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Factors to Know Ahead of Burlington Stores' (BURL) Q4 Earnings

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Burlington Stores, Inc. (BURL - Free Report) is scheduled to report fourth-quarter fiscal 2018 results on Mar 7, before the opening bell. In the last reported quarter, this off-price retailer delivered a positive earnings surprise of 14.2%. Also, the company boasts an impressive earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 13%. Let’s see what awaits this quarterly release.

How are Estimates Faring?

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.77, reflecting an increase of 27.7% from $2.17 per share registered in the year-ago quarter. Notably, the consensus mark has remained stable over the past 30 days. For revenues, the consensus mark is estimated at $2,033 million, mirroring a 5% rise from the year-ago quarter’s tally.

For fiscal 2018, the Zacks Consensus Estimate for earnings is pegged at $6.38, reflecting an increase of 46% year over year. For revenues, the consensus estimate stands at $6.69 billion.

Burlington Stores, Inc. Price, Consensus and EPS Surprise

Factors That Hold Key to Burlington Stores’ Performance

Burlington Stores has made multiple changes to its business model to adapt to the ongoing changes in the industry. The company, which started business as a coat-focused off-price retailer, is now focusing on “open to buy” off-price model. The current model is helping customers to get nationally branded, fashionable, high quality and right-priced products. Furthermore, the company has increased vendor counts, made technological advancements, initiated a better marketing approach and focused on localized assortments over the years.

The company’s strategies include enhancement of assortments with the primary focus on underpenetrated categories, particularly home, beauty and gifts, in order to make business less weather sensitive. With regards to the company’s marketing endeavors, it is experiencing favorable results from its multichannel engagement strategy. Moreover, it is gradually expanding its store fleet. These apart, Burlington Stores intends to improve operating margin and lower the gap of the same compared with its peers by augmenting sales, optimizing markdowns, effectively managing inventory and focus on SG&A expenses.

On the revenue front, the company has been doing quite well. Burlington Stores’ revenues have outpaced the estimates in nine out of the 11 trailing quarters. For the fourth quarter, sales are expected to increase 8-9% with comps growth of 2-3%. Also, it expects total sales to increase 10.9-11.2% for fiscal 2018, with comps growth of 3.4-3.7%. Further, the company envisions earnings for the fourth quarter in the band of $2.71-$2.75 and for the fiscal year in the range of $6.33-$6.37 per share.

What Our Model Says

Our proven model does not show that Burlington Stores is likely to beat estimates in fourth-quarter fiscal 2018. This is because a stock needs to have — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) as well as a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Burlington Stores has a Zacks Rank #3 but its Earnings ESP of -0.60% makes surprise prediction difficult.

Stocks With Favorable Combination

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

Zumiez Inc (ZUMZ - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Abercrombie & Fitch Co. (ANF - Free Report) has an Earnings ESP of +2.28% and a Zacks Rank #2.

Ollie's Bargain Outlet Holdings, Inc. (OLLI - Free Report) has an Earnings ESP of +1.43% and a Zacks Rank #2.

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