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How Burlington Stores (BURL) Looks Ahead of Q3 Earnings?

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We expect Burlington Stores, Inc. (BURL - Free Report) to report year-over-year decline in the top and bottom lines for third-quarter fiscal 2020, releasing on Nov 24 before market open. Although the Zacks Consensus Estimate for quarterly earnings increased 5 cents in the past seven days to 19 cents, the same suggests a significant decline from $1.55 earned in the year-ago quarter. For quarterly revenues, the consensus estimate is pegged at $1,546 million, suggesting a decline of more than 12% from the year-ago quarter’s tally.

A glimpse of the company’s performance in the trailing four quarters shows that it has reported a negative earnings surprise of 34.7%, on average.

Key Factors to Note

Burlington Stores is not immune to the ill impact of the coronavirus outbreak. The company has been witnessing a soft sales trend for a while owing to disruptions related to COVID-19. Also, management at its second-quarter earnings call on Aug 27, guided comp sales to be down nearly 20% for fiscal third quarter owing to ongoing COVID-19 uncertainty and delay in back to school. Further, SG&A is likely to be impacted by pandemic-related expenses in the second half. Also, management had anticipated a slight pressure in product sourcing costs as a rate of sales in the second half of the fiscal year.

Nevertheless, the company has been lowering markdowns and effectively managing inventory. Management had earlier projected that in-store inventories are likely to be down approximately 20-25% on a comp-store basis by the end of fiscal third quarter. Also, this off-price retailer has been strengthening vendor counts, making technological advancements and focusing on localized assortments. These factors might have provided some cushion to the quarterly performance.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Burlington Stores this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Burlington Stores, Inc. Price and EPS Surprise

Burlington Stores, Inc. Price and EPS Surprise

Burlington Stores, Inc. price-eps-surprise | Burlington Stores, Inc. Quote

Although Burlington Stores has a Zacks Rank #3, the company’s Earnings ESP of -28.82% is making surprise prediction difficult.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Casey's (CASY - Free Report) currently has an Earnings ESP of +3.32% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Best Buy (BBY - Free Report) presently has an Earnings ESP of +14.92% and a Zacks Rank #2.

Big Lots (BIG - Free Report) currently has an Earnings ESP of +0.06% and a Zacks Rank #3.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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