Image source: Burlington Coat Factory. 

What happened

Shares of Burlington Stores Inc. (NYSE:BURL) were surging today after the company posted another strong quarterly earnings report. As of 11:57 a.m. EST, the stock was up 13.8%.

So what

The clothing retailer said adjusted earnings per share (EPS) more than doubled, from $0.25 to $0.51, blowing past estimates at $0.33. The jump in profits was fueled by a comparable-sales increase of 3.7% and a gross margin improvement of 140 basis points, to 41.2%. Burlington's share buyback program also reduced shares outstanding by 5% over the past years, giving a boost to EPS.

Overall revenue rose 9.1%, to $1.34 billion, edging out the consensus at $1.32 billion. CEO Tom Kingsbury remarked: "We are very pleased with our third-quarter results, which exceeded our sales and earnings guidance. Our ability to execute our off-price model by delivering fresh product, compelling value, and sought-after brands continues to serve us well."

Now what

While much of the apparel retail industry has struggled lately, off-price brands like Burlington and TJX Companies have thrived: Burlington shares have nearly doubled this year. As e-commerce and fast-fashion brands chip away sales from traditional apparel retailers like department stores, off-price chains have found a valuable niche as their model is not easily replicated.

Following the momentum from the third quarter, Burlington raised its full-year guidance, now calling for adjusted EPS of $3.11-$3.15. It also sees top-line growth of 8.4%-8.7% and a comparable-sales increase of 3.9%-4.2%. For the fourth quarter, it expects comparable sales of 2.5%-3.5% and adjusted EPS at $1.63-$1.67. Analysts had been expecting $1.69 for the holiday quarter.

Shares may be getting pricey as they now trade at a P/E of 27 based on this year's earnings after today's surge, but after quarterly earnings doubled, it seems like the stock is worth the premium.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.