Back to top

Image: Bigstock

Burlington Stores Up 57% in a Year: What's Driving the Rally?

Read MoreHide Full Article

In an era of competitive retail landscape, Burlington Stores, Inc. (BURL - Free Report) has made multiple changes to its business model to keep up with changes in the industry. The company, which started business as a coat-focused off-price retailer, is now focusing on “open to buy” off-price model.

The current model is helping customers get nationally branded, fashionable and high-quality products for the right prices. Over the years, the company has increased vendor count, made technological advancements, initiated a better marketing approach and focused on localized assortments.

Apart from this, in order to drive the top line, Burlington Stores has been focusing on store expansion. The company’s store count has increased from 13 in 1980 to 629 stores in fiscal 2017. In fiscal 2014, 2015, 2016 and 2017, the company opened 37, 24, 28 and 30 stores, respectively.

 

Burlington Stores now intends to focus on categories such as home, beauty and ladies apparel. Further, it remodeled 34 stores in fiscal 2017. The company plans to open 35 to 40 net new stores and remodel 34 in fiscal 2018. It also believes that there is room to increase the store count to 1,000.

All these endeavors have helped the company gain investor confidence. In a year, Burlington Stores’ shares have gained 57.2%, outperforming the industry's rally of 23.4%.

Furthermore, this Zacks Rank #2 (Buy) company has been doing quite well on the revenue front. The company’s revenues have not only outpaced estimates in seven out of the nine trailing quarters but have also shown constant improvement.

In the first quarter of fiscal 2018, the top line improved 12.8%, following an increase of 14.9% in the preceding quarter. Meanwhile, comparable store sales increased 3.4%, 4.5%, 2.1% and 4.9% in fiscal 2017, 2016, 2015 and 2014, respectively.

On top of it, the solid fiscal 2018 guidance has instilled confidence in the stock. For fiscal 2018, management expects total sales growth of 9.7-10.5%. The company now envisions fiscal 2018 adjusted earnings per share in the range of $5.90-$6.00, up from its earlier projection of $5.73-$5.83.

Other Stocks to Consider

Urban Outfitters (URBN - Free Report) delivered an average positive earnings surprise of 19.8% in the trailing four quarters. It has a long-term earnings growth rate of 12% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shoe Carnival (SCVL - Free Report) delivered an average positive earnings surprise of 21.3% in the last four quarters. It has a long-term earnings growth rate of 12% and a Zacks Rank #1.

Fossil Group (FOSL - Free Report) delivered an average positive earnings surprise of 54.1% in the trailing four quarters. It has a long-term earnings growth rate of 5% and a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Published in