NEW YORK (CNN/Money) - The glut of unsold goods that has hurt sales and profits at the nation's big retailers this year appears to be a blessing for at least one class of merchants -- the nation's liquidators.

Industry watchers say that until there is solid evidence of a pickup in the economy, along with improvement in the job markets, consumers will keep hunting for bargains.

In fact, many more Americans are trying to stretch their dollars further, and turning more often not just to traditional discounters like Wal-Mart and Target, but to "deep discounters," according to industry consultant George Whalin.

For the growing crop of hard-core discount shoppers, it's liquidation stores such as Big Lots (BLI: Research, Estimates), Ross Stores (ROST: Research, Estimates) and Odd Job Stores (ODDJ: Research, Estimates) that yield the best deals.

June sales at stores open at least a year -- a key measure known as same-store sales -- rose 5 percent for Columbus, Ohio-based Big Lots, beating the 2.7 percent growth forecast that analysts had set for the No. 1 closeout retailer.

Newark, Calif.-based Ross Stores, which sells name-brand clothing at discount prices, posted a 2 percent decline in June sales but expects a pickup of 1 to 3 percent in July.

Meanwhile, investors have warmed up to these companies. Big Lots shares are up 61 percent this year, while Ross shares are up 37 percent from their 52-week low hit last August.

"Liquidators are certainly taking advantage of the problem of excess inventory," said Whalin. "Retailers are being careful to keep just enough inventory in stores in case demand comes back, although most don't think that will happen this year."

These companies -- also called closeout stores -- get their pick of clothing, toys, electronics and furniture leftovers from manufacturers, retail chains, department stores and other sources.

Analysts say liquidators buy them at anywhere between 30 percent and 50 percent of their wholesale price, then sell the goods at less than the retail cost to pocket a nifty profit.

"A weak economy and bad weather have resulted in a lot of seasonal inventory, particularly of apparel," said Todd Kuhrt, analyst with FTN Midwest Research.

"Closeout stores always benefit from unsold goods. But the recent runup in their sales and stock price indicates that companies and investors are anticipating better buying opportunities for them at lower prices from their sellers, and improving gross margins."

Al Bell, vice chairman of Big Lots, says the tough economy has been good to liquidators, noting his company launched a national advertising campaign last April -- its first ever -- for all of its 1,400 stores.

"Any change in the economic conditions creates opportunities," said Bell. "When companies go bankrupt we benefit. When grocery store Fleming went bankrupt, we bought a lot of their merchandise."

"When Kmart closed some of its stores, manufacturers that supply to them still had to meet their sales numbers. They approached us," Bell added. "Anytime a company struggles, it creates excitement for us."

Big Lots last year took in total sales of $3.8 billion, up 11.4 percent from the previous year.

David Mann, analyst with Johnson Rice, has a "hold" rating on Big Lots and a "buy" rating on Ross Stores. Rice said he's more bullish on Ross because he thinks the overcapacity in apparel inventory looks particularly beneficial to that chain.

"Ross Stores is expanding, growing its square footage in stores by double digits, or 12 percent for this year," said Rice. The company buys goods during a season and sells them two quarters later. It's also showing strong expansion in California and the Sun Belt, or states in the south such as Texas and Florida.

Ross Stores, with more than 500 outlets, logged $3.5 billion in sales for its fiscal 2003, up 20 percent from a year earlier. The retailer could not be reached for comment.

Added Mann, "Big Lots is still in the midst of improving performance of its existing stores, while Ross is showing strength."

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Looking at stock valuations, Mann thinks Big Lots looks a bit expensive with a price-to-earnings ratio of 21.6 based on forecasts for the current fiscal year, compared with a P/E of 15.6 for Ross Stores. The S&P 500, an indication of the broader market, is trading at 19.2 times 2003 estimates.

Not everybody, however, has made it to this party.

Said Lee Backus, analyst with Buckingham Research Group, "Excess inventory is there now, but will it be there in the future? Manufacturers are more careful with their stock management and retailers are offering more promotions to clear the stock. So the closeout chains have to keep adjusting their prices to maintain a price differential. That may hurt their [profit] margins."

And at Odd Job, management is looking to new owners to help boost business. Sales at the South Plainfield, N.J.-based chain fell 3.3 percent in June, and last year sales slumped 21 percent from 2001.

Odd Job said Thursday that Amazing Savings, a Delaware-based operator of upscale closeout retail outlets, acquired nearly all of Odd Job's outstanding common stock.

"In time we hope customers will be able to detect a noticeable difference in the merchandise in our stores," said Jeffrey Parker, co-chief executive officer of Odd Job Stores.  

--Analysts quoted in this story do not own the companies' stocks and their firms do not have an investment banking relationship with the companies mentioned.