Why Is Burlington (BURL) Stock Soaring Today

Adam Hejl /
2024/05/30 11:26 am EDT

What Happened:

Shares of off-price retail company Burlington Stores (NYSE:BURL) jumped 19.7% in the morning session after the company reported a "beat and raise" quarter. Revenue came in slightly ahead of analyst' estimates. However, BURL blew past analysts' non-GAAP operating income and EPS expectations, highlighting its ability to manage costs and drive profitability. The performance was even more impressive considering some of the challenges called out during the quarter, including a slow start in February, partly attributed to disruptive weather and delayed tax refunds. Moving on, its full-year earnings guidance was raised and exceeded Wall Street's estimates. On the other hand, its earnings forecast for the next quarter missed analysts' expectations. Zooming out, we think this was still a very good quarter.

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What is the market telling us:

Burlington's shares are quite volatile and over the last year have had 10 moves greater than 5%. But moves this big are very rare even for Burlington and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 6 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.

Burlington is up 21.5% 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 $1,517.

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