currently trades at $255.70.
Is now the time to buy Burlington? Access our full analysis of the earnings results 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 scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 13.2% since reporting. It currently trades at $93.02.
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 posted the fastest revenue growth but had the weakest full-year guidance update in the group. As expected, the stock is down 49.8% since the results and currently trades at $66.63.
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. Zooming out, it was a weaker quarter for the company with underwhelming earnings guidance for the full year.
The stock is up 12.5% since reporting and currently trades at $109.94.
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 scored the biggest analyst estimates beat among its peers. The stock is up 5.7% since reporting and currently trades at $139.42.
Read our full, actionable report on Ross Stores here, it's free.
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