There’s been a lot of buzz this year concerning the return of the luxury retail shopper.  Despite the fact that the country is now just barely emerging from the worst recession since the 1930s, many shoppers have shed their fears and returned to high-end retailers such as Tiffany & Co. (TIF), Coach (COH) and Nordstrom (JWN). 

But while many shoppers throw caution — and cash — to the wind at these pricey stores, more frugal buyers still eschew these stores in favor of tried-and-true discounters. Two of those stores are Costco Wholesale Corp. (COST) and Dollar General Corp. (DG).

5 Reasons Why Costco Is Overvalued

Both discount retailers reported quarterly earnings results on Thursday, and judging by the numbers, both prove that bargain hunters are alive and well as we move headlong into the holiday shopping season. 

Costco reported that its quarterly profit rose on a jump in international sales, and the weakness in the value of the U.S. dollar. The company said it made a profit of $266 million, or 60 cents per share, in fiscal Q1. Those numbers represent a 1.1% increase over the $263 million the company earned in the same quarter a year ago. The figures were also in line with consensus Street estimates.

In retail, it’s all about same-store sales (sales at stores open at least a year), and this key metric was very positive for Costco, with an increase of 3% companywide, and a 13% rise among international stores. The recent increase in same-store sales (which turned positive in September) represents a turnaround for the retailer from the decline in the metric throughout the first eight months of the year.

As for Dollar General, the company’s fortunes also are looking up. The extreme discounter posted a profit of $75.6 million, or 24 cents per share, in the third quarter.  That’s a huge improvement from the loss of $7.3 million, or 2 cents per share, just one year ago. Same-store sales also saw a sharp increase, rising 9.2% in the quarter.

These two solid earnings reports, along with their respective increases in same-store sales, show that there will always be room at the inn for cost-conscious shoppers. It also shows that bargain hunting is alive and well as we finish up 2009.

The takeaway here for investors thinking about spending some of their capital on retail stocks is — don’t forget about the bargain players.

Related Articles:

• The Market Ignores Costco Results
• Is Frugal Out? Luxury Retail Stocks In
• 5 Well-Dressed Retail Stocks for 2010