Burlington Stores Reports Blowout First-Quarter Results; Shares Dip

Burlington Stores Inc. (BURL), an off-price department store retailer, reported blowout Q1 earnings and revenue driven by improved consumer spending. However, shares fell 1.1% to close at $324.65 on May 27, as the company did not provide Fiscal Year 2021 guidance citing the continued uncertainty related to the COVID-19 pandemic.

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The company reported adjusted earnings of $2.59 per share, well ahead of analysts’ expectations of $0.83 per share. In the prior-year quarter, the company reported an adjusted loss of $4.80 per share.

Revenue for the quarter came in at $2.19 billion, up 173.8% year-over-year, and outpaced the Street’s estimates of $1.77 billion. (See Burlington Stores stock analysis on TipRanks)

Michael O’Sullivan, CEO of the company said, “The second quarter is off to a good start, but the go-forward sales trend remains very difficult to predict. Meanwhile, expense headwinds in supply chain and freight have continued to deteriorate, and these are likely to weigh on our operating margin throughout the balance of the year.”

Following the results, Berenberg Bank analyst Brian McNamara reiterated a Hold rating on the stock and said “BURL’s results typically do not surprise in a large way. After reporting a robust Q1 with strong market share gains, we believe the muted share price reaction in pre-market trading suggests the market was expecting a strong result. Lack of guidance is probably not being viewed positively either, in our opinion.”

McNamara assigned a price target of $314 to the stock, implying 3.3% downside potential to current levels.

The rest of the Street has a Strong Buy consensus rating on the stock. That’s based on 12 Buys versus 3 Holds. The average analyst price target of $352.60 implies 8.6% upside potential to current levels. Shares have increased 48.6% over the past six months.

Burlington Stores scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.