Off-price retailer Burlington Stores (NYSE:BURL) has posted strong sales growth and steady margin expansion over the past several years. As a result, Burlington Stores stock soared more than 500% from less than $30 five years ago to an all-time high near $180 last fall. This far exceeded the share price gains delivered by its larger peers, TJX Companies (NYSE:TJX) and Ross Stores (NASDAQ:ROST).

However, Burlington finally experienced a setback last quarter when the company missed its sales guidance. That caused Burlington Stores stock to crash -- even though the company still beat its earnings guidance. This stock pullback looks like a buying opportunity for long-term investors.

Mixed results in the fourth quarter

In recent weeks, TJX and Ross Stores reported strong sales results for the fourth quarter. Ross Stores delivered 4% comp sales growth, while TJX achieved a particularly impressive 6% comp sales gain.

Unfortunately, Burlington wasn't able to match those strong performances. Comp sales rose just 1.3% during the fourth quarter, missing management's forecast for a 2% to 3% increase. Total sales did rise 7.4%, adjusting for the extra week in the fourth quarter of fiscal 2017, thanks to Burlington's aggressive pace of new store openings.

Management attributed the sales miss to several factors. First, the company faced a tough year-over-year comparison, as comp sales surged 5.9% in the prior-year period. Second, Burlington entered the fall season with inadequate inventory of cold-weather items and therefore missed out on sales in November. By the time it corrected this error -- in mid-December -- temperatures had risen, dampening demand. Third, the company has been struggling to improve its execution in the important ladies apparel market.

Check out the latest earnings call transcript for Burlington Stores.

The exterior of a Burlington store

Burlington's comp sales growth slowed last quarter. Image source: Burlington Stores.

Despite its subpar sales growth, Burlington beat its forecast for earnings per share (albeit partly due to a lower-than-expected tax rate). Adjusted EPS surged 28% to $2.83 for the quarter. For fiscal 2018 overall, adjusted EPS reached $6.44: up 46% year over year. That far exceeded its initial full-year EPS guidance range of $5.73 to $5.83.

Ample room for sales growth and margin expansion

During fiscal 2018, Burlington opened 68 new stores and closed or relocated 22 locations. That drove a 7.3% increase in its store count to 675 locations. Management sees ample room to grow the chain to at least 1,000 stores over time. Given that Ross Dress for Less and T.J. Maxx have more than that number of stores in the U.S. and are still growing, this target seems conservative.

In fiscal 2019, Burlington will continue expanding aggressively, taking advantage of the ample real estate available following big-box store closures by the likes of Toys R Us. The company's plan calls for opening 75 new stores, offset by 25 store closures or relocations.

Burlington also aims to boost sales per square foot by reducing the average size of its stores and by gaining market share in the home and ladies apparel markets, where it is underpenetrated. It also has a substantial opportunity to grow in the toys and baby categories following the liquidation of Toys R Us and Babies R Us.

Meanwhile, by steadily reducing its inventory per store to boost inventory turnover, Burlington has expanded its operating margin by more than 4 percentage points over the past six years. Last year, the company's adjusted operating margin reached 9%, up from 8.5% a year earlier. TJX and Ross Stores both routinely earn double-digit operating margins, so there's clearly further room for improvement.

Burlington Stores stock is cheap enough to buy

While Burlington Stores doesn't have the same long track record of success as TJX and Ross Stores, it is following a similar playbook. Furthermore, there are ample signs that its strategy is working, as sales and profitability have surged since 2013.

For investors, the advantage of investing in Burlington Stores is that it has more room for sales growth and margin expansion than its larger rivals. Indeed, management expects adjusted EPS to reach a range of $6.93 to $7.06 this year, representing underlying growth of 10% to 12% year over year, excluding one-time items. And of course, it's important to remember that Burlington's earnings soared well beyond the company's initial forecast last year.

Burlington Stores stock has generally traded at a premium valuation in recent years because of its superior earnings growth. However, the stock now sits about 20% below its 52-week high and trades for just a little more than 20 times forward earnings. That's roughly in line with the valuations of TJX and Ross Stores. At this price, Burlington Stores looks like a great stock for patient investors.