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These 2 Off-Price Retailers Cheer Investors, Hit 52-Week High

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Retailers are in dire straits while struggling to survive the brick-and-mortar sale disruption. Nevertheless, as the saying goes, every cloud has a silver lining. Off-price retailers are among those who have been thriving even amid consumers’ ever-growing enthusiasm for online shopping. Such gainers include Burlington Stores, Inc. (BURL - Free Report) and The TJX Companies, Inc. (TJX - Free Report) , with their shares gaining 12.8% and 12.3% in the past three months, respectively, compared with the industry’s rise of 2.2%.

Incidentally, these renowned discount retailers, carrying a Zacks Rank #2 (Buy), hit a fresh 52-week high during the trading session on Apr 5. While Burlington Stores’ shares surged to $138.45, eventually closing at $137.13, TJX Companies shares soared to $85.21 and closed at $84.96. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Well, the success of theses retailers might make one wonder that the dominance of online giant Amazon (AMZN - Free Report) might be a mere exaggeration. On that note, let’s get an insight into what’s adding cheer to these stocks lately.

Surging Revenues & Gross Margin Drive Burlington Stores

Burlington Stores has been riding on higher revenues along with effective margin expansion and cost control efforts. On the revenue front, the company has been gaining from consistent improvements in comps. Further, management is confident that the comps growth will sustain in the forthcoming periods, backed by efficient operating strategies. In fact, this retail giant is now focusing on ‘open to buy’ off-price model, which will help customers to get nationally branded, fashionable, high quality and aptly-priced products. Additionally, in order to drive top-line growth, Burlington Stores has a prudent store expansion strategy in place. Over the years, the company increased vendor counts, made technological advancements, initiated better marketing approaches and focused on localized assortments to enhance sales.

 


 

Further, Burlington Stores boasts of a strong inventory management and cost-control policy. Incidentally, these actions have been aiding the company to deliver gross margin improvements over the last five years. In fact, such well-knit strategies and solid revenue trends have led management to provide a positive view for fiscal 2018. Indeed, these upsides have been quite sufficient to heighten investor’s optimism in the stock.

TJX Companies Gains From Comps Growth

TJX Companies’ comps have been gaining from consumers’ favorable response to the company’s brands and impressive merchandise assortments at reasonable prices. Moreover, strong merchandise margins reflect the company’s disciplined inventory management and strength of its off-price business model. Like TJX Companies and Burlington Stores, other off-price retailers, like Ross Stores (ROST - Free Report) have also been gaining strength from efficient merchandising policies.

Moving back to TJX Companies, the retailer’s aggressive marketing and advertising campaigns have been driving traffic to its stores. Its gift-giving initiatives, unique among off-price retailers and loyalty card program, improve customer engagement.

 


 

Moreover, in an effort to sustain the sturdy comps performance, TJX Companies resorts to frequent store openings and has been expanding at a rapid pace across the United States, Europe and Canada. Additionally, TJX Companies has undertaken several initiatives to boost its online traffic such as strategic pricing, effective offers and in-store return policies. Meanwhile, management is confident about fiscal 2019 comps growth and continues to stay focused on implementing sales-driving efforts to boost traffic.

Final Thoughts

In a nutshell, off-price retailers have been resilient and thriving well amid adverse retail industry conditions, courtesy of low-priced offering, attractive offers and carefully-chalked merchandising policies. This indicates that despite digital shopping gaining ground, consumers continue to flock to retail stores that offer substantial value for money. That said, we are confident that TJX Companies and Burlington Stores will continue to expand and maintain their position in investors’ books.

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