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Why Burlington Stores Stock Jumped 17% in Early Trading Today

By Reuben Gregg Brewer - Mar 4, 2021 at 11:10AM

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Shares of discount retailer Burlington Stores rallied after it reported earnings. Here's what got investors so excited.

What happened

Share of off-price clothing retailer Burlington Stores (BURL 1.50%) rose just shy of 17% in the first hour of trading on March 4. The big news was earnings, which showed continued improvement from the worst of the coronavirus pandemic hit.

So what

Burlington's top line was 4% higher year over year in the fourth quarter while same store sales were flat. That's pretty good given the difficult backdrop in 2020. To provide a little context, the retailer's full-year sales were lower by 21%. Earnings for the fourth quarter came in at $2.33 per share. Impressively, Burlington managed to beat Wall Street expectations on the top and bottom lines during the final stanza of the year.  

Two people with shopping bags standing in a mall.

Image source: Getty Images.

So there was a good reason for the investor excitement here. But there's even more to the story. The company noted that sales improved monthly between November and January, with January showing double-digit growth. That is a very pleasing trend that hints that the worst may be past. Also, the company announced that it is increasing its long-term store count goal from 1,000 to 2,000, with plans for around 75 net new stores in 2021. In other words, Burlington remains pretty positive about the future. Investors appear to be too, based on the stock's price action. 

Now what

CEO Michael O'Sullivan noted that Burlington Stores sees "significant market share opportunity" ahead, even though "the retail environment is likely to remain unpredictable for some time." Still, based on the fourth-quarter results and monthly sales trends, it looks like the company is managing through this unpredictable period fairly well at this point. It's hardly surprising that investors would find this quarter's update exciting. 

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Burlington Stores, Inc. Stock Quote
Burlington Stores, Inc.
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