Burlington stores traffic for Q4 earnings growth

Burlington Stores Inc. (BURL) is scheduled to report its fourth-quarter earnings results on Thursday before the market opens. The branded apparel products retailer’s results will be benefited by growth in comparable sales and overall sales, as well as improvement in adjusted EBIT margin. The bottom line will be driven by strong sales growth and expense leverage as well as disciplined expense management.

The company has now been able to attract the customers through its “open to buy” off-price model instead of the previous coat-focused off-price retailer. Also, the company has initiated a better marketing approach along with higher vendor counts, technological advancements and localized assortments could increase the customer base.

Burlington is also gradually expanding its store fleet as its primary focus on home, beauty and gifts turned attractive for the customers. The company has taken the peers competition seriously as it started augmenting sales, optimizing markdowns, effectively managing inventory and lowering expenses. This could aid in improvizing operating margin and lower the gap of the same compared with its competitors.

Analysts expect earnings to jump by 27.60% year-over-year to $2.77 per share and revenue to rise by 5.30% to $2.04 billion for the fourth quarter. In comparison, during the previous year quarter, the company posted a profit of $2.17 per share on revenue of $1.94 billion. Majority of the analysts recommended a “strong buy” or “buy” rating while expecting the stock to reach $181.94 per share in the next 52 weeks.

For the third quarter, the company reported a 71% jump in earnings helped by higher sales, comparable sales growth and an 80 basis point adjusted EBIT margin improvement. Total sales increased by 13.7% helped by the outstanding performance of its new stores. Comparable store sales increased 4.4% for the third quarter, on top of last year’s 3.1% same-store sales increase.

During the third quarter, Burlington’s top performing businesses were home, including toys, beauty, men’s and ladies sportswear, athletic shoes, and athletic apparel and baby apparel and baby depot. Geographical-wise, the Northeast and the Southwest performed above the chain average while the Midwest comps were below.

For the fourth quarter, the company had expected total sales growth in the range of 8% to 9% and adjusted earnings in the range of $2.71 to $2.75 per share. Shifted comparable store sales are anticipated to increase in the range of 2% to 3% on top of a 5.9% increase during the fourth quarter of fiscal 2017.

Shares of Burlington Stores opened higher on Tuesday and is trading above the green territory. The stock has risen over 40% in the past year and over 1% in the past three months.