Will Burlington Stores Deliver Strong Sales Growth in Q3?

Sirisha Bhogaraju - Author
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Nov. 26 2018, Updated 2:00 p.m. ET

Analysts’ expectations

Burlington Stores (BURL) is slated to announce its results for the third quarter of fiscal 2018[1. Fiscal Q3 2018 ended on November 3] on November 28. Burlington Stores’ stock has risen 20.6% on a year-to-date basis as of November 23. The company’s off-price model has helped it deliver same-store sales growth for 22 straight quarters.

Analysts expect Burlington Stores’ adjusted EPS, excluding one-time items, to rise 51.4% to $1.06 in the third quarter of the fiscal year and net sales to grow 11.4% to $1.6 billion. Larger peers TJX Companies (TJX) and Ross Stores (ROST) generated net sales growth of 12.1% and 6.6%, respectively, in the third quarter. For more on TJX Companies and Ross Stores’ results, see How Analysts Reacted to TJX’s and Ross Stores’ Q3 Results.

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Performance in the previous quarter

Burlington Stores’ net sales of $1.5 billion grew 9.9% on a year-over-year basis in the second quarter and were in line with analysts’ expectations. Investors were disappointed with the company’s same-store sales growth of 2.9%, which fell short of analysts’ estimate of 3%.

Burlington Stores’ fiscal 2018 second-quarter adjusted EPS grew 59.7% to $1.15 and easily beat analysts’ consensus estimate of $0.96. The significant growth in the company’s adjusted EPS was driven by higher sales, the impact of a lower share count resulting from share buybacks, and reduced taxes.

Burlington Stores continues to expand its store network to boost its top line. The company plans to open 67 gross new stores and relocate and close 24 stores in fiscal 2018. The company is also trying to increase its penetration in merchandise categories like home, women’s apparel, and beauty. It plans to enhance its margins through various initiatives, including more efficient inventory management.

Based on the guidance issued in August, Burlington Stores expects fiscal third-quarter sales growth in the 11%–12% range. The company’s expected fiscal 2018 third-quarter adjusted EPS, between $1.00 and $1.04, compares to $0.70 in the fiscal 2017 third quarter.

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