What happened

Shares of Burlington Stores (BURL -3.38%) climbed nearly 10% on Tuesday following the company's third-quarter earnings release. The retailer beat earnings estimates and raised full-year guidance, an indication that the momentum that has fueled the shares' impressive jump over the past three years is not fading.

So what

Before markets opened on Tuesday, Burlington reported adjusted third-quarter earnings of $1.55 per share, beating the $1.40 per share consensus, despite revenue that at $1.775 billion came in just shy of analyst expectations. Sales were up 8.6% year over year, and comparable-store sales increased by 2.7% in the quarter.

A shopping center.

Image source: Getty Images.

Gross margin of 42.4% was flat compared with a year prior, with higher margins on merchandise more than offsetting increased freight costs and charges related to inventory write-offs. Adjusted EBITDA margin for the quarter was just above 10%, up from less than 2% as recently as fiscal 2013. But the figure also shows that Burlington has the potential to improve, with rival Ross Stores posting operating margins near 14% in recent years.

CEO Michael O'Sullivan, who joined Burlington from Ross earlier this year, said in a statement that "our disciplined inventory management continued through the third quarter, as our comparable store inventory decreased 4%, enabling us to continue to take advantage of the abundant values available in the marketplace."

Now what

Post-earnings, Burlington raised its full-year 2019 adjusted earnings guidance to a range of $7.28 to $7.33 per share, from $7.14 to $7.22, and ahead of the $7.22 per share consensus estimate. The company expects total sales to increase by 8.8% to 9.1% for the year, with comps up 2% to 3%. Burlington expects to have opened 51 new stores by year's end, necessitating about $310 million in capital expenditures net of landlord allowance but helping to fuel that growth.

Shares of Burlington Stores are up 150% over the past three years, more than tripling the S&P 500's 41% return. The company has carved out a profitable niche catering to budget-conscious consumers, and the momentum shows no sign of slowing.