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Burlington Stores Stock Surged on Better-Than-Expected Q1 Results

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Better-than-expected results

Burlington Stores (BURL) stock rose 6.9% on May 30 as the off-price retailer announced better-than-expected results for the first quarter of fiscal 2019, which ended on May 4. Burlington Stores’ sales grew 7.3% to $1.63 billion in the first quarter driven by a sales contribution of $121 million from new and non-comparable stores. Analysts were expecting sales of $1.61 billion. Burlington Stores’ total revenue (comprises net sales and other revenue) grew 7.2%.

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The company’s same-store sales growth of 0.1% in the first quarter was unimpressive. Delayed tax refunds dragged down Burlington Stores’ same-store sales by mid-single digits in February. The company’s same-store sales were also adversely impacted by unfavorable spring weather and challenges in the ladies’ apparel business. These negative factors offset the strength in kids’ apparel, Baby Depot business, and home category.

In comparison, Ross Stores’ (ROST) sales grew 5.8% to $3.80 billion in the first quarter and same-store sales growth was 2.0%. Burlington Stores’ first-quarter adjusted EPS was flat on a year-over-year basis at $1.26 and exceeded analysts’ expectation of $1.25.

Updated fiscal 2019 outlook

Burlington Stores now expects its fiscal 2019 sales growth in the range of 8.5% to 9.2% compared to the previous guidance of 9% to 10% growth. The company expects its fiscal 2019 same-store sales growth in the range of 1.3% to 2.1% compared to the previous outlook range of 1.5% to 2.8%. Burlington Stores is trying to improve its sales by expanding its presence in underpenetrated categories like home and beauty. The company is also enhancing its assortment to drive improvement in the ladies’ apparel category.

Burlington Stores now expects its fiscal 2019 adjusted EPS in the range of $6.93 to $7.01 compared to the previous outlook of EPS in the range of $6.93 to $7.06.

As of May 30, Burlington Stores stock was down 4.1% on a year-to-date basis.

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