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Burlington Stores' (BURL) Store-Growth Initiatives Look Good
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Burlington Stores, Inc. (BURL - Free Report) stock is well-placed for growth, thanks to the successful execution of its Burlington 2.0 strategy and strong fundamentals. The main objective of the 2.0 initiative is to significantly improve the execution of the off-price model. The company has also been progressing well in its store-expansion efforts.
Let’s delve deeper.
Further Analysis
The 2.0 initiative is focused on three aspects which are marketing, merchandising and store prototype. Under the marketing aspect, Burlington Stores looks to communicate a stronger and more direct off-price value message and deliver the communication in a more cost-effective manner. This marketing program is expected to leverage the company’s wide reach. With respect to merchandising, management expects investing in merchandising capabilities to better execute the off-price model and boost overall growth.
The 2.0 initiative further focuses on offering great customer value by effectively managing liquidity, chasing sales, buying opportunistically, procuring lean inventories, getting fast fresh receipts to the sales floor and making the store model flexible. In addition, Burlington Stores is focused on store expansion to drive top-line growth. The company’s store-related efforts including smaller store prototypes have been on track. Over time, this smaller prototype is likely to represent the majority of the company’s new store openings. With this smaller prototype, the company aims to operate with leaner in-store inventory levels.
Markedly, the company’s store count has increased from 13 in 1980 to 927 stores in fiscal 2022. During the first quarter of fiscal 2023, Burlington Stores inaugurated six net stores, thus taking the total store base to 933. This comprised 13 store openings and seven relocations or closings. For fiscal 2023, management intends to open 70 net new stores to 80 net new stores and projects capital expenditures, net of landlord allowances, of $560 million. Management had earlier cited that the company’s new store program can help open 500 net new stores to 600 net new stores in the following five years.
Overall, management remains optimistic about the long term due to greater consumer focus on value, lower levels of promotional activity, strong availability of great off-price merchandise, prudent decision making and a better expense environment.
What’s More?
Buoyed by all the aforesaid catalysts and an impressive first quarter, management provided an upbeat outlook for the second quarter and fiscal 2023. For the second quarter of fiscal 2023, total sales are projected to increase 8-10% and comparable sales are expected to rise 2-4% from the year-ago period. Adjusted EBIT margin is likely to be up 10-50 basis points (bps) from the last fiscal year’s quarterly reading and adjusted earnings per share (EPS) are forecast in the range of 35-40 cents. Burlington Stores’ adjusted earnings were 35 cents per share in the second quarter of fiscal 2022.
For fiscal 2023, comparable sales are anticipated to increase in the range of 3-5% against the 13% decrease reported during fiscal 2022. Net sales are expected to grow 12-14%, including an approximately 2% rise from the extra 53rd week against a 7% fall in fiscal 2022. Adjusted EBIT margin is now expected to increase 80-120 bps for the full fiscal year. Adjusted EPS is envisioned in the bracket of $5.50-$6.00, up from adjusted EPS of $4.26 recorded in the last fiscal year.
As a result, analysts seem optimistic about the stock. The Zacks Consensus Estimate for fiscal 2023 sales and EPS is currently pegged at $9.80 billion and $5.86, respectively. These estimates show an increase of 12.6% and 37.6%, respectively, year over year. Further, the apparel retailer’s shares have gained 5.6% in the past year, surpassing the industry’s 7.9% dip. A Growth Score of B and an impressive long-term expected earnings growth rate of 33.6% for this current Zacks Rank #3 (Hold) company bode well.
Key Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Urban Outfitters (URBN - Free Report) and American Eagle Outfitters (AEO - Free Report) .
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 3.4% and 732%, respectively, from the year-ago reported figures. ANF delivered a trailing four-quarter earnings surprise of 480.6%, on average.
Urban Outfitters, the lifestyle apparel and accessories retailer, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 12.2%, on average.
The consensus estimate for Urban Outfitters’ current financial-year sales and EPS suggests growth of 5.1% and 57.1%, respectively, from the year-ago reported figures.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO delivered an average earnings surprise of 9.2% in the trailing four quarters.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year EPS suggests growth of 4.1% from the year-ago reported figure.
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Burlington Stores' (BURL) Store-Growth Initiatives Look Good
Burlington Stores, Inc. (BURL - Free Report) stock is well-placed for growth, thanks to the successful execution of its Burlington 2.0 strategy and strong fundamentals. The main objective of the 2.0 initiative is to significantly improve the execution of the off-price model. The company has also been progressing well in its store-expansion efforts.
Let’s delve deeper.
Further Analysis
The 2.0 initiative is focused on three aspects which are marketing, merchandising and store prototype. Under the marketing aspect, Burlington Stores looks to communicate a stronger and more direct off-price value message and deliver the communication in a more cost-effective manner. This marketing program is expected to leverage the company’s wide reach. With respect to merchandising, management expects investing in merchandising capabilities to better execute the off-price model and boost overall growth.
The 2.0 initiative further focuses on offering great customer value by effectively managing liquidity, chasing sales, buying opportunistically, procuring lean inventories, getting fast fresh receipts to the sales floor and making the store model flexible. In addition, Burlington Stores is focused on store expansion to drive top-line growth. The company’s store-related efforts including smaller store prototypes have been on track. Over time, this smaller prototype is likely to represent the majority of the company’s new store openings. With this smaller prototype, the company aims to operate with leaner in-store inventory levels.
Markedly, the company’s store count has increased from 13 in 1980 to 927 stores in fiscal 2022. During the first quarter of fiscal 2023, Burlington Stores inaugurated six net stores, thus taking the total store base to 933. This comprised 13 store openings and seven relocations or closings. For fiscal 2023, management intends to open 70 net new stores to 80 net new stores and projects capital expenditures, net of landlord allowances, of $560 million. Management had earlier cited that the company’s new store program can help open 500 net new stores to 600 net new stores in the following five years.
Burlington Stores, Inc. Price and EPS Surprise
Burlington Stores, Inc. price-eps-surprise | Burlington Stores, Inc. Quote
Overall, management remains optimistic about the long term due to greater consumer focus on value, lower levels of promotional activity, strong availability of great off-price merchandise, prudent decision making and a better expense environment.
What’s More?
Buoyed by all the aforesaid catalysts and an impressive first quarter, management provided an upbeat outlook for the second quarter and fiscal 2023. For the second quarter of fiscal 2023, total sales are projected to increase 8-10% and comparable sales are expected to rise 2-4% from the year-ago period. Adjusted EBIT margin is likely to be up 10-50 basis points (bps) from the last fiscal year’s quarterly reading and adjusted earnings per share (EPS) are forecast in the range of 35-40 cents. Burlington Stores’ adjusted earnings were 35 cents per share in the second quarter of fiscal 2022.
For fiscal 2023, comparable sales are anticipated to increase in the range of 3-5% against the 13% decrease reported during fiscal 2022. Net sales are expected to grow 12-14%, including an approximately 2% rise from the extra 53rd week against a 7% fall in fiscal 2022. Adjusted EBIT margin is now expected to increase 80-120 bps for the full fiscal year. Adjusted EPS is envisioned in the bracket of $5.50-$6.00, up from adjusted EPS of $4.26 recorded in the last fiscal year.
As a result, analysts seem optimistic about the stock. The Zacks Consensus Estimate for fiscal 2023 sales and EPS is currently pegged at $9.80 billion and $5.86, respectively. These estimates show an increase of 12.6% and 37.6%, respectively, year over year. Further, the apparel retailer’s shares have gained 5.6% in the past year, surpassing the industry’s 7.9% dip. A Growth Score of B and an impressive long-term expected earnings growth rate of 33.6% for this current Zacks Rank #3 (Hold) company bode well.
Key Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Urban Outfitters (URBN - Free Report) and American Eagle Outfitters (AEO - Free Report) .
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 3.4% and 732%, respectively, from the year-ago reported figures. ANF delivered a trailing four-quarter earnings surprise of 480.6%, on average.
Urban Outfitters, the lifestyle apparel and accessories retailer, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 12.2%, on average.
The consensus estimate for Urban Outfitters’ current financial-year sales and EPS suggests growth of 5.1% and 57.1%, respectively, from the year-ago reported figures.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO delivered an average earnings surprise of 9.2% in the trailing four quarters.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year EPS suggests growth of 4.1% from the year-ago reported figure.