Ah, the retail apocalypse, that grand tragedy of our time, sparked by the sprawling e-commerce behemoths, the crumbling of malls that once echoed with youthful exuberance, and the middle class shrinking like a poorly inflated balloon at a child’s birthday party. In its wake, a cadre of retailers languished, victims of changing tides—yet, amid the wreckage, bargain retailers emerged, unfurling their sails with the glee of survivors rescuing treasure from a sunken ship. Business Research Insights has even predicted that the global discount retail market could grow at an impressive compound annual growth rate (CAGR) of 10.5% from 2025 to 2033, a beacon of hope shining amid the chaos.
With raconteur flair, let’s delve into the lives of three resilient bargain retailers—TJX Companies (TJX), Costco Wholesale (COST), and Dollar Tree (DLTR)—that could be your best allies in this riveting trend of thriftiness in the impending year 2025.
1. TJX Companies
Now, let us turn our gaze toward the grand merchant of frugality, TJX Companies—the proud parent of TJ Maxx, HomeGoods, HomeSense, Marshalls, and Sierra Trading Post. This titan roams the globe, boasting over 5,000 stores and six e-commerce sites. It dazzles its patrons with prices 20% to 60% lower than those obstinate full-price retailers.
With a unique knack for acquiring the cast-offs of faltering retailers at absurdly low prices, TJX has perfected its role as a scavenger in the retail apocalypse. It thrives on the thrill of life’s never-ending ‘treasure hunt,’ replete with a constant rotation of fresh wares to entice returning shoppers like moths to an enticing flame.
From fiscal 2015 to fiscal 2025 (concluding this February, as if wrapped in a time-traveling cloak), TJX’s revenue flourished with a CAGR of 7%. Store counts swelled by a robust 50%, gross profit margins swelled from a modest 28.5% to a stately 30.6%, and earnings per share (EPS) elegantly increased at a CAGR of 3%. Analysts, those modern-day augurs, project a cheerful outlook for TJX with revenue and EPS expected to grow at CAGRs of 6% and 9%, respectively, from fiscal 2025 to 2028.
This resilience lays the groundwork for a straightforward pathway to profit from the flourishing off-price market’s expansion—it’s like taking candy from a baby, assuming that baby is a full-price retailer. The stock remains attractively priced at 28 times this year’s earnings, accompanied by the icing of a respectable forward dividend yield of 1.3%.
2. Costco Wholesale
Next, we find ourselves in the confounding realm of Costco, the Colossus of warehouse clubs. With a reputation that precedes it, this institution can afford to peddle its wares at margins slimmer than a film star’s waistline, as its profitability blooms largely from membership fees, akin to a magician pulling a rabbit from a hat—voilà!
Between its fiscal 2014 and fiscal 2024 (ending just last September, a mere heartbeat ago), Costco saw its revenue and EPS rise at CAGRs of 8% and 14%, respectively—a veritable harvest! While its number of warehouses blossomed from 663 to 891, membership cardholders surged from 76 million to a staggering 137 million. With a renewal rate of 90.5%, Costco’s fans seem more loyal than a seasoned cab driver. Analysts predict that from fiscal 2024 to fiscal 2027, Costco’s revenue and EPS should continue their upward dance, growing at CAGRs of 8% and 10%, respectively.
Even though its stock may appear pricey at 47 times next year’s earnings, that’s a small price to pay for the marvels that Costco delivers. After all, who wouldn’t want to invest in a machine that churns out bargains like a factory that never sleeps?
3. Dollar Tree
Lastly, we must not overlook Dollar Tree, the crafty second-in-command on the dollar-store hierarchy after the ever-present Dollar General. This challenger made a bold move in 2015 by acquiring Family Dollar, and thus began a thrilling adventure through the hearts of urban and suburban shoppers alike.
From fiscal 2014 to 2024 (concluding just this past February—a cycle wrapped up snugly), Dollar Tree tripled its store count, escalating from 5,367 to a staggering 16,774 as its revenue blossomed at a CAGR of 14%. However, the road to glory was paved with obstacles as Dollar Tree found itself adrift in net losses over the past two years amid Family Dollar’s underwhelming sales.
In a masterful twist worthy of any great con, Dollar Tree ended the saga of Family Dollar this year, divesting the stores to liberate cash and focus on their own illustrious banner. Consider this: with a new tiered pricing strategy that elevates prices up to $7, Dollar Tree is keen to woo a more affluent clientele, expanding its realm of influence.
The analysts, those stalwart prophets of finance, forecast a short-term revenue decline of 38% in fiscal 2025 from the sell-off, yet with an optimistic eye, they see growth returning with a CAGR of 6% thereafter. EPS is anticipated to return to the positive realm, with a promising CAGR of 13% predicted through fiscal 2027. Furthermore, at 21 times this year’s earnings, the stock still appears reasonably valued, like a diamond gleaming among mere pebbles, poised to attract a plethora of investors once the newfound focus on growth proves fruitful.
In this whirlwind of retail adventures, the stage is set for a captivating era of buying and selling—one where thrift reigns supreme and clever investors might find their fortunes dancing before them like fireflies on a warm summer night. 🌟
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2025-07-30 11:58