What Happened:
Shares of off-price retail company Burlington Stores (NYSE:BURL) jumped 8.9% in the morning session after the company reported fourth-quarter results and provided a strong earnings forecast for the full year, which exceeded analysts' expectations. Its revenue and EPS also outperformed Wall Street's estimates during the quarter.
On the other hand, its earnings forecast for next quarter missed analysts' expectations. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic.
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What is the market telling us:
Burlington's shares are somewhat volatile and over the last year have had 8 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago, when the stock gained 10% on the news that the company reported third quarter results with the all-important same-store sales metric in retail beating expectations, although revenue missed slightly. It was also good to see Burlington beat analysts' gross margin expectations this quarter. Lastly, on the positives, full year EPS guidance was raised, and management gave positive commentary on the current environment, saying that "November is off to a solid start, helped by cooler weather at the beginning of the month. We feel very good about how we are set up for Holiday." Overall, it was a strong quarter for BURL, and after off-price retail peer ROST reported strong earnings the week prior, the industry seemed to be holding up well.
Burlington is up 11.9% since the beginning of the year. Investors who bought $1,000 worth of Burlington's shares 5 years ago would now be looking at an investment worth $1,481.
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