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Why Burlington Stores Stock Fell 27% in March

By Demitri Kalogeropoulos – Updated Apr 6, 2020 at 9:26AM

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COVID-19 spurred a temporary shutdown of all its stores starting on March 20.

What happened

Burlington Stores (BURL -1.55%) stock underperformed a weak market last month. Shares fell 27% compared to a 12.5% drop in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline added to a tough run for the discount retailer's shareholders, who have been down nearly 40% since the start of 2020.

A couple shopping together in a mall.

Image source: Getty Images.

So what

Investors began selling shares off as the COVID-19 outbreak started to produce widespread social distancing efforts in mid-March. Burlington then confirmed a major temporary impact to its business when it announced on March 20 that it was closing all its retail locations until further notice. "The health and safety of our associates and customers remain our highest priority," CEO Micheal O'Sullivan said in a press release.

Now what

Burlington's stores will reopen once the industry restarts, as it has in other countries that have passed the peak spreading phase of COVID-19. The exact duration of the shutdown and the poor economic conditions that follow, however, remain major question marks for many investors. As a result, the stock may continue to underperform as Wall Street waits for clarity about when Burlington can begin serving customers again.

Demitrios Kalogeropoulos 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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Burlington Stores, Inc. Stock Quote
Burlington Stores, Inc.
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