What happened

Shares of Burlington Stores (NYSE:BURL) were climbing again last month after the off-price retailer  posted another strong earnings report. The stock gained 17%, according to data from S&P Global Market Intelligence as Burlington beat earnings estimates and lifted its full-year guidance.

The stock gained earlier in the month on signs of a trade deal with China and then popped on Nov. 26, after its earnings report came out.

BURL Chart

BURL data by YCharts

So what

Following the boost from trade negotiations and modest gains once retail earnings season began earlier in the month, Burlington shares came into the third-quarter report with the stock up 8.4% and tacked on another 8.5% on the 26th.

A shelf of sweaters at a clothing store.

Image source: Getty Images.

The company reported that comparable sales were up 2.7% in the quarter, driving overall revenue up 8.6% to $1.78 billion, essentially matching analyst forecasts, as the retailer continued to open new stores.  

Gross margin was flat from the year-ago period, but management executed by reducing comparable store inventory 4%, and trimming selling, general, and administrative expense margin. On the bottom line, adjusted earnings per share increased 28% to $1.55. 

CEO Michael O'Sullivan said he was "pleased with the results" and added 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

Looking ahead, Burlington raised its full-year EPS guidance from a range of $7.14-$7.22 to $7.28-$7.33, up from $6.44 last year, and for the fourth quarter, it expects comparable sales growth of 2%-3% and EPS of $3.12-$3.17.

Given the strong retail environment for the holiday season, with the stock market at an all-time high and robust consumer confidence, Burlington looks primed for continued gains in the fourth quarter. Over the longer term, the off-price channel looks set to continue outperforming the sector, as Burlington shares have soared in recent years.

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