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Bull of the Day: Burlington Stores (BURL)

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Burlington Stores Inc. (BURL - Free Report) is doing something almost no other retailer is able to do right now and that is grow its business. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by 20% in fiscal 2017.

Burlington Stores is an off-price retailer with 592 stores in the United States and Puerto Rico. It offers fashion-focused merchandise at up to 65% off other retailers' prices including men's and women's apparel, baby, beauty, footwear, accessories, home and coats.

Many people still know Burlington by its previous name of Burlington Coat Factory but the company has been slowly de-weatherizing its business.

Coats and cold weather items made up just 5.5% of sales in fiscal 2016 down from 6.3% in fiscal 2015.

Another Beat for Burlington

On Mar 2, Burlington Stores reported its fiscal fourth quarter 2016 results and beat the Zacks Consensus Estimate again. It reported $1.78 versus the consensus of $1.70, for a 4.7% beat.

It has one of the best beat records on the Street for a retailer. It hasn't missed since its 2013 IPO.



Comparable store sales rose 4.6% and gross margin expanded by 80 basis points to 41.8%.

The strong categories were home, beauty, athletic shoes and handbags.

Merchandise inventories fell to $701.9 million from $783.5 million thanks to a comparable store inventory decrease of 9%.

Still Expanding

Unlike many retailers which are shutting stores or abandoning brick-and-mortar to sell completely online, Burlington Stores continues to add to its store count.

It expects to open another 30 stores in 2017. It has an ambitious strategy to grow to 1,000 stores, which is basically double its current store count of 572.

Burlington Stores was a little bit light on the first quarter comps, which is normally a slow quarter anyway. Comparable store sales were expected to be up just 1% to 2% due to a delay in federal tax refunds this year compared to last year.

But the analysts are bullish on the full year as 6 estimates were revised higher since the report. That has pushed the Zacks Consensus Estimate for Fiscal 2017 to $3.89 from $3.76 just a month ago.

That is earnings growth of about 20%.

They are also optimistic about fiscal 2018. They see another 14% earnings growth in that year.

Shares at 2-Year High

Given the continuing good news, shares have rallied big over the last 2-years, gaining 55% in that time.



You're not going to get the shares cheap, however. Burlington trades with a forward P/E of 24.

It is shareholder friendly, with a stock repurchase plan that has already bought $200 million of a $400 million authorization.

For investors looking for a retailer that is above the rest of the pack, Burlington Stores is one to keep on the short list.

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