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Why Is Burlington Stores (BURL) Up 11.6% Since Its Last Earnings Report?
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It has been about a month since the last earnings report for Burlington Stores, Inc. (BURL - Free Report) . Shares have added about 11.6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is BURL 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 Beats on Q4 Earnings & Sales Beat Estimate
Burlington Stores continued with its positive earnings surprise streak in the fourth quarter of fiscal 2017. Also, net sales surpassed the Zacks Consensus Estimate, after missing the same in the preceding quarter.
The company’s adjusted earnings of $2.17 a share outpaced the Zacks Consensus Estimate of $2.09. The bottom line was also up from the year-ago figure of $1.78. Higher sales, margin expansion, cost control and share repurchase activity led to the improvement.
Net sales of this company came in at $1,936.8 million, increasing 14.9% year over year. The reported figure surpassed the consensus mark of $1,882 million. Comparable store sales (comps) rose 5.9% in the quarter compared with 4.6% growth in the year-ago quarter.
In fact, this was the 20th straight quarter of comps growth and the reflection of the same is quite visible in Burlington Stores’ price performance.
Gross margin increased 20 basis points to 42% mainly owing to higher merchandise margin. While adjusted operating income increased 17% to $250 million, operating margin grew 20 basis points to 12.9%.
Adjusted EBITDA was up 17% to $298 million, while EBITDA margin, as a percentage of sales, expanded 30 basis points to 15.4% on account of higher gross margin. Management anticipates adjusted EBITDA margin expansion of 30-40 basis points in fiscal 2018.
Currently, this off-price retailer intends to focus more on categories such as home, beauty and ladies apparel. Furthermore, Burlington Stores remodeled 34 stores and opened 37 net new stores in fiscal 2017. It plans to open 35 to 40 net new stores in fiscal 2018.
Per the company, there is room to increase the store count to 1,000. Notably, it operated 629 stores at the end of the fiscal fourth quarter. Management informed that new and non-comp outlets contributed $79 million to the fourth-quarter sales.
Other Financial Aspects
Burlington Stores ended the quarter with cash and cash equivalents of $133.3 million, long-term debt of $1,113.8 million and shareholders’ deficit of $86.8 million. For fiscal 2018, the company projects net capital expenditures of approximately $250 million.
In the quarter under review, the company bought back 457,528 shares worth $52 million. At the end of the quarter, Burlington Stores had $217 million remaining under its current share buyback program.
Outlook
For fiscal 2018, management expects total sales to increase in the band of 9-10%, excluding the 53rd week. Comps growth is anticipated in the 2-3% range compared with the prior year’s gain of 3.4%. The company envisions fiscal 2018 adjusted earnings in the range of $5.73-$5.83 per share compared with $4.14 (excludes the impact of 53rd week) in the previous year.
For the first quarter of fiscal 2018, earnings are envisioned to come within the range of $1.05-$1.09 per share compared with 79 cents in the prior-year period. Further, sales and comparable sales are expected to lie within 9.5% to 10.5% and 2% to 3%, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter. In the past month, the consensus estimate has shifted by 9.2% due to these changes.
At this time, BURL has a great Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for momentum and to a lesser degree value.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise BURL has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Burlington Stores (BURL) Up 11.6% Since Its Last Earnings Report?
It has been about a month since the last earnings report for Burlington Stores, Inc. (BURL - Free Report) . Shares have added about 11.6% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is BURL 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 Beats on Q4 Earnings & Sales Beat Estimate
Burlington Stores continued with its positive earnings surprise streak in the fourth quarter of fiscal 2017. Also, net sales surpassed the Zacks Consensus Estimate, after missing the same in the preceding quarter.
The company’s adjusted earnings of $2.17 a share outpaced the Zacks Consensus Estimate of $2.09. The bottom line was also up from the year-ago figure of $1.78. Higher sales, margin expansion, cost control and share repurchase activity led to the improvement.
Net sales of this company came in at $1,936.8 million, increasing 14.9% year over year. The reported figure surpassed the consensus mark of $1,882 million. Comparable store sales (comps) rose 5.9% in the quarter compared with 4.6% growth in the year-ago quarter.
In fact, this was the 20th straight quarter of comps growth and the reflection of the same is quite visible in Burlington Stores’ price performance.
Gross margin increased 20 basis points to 42% mainly owing to higher merchandise margin. While adjusted operating income increased 17% to $250 million, operating margin grew 20 basis points to 12.9%.
Adjusted EBITDA was up 17% to $298 million, while EBITDA margin, as a percentage of sales, expanded 30 basis points to 15.4% on account of higher gross margin. Management anticipates adjusted EBITDA margin expansion of 30-40 basis points in fiscal 2018.
Currently, this off-price retailer intends to focus more on categories such as home, beauty and ladies apparel. Furthermore, Burlington Stores remodeled 34 stores and opened 37 net new stores in fiscal 2017. It plans to open 35 to 40 net new stores in fiscal 2018.
Per the company, there is room to increase the store count to 1,000. Notably, it operated 629 stores at the end of the fiscal fourth quarter. Management informed that new and non-comp outlets contributed $79 million to the fourth-quarter sales.
Other Financial Aspects
Burlington Stores ended the quarter with cash and cash equivalents of $133.3 million, long-term debt of $1,113.8 million and shareholders’ deficit of $86.8 million. For fiscal 2018, the company projects net capital expenditures of approximately $250 million.
In the quarter under review, the company bought back 457,528 shares worth $52 million. At the end of the quarter, Burlington Stores had $217 million remaining under its current share buyback program.
Outlook
For fiscal 2018, management expects total sales to increase in the band of 9-10%, excluding the 53rd week. Comps growth is anticipated in the 2-3% range compared with the prior year’s gain of 3.4%. The company envisions fiscal 2018 adjusted earnings in the range of $5.73-$5.83 per share compared with $4.14 (excludes the impact of 53rd week) in the previous year.
For the first quarter of fiscal 2018, earnings are envisioned to come within the range of $1.05-$1.09 per share compared with 79 cents in the prior-year period. Further, sales and comparable sales are expected to lie within 9.5% to 10.5% and 2% to 3%, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter. In the past month, the consensus estimate has shifted by 9.2% due to these changes.
Burlington Stores, Inc. Price and Consensus
Burlington Stores, Inc. Price and Consensus | Burlington Stores, Inc. Quote
VGM Scores
At this time, BURL has a great Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for growth investors while also being suitable for those looking for momentum and to a lesser degree value.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise BURL has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.