Burlington Stores Inc Hits 20-Day Low on Earnings Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 30 2024
0mins
Should l Buy BURL?
Source: Benzinga
Burlington Stores Inc's stock fell by 3.00%, hitting a 20-day low as investors reacted to mixed earnings results.
The company reported a 23% increase in net income for Q3, but sales growth of 7% fell short of expectations. Analysts noted a decline in store traffic due to warm weather, impacting sales performance.
Despite raising its fiscal 2025 adjusted EPS guidance, the stock's decline reflects investor caution amid broader market trends.
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Analyst Views on BURL
Wall Street analysts forecast BURL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BURL is 334.62 USD with a low forecast of 310.00 USD and a high forecast of 363.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
13 Buy
5 Hold
0 Sell
Moderate Buy
Current: 302.920
Low
310.00
Averages
334.62
High
363.00
Current: 302.920
Low
310.00
Averages
334.62
High
363.00
About BURL
Burlington Stores, Inc. is an off-price retailer of branded merchandise at everyday low prices. The Company’s stores offer an extensive selection of in-season, fashion-focused merchandise, including women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. Its broad selection provides a wide range of apparel, accessories and furnishings for all ages. It sells a broad selection of merchandise acquired directly from manufacturers and other suppliers. It has six distribution centers. Its three east coast distribution centers are located in Edgewater Park, New Jersey; Burlington, New Jersey; and Logan, New Jersey. Its three west coast distribution centers are located in San Bernardino, California, Redlands, California, and Riverside, California. These six distribution centers occupy an aggregate of 5,135,000 square feet, and each includes processing, shipping and storage capabilities. It operates in about 1,108 stores.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Margin Improvement: Despite ongoing investments, TJX's pretax profit margin rose to 12.7%, up 40 basis points from the previous year, indicating the company's success in cost control and enhancing profitability.
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- New Additions: JPMorgan's February favorites list includes First Industrial Realty Trust, a Chicago-based industrial real estate owner, whose shares have risen nearly 8% over the past year but remain below the 2021 all-time high, indicating relative value and growth potential.
- Improving Fundamentals: Analyst Ken Goldman highlighted that industrial fundamentals are improving, and First Industrial Realty Trust is well-positioned to leverage its substantial development pipeline, thus providing a solid investment opportunity for stakeholders.
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See More
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Impact on Wealthier Shoppers: Wealthier shoppers are expected to benefit significantly from President Trump's new tax bill, which is likely to provide them with larger refunds.
Retailers' Advantage: Retailers that cater to wealthier consumers are positioned to gain the most from the economic changes brought about by the tax bill.
See More
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- Policy Shift: The Trump administration is expected to enhance affordability efforts ahead of the midterm elections, targeting low-income consumers, with anticipated changes likely to reshape market dynamics despite current limited impact.
- Beneficiary Companies: Analyst Lakos-Bujas highlighted that retailers like Dollar Tree (DLTR) and Dollar General (DG), along with financial firms such as Citigroup (C) and Western Union (WU), are poised to benefit, reflecting a focus on the low-end consumer segment.
- Market Performance: Despite a recent downgrade, Dollar Tree's stock has surged over 78% in the past year, while Walmart (WMT) has seen a 25% increase due to a surge in AI-driven traffic, indicating sustained demand for low-cost goods.
- Industry Trends: The S&P Retail Select Industry Index (SPSIRE) has gained over 10% in the past year, highlighting strong performance among discount retailers and reflecting a growing consumer demand for affordability.
See More
BURL Options Analysis: $300 Put Contract Shows Significant Appeal
- Put Option Appeal: The current bid for the $300.00 put option is $13.50, and if an investor sells this contract, they commit to buying the stock at $300.00, effectively lowering their cost basis to $286.50, making it an attractive alternative compared to the current price of $303.96.
- Yield Potential: Should the put option expire worthless, it would yield a 4.50% return on cash commitment, annualized at 38.20%, highlighting the potential profitability of this strategy, especially in a volatile market.
- Call Option Returns: The $315.00 call option has a current bid of $13.70; if an investor buys BURL shares at $303.96 and sells this call, they could achieve an 8.14% total return if the stock is called away at expiration, enhancing the investment's attractiveness.
- Market Volatility Considerations: The implied volatility for the put option is 45% and for the call option is 47%, compared to the actual trailing twelve-month volatility of 43%, indicating market expectations for future price fluctuations of BURL stock, necessitating careful risk-reward assessments by investors.
See More
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- Strong Sales Growth: TJX reported a 5% increase in comparable-store sales for Q3, surpassing analyst expectations of 3.7%, indicating that its off-price retail model is effectively attracting more high-income consumers amid economic uncertainty.
- Margin Expansion: Despite ongoing investments, TJX achieved a pretax profit margin of 12.7%, up 40 basis points from the previous year, demonstrating the company's ability to control costs while successfully expanding its market share.
- Store Expansion Plans: TJX aims to grow its store count from 5,191 to 7,000 over the next 10 to 15 years, with HomeGoods representing the largest growth opportunity, nearly doubling its footprint, reflecting the company's confidence in future growth.
- Significant Shareholder Returns: In the first nine months of fiscal 2026, TJX returned $3.1 billion to shareholders through buybacks and dividends, showcasing its strong cash flow generation and commitment to returning value to investors.
See More
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- Margin Improvement: Despite ongoing investments, TJX's pretax profit margin rose to 12.7%, up 40 basis points from the previous year, indicating the company's success in cost control and enhancing profitability.
- Expansion Plans: TJX aims to grow its store count from 5,191 to 7,000 over the next 10 to 15 years, with HomeGoods expected to nearly double its footprint in the U.S., reflecting the company's confidence in future growth.
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