Analysts Lorraine Hutchinson and Stephen Albert's comments came after they were convinced by the company's management's initiative following their meeting with the management. They believe that dislocations of supply chain are favorable for Burlington out the closure of Macy's Inc M 100 stores and from the bankruptcy of Hanjin.
In a research note, the brokerage viewed, "BURL expects almost no negative impact from the Korean shipper's bankruptcy but it should benefit from any product delays experienced by other retailers. A larger scale and strong merchandising organization are allowing BURL to negotiate more value in its assortment. As a result, BURL has driven positive traffic in seven of the last eight quarters and is offsetting average unit retail pressure with strong unit sales."
Bank of America is not worried about the wage inflation, which is expected to be $7 million of incremental expense pressure versus $5 million in last fiscal year since it would be offset by profit improvement initiative. The brokerage justified premium to Burlington shares, citing "EPS growth of ROST/TJX and is one of the only beat and raise stories in retail."
The stock traded at $82.93, down 0.18 percent on the day at time of writing.
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