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Dollar craters, Ollie’s briefs, but this discount retailer is climbing on profits | Investor business daily

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3 days ago

August 29, 2024

Dollar craters, Ollie's briefs, but this discount retailer is climbing on profits | Investor business daily

While Nvidia (NVDA) earnings anchor the market, store the dollar Five below (FIVE) advanced after reporting better-than-expected results. In the meantime, Ollie’s Bargain Shop (OLLI) plummeted after the Q2 reports and Dollar general (DG) rolled into a steep dive.

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Ollie’s Bargain Outlet reported early Thursday that second-quarter profit rose 16% to 78 cents per share, while revenue rose 12% to $578.4 million. Comparable sales rose 5.8%, the company reported. Ahead of the report, analysts forecast second-quarter earnings per share of 78 cents and revenue totaling $562 million. According to the consensus, sales in retail stores were also up 1.7%.

The discount retailer also revised its full-year guidance, expecting revenue of $2.276 billion to $2.291 billion, up from the previous range of $2.277 billion. The company also expects same-store sales growth of 2.7% to 3.2%, compared to the latest forecast of 1.5% to 2.3%.

Meanwhile, Five Below announced late Wednesday that second-quarter earnings fell 36% to 54 cents per share, in line with expectations. However, revenue rose 9% to $830 million, beating analyst forecasts of $823.3 million. Five Below also now expects full-year earnings of $4.35-$4.71, down from its previous forecast of 2024 earnings per share of $5.00-$5.40.

Same-store sales fell 5.7% during the quarter. Broker Craig-Hallum upgraded the shares to buy following the report.

Shares of Five Below rose 4.5% in Thursday’s premarket session. Ollie’s Bargain Outlet erased early gains to fall 6.5%. Shares of Dollar General fell more than 24% after missing earnings and revenue in the second quarter. Dollar General saw quarterly earnings decline 20% per quarter, while revenue fell 4%.

Ollie’s Bargain Outlet shares are trading at an official trading price of 104.98, a high on July 15, according to MarketSurge Chart Analysis. Five Below is trying to get above its 50-day moving average after a steep five-month decline.

Dollar General stock had also tried to regain support at the 50-day mark. Thursday’s move pointed to an undershoot of October lows, which would put shares at their lowest levels since June 2018.

Discount retailers are generally a classic defensive growth model that can do relatively well in tougher markets or amid economic uncertainty. At such times they benefit from the consumer’s trade-in.

Dollar General stock has a Composite Rating of 24 out of a possible 99. Shares also have a Relative Strength Rating of 33 and an EPS Rating of 19.

Follow Kit Norton on X @KitNorton for more coverage.