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Insight into Burlington Stores’ Sales Growth Strategy

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Recent performance

Burlington Stores’ (BURL) sales grew 12.8% to $1.5 billion in the fiscal first quarter, which ended on May 5. This growth rate was quite an improvement compared to its 5.0% growth rate in the fiscal first quarter of 2017.

The company’s same-store sales grew 4.8% in the fiscal first quarter driven by higher consumer traffic.

Enhancing merchandise assortment

Burlington Stores aims to attract more consumers by enhancing its merchandise assortment, especially in underpenetrated categories such as the home category. At the end of fiscal 2017, Burlington Stores’ home business accounted for 14% of its sales. The company believes that it can increase this proportion to 20% over time.

Burlington Stores also sees significant growth opportunities in the beauty and women’s apparel businesses. It plans to add more categories to accessories, enhance the products in its cosmetics and skincare category, and boost beauty sales by adding brands in both designer and prestige fragrances. In the women’s apparel business, the company is focusing on growth categories such as activewear.

Expanding store base

Burlington Stores plans to boost its sales through the expansion of its store fleet. In the fiscal first quarter, the company opened 18 net new stores and ended the quarter with 646 physical stores. Overall, the company is on track to open 35–40 net new stores in fiscal 2018, including 60 gross new stores compared to 48 in fiscal 2017. The company intends to close or relocate 20–25 stores in the current fiscal year. To attract more consumers, Burlington Stores plans to remodel 34 stores in fiscal 2018.

Burlington Stores’ other growth strategies include increasing its e-commerce sales and focusing on the quality of its vendor base.

In the next part of this series, we’ll assess Burlington Stores’ margins.

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