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Here's Why You Should Buy Burlington Stores (BURL) Stock Now

Zacks Equity Research

Burlington Stores, Inc. BURL is worth giving a shot as its sound fundamentals and growth efforts look impressive. Further, analysts are bullish on the New Jersey-based company’s stock. Over the past 60 days, the Zacks Consensus Estimate for the company’s earnings has been revised 3% and 2.5% upward for fiscal 2019 and 2020, respectively.

Notably, shares of the Zacks Rank #1 (Strong Buy) company have gained 21% in the past six months compared with the industry’s growth of 21.3%. Notably, the sector has declined 0.1% during the same period.


That said, let’s delve into the factors that make Burlington Stores a promising bet.

What’s Driving the Stock?

Burlington Stores started business as an off-price retailer focused on coats. It has now shifted to “open to buy” off-price model. The current model is helping customers to get nationally branded, fashionable, high-quality and right-priced products.

Burlington Stores' long-term strategies include the enhancement of assortments, with the primary focus on underpenetrated categories, particularly home, beauty and gifts, to make business less weather sensitive.Also, it is gaining from the multichannel engagement strategy, which is evident from its favorable results. Moreover, the company is on track with store-expansion endeavors. It plans to open 50 net new stores and remodel 28 stores in fiscal 2019.

Burlington Stores intends to improve operating margin and lower the gap of the same compared with its peers by augmenting sales, optimizing markdowns and managing inventory.

The company has steadily increased vendor counts, made technological advancements, initiated a better marketing approach and focused on localized assortments. Backed by such well-chalked out efforts, it posted decent comparable sales, which in turn fueled its top-line performance in the second quarter of fiscal 2019. We note that comparable store sales rose 3.8% in the reported quarter, following growth of 0.1% and 1.3% in the preceding two quarters. Management expects comparable store sales growth of 2-2.5% for fiscal 2019.

Increasing comparable store sales trend has been favorably impacting the company’s top line for some time now. In this regard, revenues have outpaced the Zacks Consensus Estimates in 11 of the 14 trailing quarters. In the second quarter of fiscal 2019, the top line improved 10.5%. Management now expects 8.5-9.5% sales growth for the third quarter and 8.8-9.3% rise for fiscal 2019.

3 Other Picks You Can’t Miss Out On

Boot Barn Holdings BOOT has a long-term earnings growth rate of 15%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco COST presently has a long-term earnings growth rate of 8.5% and a Zacks Rank #2 (Buy).

Dollar General DG currently has a long-term earnings growth rate of 9.6% and a Zacks Rank #2.

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