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Burlington Stores (BURL) Sturdy Comps Run to Propel Top Line

Zacks Equity Research

In an era of ever-evolving retail landscape, Burlington Stores, Inc. BURL has made multiple changes to its business model to adapt and stay relevant. The company has steadily increased vendor counts, made technological advancements, initiated better marketing approach and focused on localized assortments. All these endeavors have helped the company to post decent comparable sales, and in turn drive the top line.

We note that comparable store sales rose 2.7% during third-quarter fiscal 2019 compared with increase of 4.4% in the year-ago period and 3.8% in the preceding quarter. This was the 27th successive quarter of comparable store sales growth. For the fourth quarter, management had earlier projected an increase of 2-3% in comparable store sales.

Again, in the last reported quarter net sales advanced 8.6%. The company also guided net sales improvement of 9-10% for the final quarter. Moreover, the Zacks Consensus Estimate for the fourth quarter for the top and bottom line indicates year-over-year improvement of 10.1% and 12.4%, respectively.


Burlington Stores, which started business as a coat-focused off-price retailer, is focusing on “open to buy” off-price model. The current model is helping customers to get nationally branded, fashionable, high quality and rightly priced products.

The company is now focusing on underpenetrated categories, particularly home, beauty and gifts, in order to make business less weather sensitive. In fact, the company is reaping the benefits of its multichannel engagement strategy, which is evident from its favorable results. Moreover, it is gradually expanding its store fleet. The company intends to improve operating margin and lower the gap of the same compared to peers by augmenting sales, optimizing markdowns and effectively managing inventory.

This Zacks Rank #3 (Hold) stock has surged 25.6% in the past six months, outperforming the industry’s rally of 13.2%. Additionally, the stock has a long-term earnings growth rate of 15.7% and the VGM Score of A increases its odd of success.

3 Hot Picks

Target TGT has a trailing four-quarter positive earnings surprise of 8.6%, on average. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Costco COST has a trailing four-quarter positive earnings surprise of 7.8%, on average. The stock carries a Zacks Rank #2.

Ross Stores ROST, which carries a Zacks Rank #2, has a long-term earnings growth rate of 10.5%.

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