A month has gone by since the last earnings report for Burlington Stores (BURL Quick QuoteBURL - Free Report) . Shares have added about 9.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Burlington Stores due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Burlington Stores’ Q3 Earnings & Sales Miss, Rise Y/Y

Burlington Stores reported third-quarter fiscal 2023 results, where sales and earnings missed the Zacks Consensus Estimate. However, both the top and bottom lines increased year over year.

It delivered adjusted earnings of 98 cents per share, lagging the Zacks Consensus Estimate of earnings of 99 cents. The bottom line surged 127.9% from 43 cents per share recorded in the year-ago fiscal quarter.

Total revenues of $2,289.3 million fell short of the consensus estimate of $2,313 million but increased 12.2% from the last fiscal year’s quarterly reported figure. The company’s comparable store sales jumped 6% from the year-ago period, compared with our estimate of 6.4% growth.

Margins

The gross margin was 43.2% in the reported quarter, up 200 basis points (bps) from third-quarter fiscal 2022 actuals. Notably, our estimate for the gross margin was also pegged at 43.2%. Merchandise margin increased by 150 bps and freight expenses improved by 50 bps.

Adjusted selling, general and administrative (SG&A) expenses, as a rate of sales, was 27.3%, increasing 50 bps from the third-quarter fiscal 2022 actuals. Our estimate for adjusted SG&A expenses, as a rate of sales, was 27.2%. Product sourcing costs included in SG&A expenses came in at $200 million, up from $177 million recorded in the fiscal year ago quarter. Product sourcing costs represent the processing goods expenses via supply chain and buying costs.

Adjusted EBITDA increased by 43.1% from the third quarter of fiscal 2022 to $176 million. Adjusted EBIT was $99 million, up from $55 million in the fiscal year ago quarter. Adjusted EBIT margin increased by 170 bps from the third quarter of fiscal 2022.

Other Financial Aspects

The company ended the reported quarter with cash and cash equivalents of $615.9 million, long-term debt of $1,397.6 million and stockholders’ equity of $850.5 million. BURL exited the fiscal third quarter with $1,440 million of liquidity, including $616 million of unrestricted cash and $824 million available under its ABL facility.

Burlington Stores ended the quarter with $1,412 million of outstanding total debt, comprising $940 million under its Term Loan Facility, $453 million of Convertible Notes and no borrowings under its ABL Facility.

Burlington Stores bought back 348,948 shares for $52 million under its share repurchase plan in the fiscal third quarter. As of Oct 28, 2023, BURL had $718 million remaining under its current share repurchase authorization. It is worth noting that on Aug 15, 2023, Burlington Stores’ board of directors approved the repurchase of up to an additional $500 million of common stock.

Outlook

For fiscal 2023, comparable sales are anticipated to increase 3% against the 13% decrease reported during fiscal 2022. Net sales are expected to grow 11%, including an approximately 2% rise from the extra 53rd week, against a 7% fall in fiscal 2022. Adjusted EBIT margin (excluding the impact of expected incremental expenses of 18 million related to the recently acquired Bed Bath & Beyond leases) is now expected to increase by 90-100 bps for the fiscal year. Adjusted earnings per share (EPS) are envisioned in the bracket of $5.72-$5.87 compared with an adjusted EPS of $4.26 recorded in the last fiscal year. The expected adjusted EPS excludes the impact of expected incremental expenses of 20 cents per share related to the acquired Bed Bath & Beyond leases.

For the fourth quarter of fiscal 2023, total sales are projected to increase 5-7% and comps are expected to be in the range of 2% decline to flat from the year-ago period. Adjusted EBIT margin is likely to be up by 0-40 bps from the last fiscal year’s quarterly reading and adjusted EPS is forecast in the range of $3.10 to $3.25.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Burlington Stores has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Burlington Stores has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Burlington Stores belongs to the Zacks Retail - Discount Stores industry. Another stock from the same industry, TJX (TJX Quick QuoteTJX - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended October 2023.

TJX reported revenues of $13.27 billion in the last reported quarter, representing a year-over-year change of +9%. EPS of $1.03 for the same period compares with $0.86 a year ago.

For the current quarter, TJX is expected to post earnings of $1.11 per share, indicating a change of +24.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for TJX. Also, the stock has a VGM Score of D.