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These 3 Discount Players Are Forging Ahead of the Industry
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In the ebb and flow of economic changes, the discount industry's inherent adaptability takes center stage. In times of economic uncertainty, consumers tend to become more price-conscious, leading to increased demand for discount products and services. This adaptability positions discount stocks not just as reliable investment choices but as assets capable of thriving in evolving economic landscapes.
The flexibility inherent in discount stocks makes them a valuable component for investors seeking a stable portfolio. These stocks offer a unique opportunity to unlock hidden value, enabling investors to navigate market uncertainties and reap decent returns.
Discount stocks have shown a consistent ability to perform well even when broader market indices may experience volatility.
The industry outlook remains optimistic, fueled by a blend of consumer trends, technological innovations and strategic adaptations. The integration of advanced technologies such as data analytics and artificial intelligence empowers retailers to optimize operations, personalize customer experiences and enhance overall efficiency, ensuring a competitive edge in the market.
That said, we have highlighted three discount stocks from the Retail – Discount Stores industry, which currently carries a Zacks Industry Rank #73, placing it in the top 29% of more than 250 Zacks industries.
Past 6-Month Price Performance
Image Source: Zacks Investment Research
3 Prominent Picks
Costco Wholesale Corporation (COST - Free Report) has redefined the industry with its unique model of bulk buying and membership-based retailing. The discount retailer’s growth strategies, better price management and decent membership trends have been contributing to its performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering decent sales numbers. The company's distinctive membership business model and pricing power set it apart from traditional players. We believe a favorable product mix, steady store traffic, pricing strength and strong liquidity should benefit Costco.
Costco has a trailing four-quarter earnings surprise of 2.6%, on average. The Zacks Consensus Estimate for current fiscal year revenues implies 4.3% growth, while the same for earnings per share indicates a 7.4% increase from the corresponding year-ago reported figures. For the next fiscal year, the consensus estimate suggests a 7.1% rise in sales and 8.1% growth in earnings. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ross Stores (ROST - Free Report) stands as a testament to the prowess of off-price retailing. The store expansion strategy, combined with the company's strong brand reputation and off-price retail model, positions Ross Stores for success in the dynamic retail landscape. The company has ambitious goals, aiming to reach at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations over time. By expanding its store network, the company strengthens brand visibility, captures new customer segments and unlocks potential sales growth.
The Zacks Consensus Estimate for current fiscal year revenues implies 7.5% growth, while the same for earnings per share indicates a 22.4% increase from the corresponding year-ago reported figures. For the next fiscal year, the consensus estimate suggests a 4.7% rise in sales and 8.8% growth in earnings. Impressively, this Zacks Rank #3 company has a trailing four-quarter earnings surprise of 7.8%, on average.
Burlington Stores’ (BURL - Free Report) off-price retail model, merchandising capabilities and supply-chain optimization contribute to its competitive edge. With a resilient performance in challenging economic conditions, BURL is well-positioned for sustained success, emphasizing its ability to navigate uncertainties, capture consumer trends and drive both top-line growth and operating margin expansion. The company's decent comps run, strategic initiatives, including new store openings and relocations, and a detailed plan for operating margin expansion position it for significant future growth. The company's ambitious plan to open 500 net new stores and achieve a 10% operating margin by 2028 sets a robust foundation for sustained growth.
The Zacks Consensus Estimate for current fiscal year revenues implies 10.4% growth, while the same for earnings per share indicates a 34.5% increase from the corresponding year-ago reported figures. For the next fiscal year, the consensus estimate suggests a 10.1% rise in sales and 25.5% growth in earnings. This Zacks Rank #3 company has a trailing four-quarter earnings surprise of 9.4%, on average.
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These 3 Discount Players Are Forging Ahead of the Industry
In the ebb and flow of economic changes, the discount industry's inherent adaptability takes center stage. In times of economic uncertainty, consumers tend to become more price-conscious, leading to increased demand for discount products and services. This adaptability positions discount stocks not just as reliable investment choices but as assets capable of thriving in evolving economic landscapes.
The flexibility inherent in discount stocks makes them a valuable component for investors seeking a stable portfolio. These stocks offer a unique opportunity to unlock hidden value, enabling investors to navigate market uncertainties and reap decent returns.
Discount stocks have shown a consistent ability to perform well even when broader market indices may experience volatility.
The industry outlook remains optimistic, fueled by a blend of consumer trends, technological innovations and strategic adaptations. The integration of advanced technologies such as data analytics and artificial intelligence empowers retailers to optimize operations, personalize customer experiences and enhance overall efficiency, ensuring a competitive edge in the market.
That said, we have highlighted three discount stocks from the Retail – Discount Stores industry, which currently carries a Zacks Industry Rank #73, placing it in the top 29% of more than 250 Zacks industries.
Past 6-Month Price Performance
Image Source: Zacks Investment Research
3 Prominent Picks
Costco Wholesale Corporation (COST - Free Report) has redefined the industry with its unique model of bulk buying and membership-based retailing. The discount retailer’s growth strategies, better price management and decent membership trends have been contributing to its performance. Cumulatively, these factors have been aiding this Issaquah, WA-based company in registering decent sales numbers. The company's distinctive membership business model and pricing power set it apart from traditional players. We believe a favorable product mix, steady store traffic, pricing strength and strong liquidity should benefit Costco.
Costco has a trailing four-quarter earnings surprise of 2.6%, on average. The Zacks Consensus Estimate for current fiscal year revenues implies 4.3% growth, while the same for earnings per share indicates a 7.4% increase from the corresponding year-ago reported figures. For the next fiscal year, the consensus estimate suggests a 7.1% rise in sales and 8.1% growth in earnings. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ross Stores (ROST - Free Report) stands as a testament to the prowess of off-price retailing. The store expansion strategy, combined with the company's strong brand reputation and off-price retail model, positions Ross Stores for success in the dynamic retail landscape. The company has ambitious goals, aiming to reach at least 2,900 Ross Dress for Less and 700 dd's DISCOUNTS locations over time. By expanding its store network, the company strengthens brand visibility, captures new customer segments and unlocks potential sales growth.
The Zacks Consensus Estimate for current fiscal year revenues implies 7.5% growth, while the same for earnings per share indicates a 22.4% increase from the corresponding year-ago reported figures. For the next fiscal year, the consensus estimate suggests a 4.7% rise in sales and 8.8% growth in earnings. Impressively, this Zacks Rank #3 company has a trailing four-quarter earnings surprise of 7.8%, on average.
Burlington Stores’ (BURL - Free Report) off-price retail model, merchandising capabilities and supply-chain optimization contribute to its competitive edge. With a resilient performance in challenging economic conditions, BURL is well-positioned for sustained success, emphasizing its ability to navigate uncertainties, capture consumer trends and drive both top-line growth and operating margin expansion. The company's decent comps run, strategic initiatives, including new store openings and relocations, and a detailed plan for operating margin expansion position it for significant future growth. The company's ambitious plan to open 500 net new stores and achieve a 10% operating margin by 2028 sets a robust foundation for sustained growth.
The Zacks Consensus Estimate for current fiscal year revenues implies 10.4% growth, while the same for earnings per share indicates a 34.5% increase from the corresponding year-ago reported figures. For the next fiscal year, the consensus estimate suggests a 10.1% rise in sales and 25.5% growth in earnings. This Zacks Rank #3 company has a trailing four-quarter earnings surprise of 9.4%, on average.