Here's Why Burlington Stores (BURL) is Up Over 60% in 3 Months
Burlington Stores, Inc. BURL stock is poised well for growth, thanks to the successful execution of its Burlington 2.0 strategy and strong prospects. The company’s 2.0 initiative focuses on improving the execution of the off-price model. It has also been progressing well in its store-expansion efforts for a while now. Meanwhile, management has made multiple changes to the company’s business model in order to adapt to the evolving changes in the industry.
These catalysts have aided this apparel retailer’s shares to appreciate 63.7% in the past three months, surpassing the industry’s 4.6% rise.
Let’s Delve Deep
Detailing the 2.0 initiative further, this strategy 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.
Additionally, Burlington Stores’ off-price model is helping customers to get nationally branded, fashionable, high quality as well as right priced products. Management has increased vendor count, made technological advancements, initiated a better marketing approach and is focused on localized assortments.
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Markedly, the Burlington 2.0 initiative is focused on offering great customer value by effectively managing liquidity, chasing sales, buying opportunistically, lean inventories, getting promptfresh receipts to the sales floor and making the store model flexible.
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. The smaller prototype is likely to represent a majority of the company’s new store openings. Via this smaller prototype, the company aims to operate with leaner in-store inventory levels. Management had earlier raised the long-term store target to 2,000 stores from 1,000, given the smaller store format enabled by the Burlington 2.0 strategy.
What’s More?
Management remains optimistic about the outlook for 2023 on five factors. These factors are a greater consumer focus on value, lower levels of promotional activity with a recovering sales trend, strong availability of great off-price merchandise, taking the right actions and a better expense environment in 2023, particularly for the contracted transportation rates. It expects the availability of great in-season merchandise to be pretty strong in 2023.
Additionally, analysts look optimistic about this Zacks Rank #3 (Hold) stock. The Zacks Consensus Estimate for fiscal 2023 sales and earnings per share (EPS) of $9.58 billion and $6.45, respectively, implies corresponding increases of 12.1% and 61.1% year over year. In fact, the consensus mark for fiscal 2023’s EPS has moved 1.4% north in the past seven days. A Momentum Score of B further speaks volumes for the stock.
All in all, BURL stock appears a safe investment bet for 2023 given the aforementioned factors.
Solid Picks in Retail
We have highlighted three top-ranked stocks, namely Tecnoglass TGLS, Chico's FAS CHS and Boot Barn BOOT.
Tecnoglass manufactures and sells architectural glass,windows and aluminum products for residential and commercial construction industries. TGLS 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 Tecnoglass’ current financial-year sales and EPS suggests growth of 11.2% and 9%, respectively, from the year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 26.9%, on average.
Chico's FAS, an omnichannel specialty retailer, currently sports a Zacks Rank of 1. CHS has a trailing four-quarter earnings surprise of 87.5%, on average.
The Zacks Consensus Estimate for Chico's FAS’s current financial-year sales and EPS suggests growth of 19.6% and 127.5%, respectively, from the year-ago reported figures.
Boot Barn, a fashion retailer of apparel and accessories, currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 11.7%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests growth of 11.8% from the year-ago reported figure.
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Chico's FAS, Inc. (CHS) : Free Stock Analysis Report
Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
