Ollie's (OLLI): Buy, Sell, or Hold Post Q3 Earnings?

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how discount retailer stocks fared in Q3, starting with Ross Stores .

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 3.4% below.

Luckily, discount retailer stocks have performed well with share prices up 10.7% on average since the latest earnings results.

Ross Stores

Selling excess inventory or overstocked items from other retailers, Ross Stores is an off-price concept that sells apparel and other goods at prices much lower than department stores.

Ross Stores reported revenues of $5.60 billion, up 10.4% year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.

Interestingly, the stock is up 19.8% since reporting and currently trades at $192.31.

We think Ross Stores is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q3: Five Below

Often facilitating a treasure hunt shopping experience, Five Below 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 $1.04 billion, up 23.1% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Five Below achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 19.1% since reporting. It currently trades at $195.96.

Weakest Q3: Ollie's

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Ollie's reported revenues of $613.6 million, up 18.6% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ EBITDA estimates but revenue in line with analysts’ estimates.

As expected, the stock is down 1.5% since the results and currently trades at $116.97.

Read our full analysis of Ollie’s results here.

Burlington

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Burlington reported revenues of $2.71 billion, up 7.1% year on year. This number met analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

Burlington had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 9.2% since reporting and currently trades at $310.75.

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

TJX

Initially based on a strategy of buying excess inventory from manufacturers or other retailers, 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 $15.12 billion, up 7.5% year on year. This print topped analysts’ expectations by 1.5%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.

The stock is up 7.1% since reporting and currently trades at $155.85.

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

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the discount retailer stocks, including 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 3% below.

Luckily, discount retailer stocks have performed well with share prices up 10.1% on average since the latest earnings results.

TJX

Initially based on a strategy of buying excess inventory from manufacturers or other retailers, 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 $15.12 billion, up 7.5% year on year. This print exceeded analysts’ expectations by 1.5%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.

Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “I am extremely pleased with our third quarter performance and the excellent execution of our off-price business model by our teams across the Company. Sales, pretax profit margin, and earnings per share all exceeded our expectations. Overall comp sales grew 5%, with strength at every division. We believe this is a testament to our value proposition and treasure-hunt shopping experience, which continue to draw consumers to our retail banners worldwide. With our outperformance in the third quarter, we are raising our sales, pretax profit margin, and earnings per share guidance for the full year. The fourth quarter is off to a strong start, the availability of merchandise continues to be outstanding, and we are excited about the deals we are seeing in the marketplace. With our compelling values and ever-changing, fresh assortments of good, better, and best brands, we are convinced that our stores and e-commerce sites are strongly positioned as gifting destinations for value-conscious shoppers this holiday season. Going forward, we see great potential to continue capturing market share and successfully growing TJX around the globe.”

Interestingly, the stock is up 6.5% since reporting and currently trades at $155.03.

We think TJX is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q3: Five Below

Often facilitating a treasure hunt shopping experience, Five Below 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 $1.04 billion, up 23.1% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Five Below delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 20% since reporting. It currently trades at $197.41.

Weakest Q3: Ollie's

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Ollie's reported revenues of $613.6 million, up 18.6% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ EBITDA estimates but revenue in line with analysts’ estimates.

As expected, the stock is down 2.2% since the results and currently trades at $116.23.

Read our full analysis of Ollie’s results here.

Burlington

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Burlington reported revenues of $2.71 billion, up 7.1% year on year. This print met analysts’ expectations. More broadly, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

Burlington had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 6.5% since reporting and currently trades at $302.91.

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

Ross Stores

Selling excess inventory or overstocked items from other retailers, Ross Stores is an off-price concept that sells apparel and other goods at prices much lower than department stores.

Ross Stores reported revenues of $5.60 billion, up 10.4% year on year. This result beat analysts’ expectations by 2.6%. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 19.5% since reporting and currently trades at $191.84.

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

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 Five Below and the rest of the discount retailer stocks fared in Q3.

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 0.8% below.

Thankfully, share prices of the companies have been resilient as they are up 5.8% on average since the latest earnings results.

Best Q3: Five Below

Often facilitating a treasure hunt shopping experience, Five Below 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 $1.04 billion, up 23.1% year on year. This print exceeded analysts’ expectations by 6.3%. Overall, it was a stunning quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Winnie Park, CEO of Five Below, said, "We are thrilled to report third quarter results that surpassed our expectations, marking our second consecutive quarter of over $1 billion in sales and robust double-digit same-store sales growth. This outstanding performance reflects our Crew's great execution of our customer-centric strategy: delivering trend-right merchandise at exceptional value, connecting with our customers through compelling marketing campaigns, and creating amazing shopping experiences that truly resonate.”

Five Below pulled off the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 15% since reporting and currently trades at $189.25.

Ross Stores

Selling excess inventory or overstocked items from other retailers, Ross Stores is an off-price concept that sells apparel and other goods at prices much lower than department stores.

Ross Stores reported revenues of $5.60 billion, up 10.4% year on year, outperforming analysts’ expectations by 2.6%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.

The market seems happy with the results as the stock is up 12.3% since reporting. It currently trades at $180.22.

Weakest Q3: Ollie's

Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet is a discount retailer that acquires excess inventory then sells at meaningful discounts.

Ollie's reported revenues of $613.6 million, up 18.6% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ EBITDA estimates but revenue in line with analysts’ estimates.

As expected, the stock is down 5.1% since the results and currently trades at $112.75.

Read our full analysis of Ollie’s results here.

TJX

Initially based on a strategy of buying excess inventory from manufacturers or other retailers, 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 $15.12 billion, up 7.5% year on year. This result beat analysts’ expectations by 1.5%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.

The stock is up 5.6% since reporting and currently trades at $153.70.

Read our full, actionable report on TJX here, it’s free for active Edge members.

Burlington

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Burlington reported revenues of $2.71 billion, up 7.1% year on year. This number was in line with analysts’ expectations. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

Burlington had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 1.2% since reporting and currently trades at $287.94.

Read our full, actionable report on Burlington here, it’s free for active Edge members.