We recently published a list of Top 8 Discount Stores Stocks For 2025. In this article, we are going to take a look at where Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) stands against other top discount stores stocks for 2025.
When Donald Trump announced tariffs on China, Canada, and Mexico, stocks of most of the retail stores went down. The tariffs are likely to increase inflation and hurt the country’s economy if they continue for the duration of Trump’s term.
For investors, it is vital to keep an eye on companies that are either taking a hit on revenue directly through tariffs or losing popularity among consumers in the foreign countries involved. Some companies can take a financial hit better than others. Take for instance a company that makes branded clothing. Such a company can raise the prices of its products and its loyal consumers won’t mind. Now imagine a retail store that sells the same product. When consumers see a 10% rise in the price of the product, they blame the store, not the brand. It is the retail store that loses value in this case and that’s why the tariffs hurt them, even if they aren’t directly exposed to China.
We decided to take a look at 8 discount stores as investments in 2025. To come up with our list of 8 discount stores as investments in 2025, we only considered stocks with a market cap of at least $2 billion.
A team of shoppers selecting items from a wide range of brand-name merchandise in a discount store.
Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI)
Ollie’s Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) is a discount retailer of well-known brand-name products in the US. It provides electronics, clothing, garden products, housewares, health & beauty aids, and other products. The company appointed a new CEO earlier this week and he has his work cut out with the stock up over 43% in a year.
Just last month, Ollie’s Bargain Outlet (NASDAQ:OLLI) was added to JP Morgan’s Analyst Focus List. The research firm believes the retailer is at an inflection point supported by consistent same-store sales growth going forward. As a result, the market is willing to give a premium valuation to the stock.
The company continues to run on solid fundamentals with growth driven by new store openings and Big Lots real estate acquisitions. In the last few months, Ollie’s Bargain Outlet (NASDAQ:OLLI) has been able to reduce its supply chain costs and as a result, boost its gross profit margins. The improving cash position as a result is also helping the company boost its interest income.
Here’s the only thing investors need to be careful about. Mid-cap stocks like OLLI that command a premium valuation tend to fall badly on an earnings miss. If you’re planning to invest in the company, keeping some powder dry may be a good idea.
Overall, OLLI ranks 4th on our list of top discount stores stocks for 2025. While we acknowledge the potential of OLLI as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as OLLI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
