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 Ross Stores (NASDAQ:ROST) and the rest of the discount retailer stocks fared in Q4.

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 mixed Q4; on average, revenues beat analyst consensus estimates by 1.2%. while next quarter's revenue guidance was 1.8% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, though 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 11.3% on average since the previous earnings results.

Best Q4: 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 $6.02 billion, up 15.5% year on year, topping analyst expectations by 3.6%. It was a very strong quarter for the company, with an impressive beat of analysts' revenue estimates, driven by huge outperformance in its same-store sales (7% growth vs estimates of 3%).

Barbara Rentler, Chief Executive Officer, commented, “We are pleased with our fourth quarter sales and earnings results that were well ahead of our expectations. Our above-plan sales were driven by customers’ positive response to our improved assortments of quality branded bargains throughout our stores.”

Ross Stores pulled off the biggest analyst estimates beat of the whole group. The stock is down 7.2% since the results and currently trades at $138.41.

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

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 $3.13 billion, up 13.9% year on year, outperforming analyst expectations by 2.4%. It was a strong quarter for the company, with optimistic earnings guidance for the full year and a solid beat of analysts' revenue estimates.

The stock is down 5.4% since the results and currently trades at $194.81.

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

Weakest Q4: 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 $1.34 billion, up 19.1% year on year, falling short of analyst expectations by 0.9%. It was a weak quarter for the company, with underwhelming earnings guidance for the full year.

Five Below scored the fastest revenue growth but had the weakest performance against analyst estimates and weakest performance against analyst estimates in the group. The stock is down 22.6% since the results and currently trades at $161.59.

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 $16.41 billion, up 13% year on year, surpassing analyst expectations by 1.4%. It was a mixed quarter for the company, with an impressive beat of analysts' gross margin estimates but underwhelming earnings guidance for the full year.

The stock is down 3.8% since the results and currently trades at $96.74.

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 $648.9 million, up 18% year on year,inline with analysts' expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations.

Ollie's pulled off the highest full-year guidance raise among its peers. The stock is down 4.5% since the results and currently trades at $72.01.

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

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