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Why Burlington Shares Popped Today

By Jeremy Bowman – May 31, 2018 at 1:19PM

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Shares of the off-price retailer gained on a strong earnings report.

What happened

Shares of Burlington Stores Inc (BURL 0.48%) were moving higher today after the off-price retailer posted better-than-expected results and raised its guidance in its first-quarter earnings report. As a result, the stock was up 8.2% as of 12:19 p.m. EDT.

The entrance to a Burlington store

Image source: Burlington Stores.

So what 

Once again, the company formerly known as Burlington Coat Factory topped analyst estimates as comparable sales ticked up 4.8%, driving overall sales up 12.8% to $1.52 billion, which beat expectations at $1.49 billion. Gross margin in the period increased 35 basis points to 41.2% due to improved merchandise margins, and other operating costs improved as the company gained leverage from the increase in comparable sales.  

With the help of a lower tax rate from tax reform, adjusted earnings per share jumped 59% to $1.26, which was well ahead of the consensus at $1.09.

CEO Tom Kingsbury said he was "very pleased" with the strong results in the quarter.

Now what 

Burlington has been a standout performer in retail, as its off-price model has protected it from the threat of e-commerce, and the company has consistently ramped up profits as it's added new stores and comparable sales have grown. The stock is now up nearly 500% since its 2013 IPO.

Building on that momentum, management raised its full-year guidance, calling for comparable sales growth of 3% and adjusted earnings per share of $5.90 to $6.00, up from a previous range of $5.73 to $5.83. With another impressive quarter on the books and a hike in guidance, the stock is looking as strong as ever.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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