雅虎香港財經 Burlington Stores (BURL) Gains 70% in 6 Months: Here's Why
Burlington Stores, Inc. BURL has exhibited a strong run in the past six months. The branded apparel retailer’s shares have rallied 70.5% compared with the industry’s 30.7% growth over the said period, driven by its focus on key areas like marketing, merchandising and store layout to enhance customer value and operational efficiency.
An uptrend in the Zacks Consensus Estimate echoes the same sentiment. The Zacks Consensus Estimate for earnings per share for the current and next fiscal years has increased by 1 penny and 3 cents to $7.41 and $9.12, respectively, over the past seven days. The Zacks Consensus Estimate for sales in the current and next fiscal years is pegged at $10.72 billion and $11.85 billion, suggesting 10.2% and 10.6% year-over-year growth, respectively.
BURL's Value Score of A adds to its strength.
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Let’s Delve Deeper
Burlington Stores has effectively segmented its customer base, targeting both lower-income customers and slightly higher-income shoppers looking for trade-down opportunities. This strategic focus allows the company to cater to a broad spectrum of consumer needs, enhancing its market reach and appeal.
The company's merchandising strategy has been a key to its success. The strategy focuses on offering a high mix of recognizable brands in its apparel and accessories businesses. This approach not only attracts trade-down shoppers but also boosts the company's comp sales growth, particularly during the holiday seasons when there is a surge in demand for gifting accessories and home decor.
Burlington Stores’ strong performance on regular-priced merchandise and the reduction in clearance inventory reflect efficient inventory management. Faster merchandise turnover and a strategic approach to clearance sales have contributed to healthy margins and reduced inventory holding costs.
BURL has shown remarkable operational efficiency, as evident from its significant operating margin expansion. This efficiency stems from improved cost-management practices, including enhanced merchandise margins and a streamlined supply chain.
Store Expansion Strategy Bodes Well
The company's store expansion strategy is characterized by an ambitious and strategic approach to significantly increase its market presence. Throughout fiscal 2023, it opened 104 stores, completed 13 relocations and closed 11. Management believes that there is a significant opportunity to expand the store count. It is also optimistic about the smaller store prototype.
In fiscal 2024, it plans to open 140 stores, targeting a net addition of 100 stores after accounting for relocations and closures. This expansion not only signifies the company's confidence in its business model but also its commitment to capturing a larger market share by entering new geographic locations and enhancing its visibility to attract a broader customer base.
A key aspect of this strategy is the acquisition of prime store locations, notably through the procurement of sites from the Bed Bath & Beyond bankruptcy process, which positions the company favorably in desirable markets. By adhering to rigorous standards for selecting new store locations based on traffic, demographics and co-tenants, the company ensures that each new store has a high potential for success, thereby supporting its growth objectives and strengthening its competitive position in the retail landscape.
Promising Outlook
Management provided an optimistic forecast for the upcoming periods. For the first quarter of fiscal 2024, the company anticipates total sales growth of 9-11% year over year. It also forecasts an adjusted EBIT margin rise of 20-60 basis points from that reported in the first quarter of fiscal 2023, leading to adjusted earnings per share (EPS) between 95 cents and $1.10. The expected improvement in margins is largely attributed to gains in the merchandise margin and supply-chain efficiencies.
For fiscal 2024, the Zacks Rank #1 (Strong Buy) company projects a 9-11% year-over-year increase in net sales, with an adjusted EBIT margin growth of 10-50 basis points. The adjusted EPS is projected to be $7-$7.60, suggesting a rise from the $6.06 reported in fiscal 2023.
Three Other Solid Picks
A few other top-ranked stocks are Deckers Outdoor Corporation DECK, American Eagle Outfitters Inc. AEO and Abercrombie & Fitch Co. ANF.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 38.7% and 15.8% from the year-ago period’s reported figures. DECK has a trailing four-quarter average earnings surprise of 32.1%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. The company flaunts a Zacks Rank #1 at present.
The Zacks Consensus Estimate for American Eagle Outfitters’ current fiscal-year earnings and sales indicates growth of 12.5% and 3.3% from the year-ago period’s reported figures. AEO has a trailing four-quarter average earnings surprise of 22.7%.
Abercrombie & Fitch is a specialty retailer of premium, high-quality casual apparel. The company currently sports a Zacks Rank #1. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year earnings and sales indicates growth of 19.1% and 5.6% from the year-ago period’s reported figures.
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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
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Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
