Market Overview

Burlington's Superior Growth Profile Should Help The Stock Outperform

Share:

Daniel Hofkin of William Blair initiated coverage of Burlington Stores Inc (NYSE: BURL) on Wednesday with an Outperform rating, given the off-price retailer's superior growth profile versus its peers such as TJX Companies Inc (NYSE: TJX).

Hofkin is bullish on the off-price retail segment's continuing growth and compelling value proposition, constantly changing assortment offering, strong access to branded products and the ongoing woes being felt by traditional full-priced department and specialty stores.

Burlington Versus Peers

Among the off-price group, Burlington boasts a better growth profile. The company is less penetrated in terms of its retail store base (592 versus TJX's 2,221) and has substantial opportunities to improve its sales productivity (retail sales/square foot of $126 versus TJX's $332) and operating margins which are already showing signs of improvement but are still below peer retailers.

Hofkin also argued Burlington holds an advantage over its peers in areas such as dress clothing (suits, separate slacks, jackets and dress shirts) as well as in the ladies' career category, children's dresses and suits, juvenile furniture and baby depot.

Burlington also faces substantial opportunity to increase its home decor business, where sales penetration is notably below its competitors, Hofkin said. 

Finally, the analyst is modeling Burlington to achieve annual earnings per share growth in the mid-teens, driven by 3 to 4 percent comp-store sales growth. The number puts Hofkin's estimates ahead of the company's own 2-to-3 percent longer-term guidance.

See Also:

TJX, Ross And Burlington Will Open The Same Number Of Stores Macy's, Sears And JC Penney Are Closing

Macy's Biggest Foe Isn't Amazon... It's Other Brick & Mortar Retailers

Latest Ratings for BURL

DateFirmActionFromTo
Jun 2020Morgan StanleyMaintainsOverweight
May 2020Nomura InstinetMaintainsBuy
May 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for BURL
View the Latest Analyst Ratings

 

Related Articles (BURL)

View Comments and Join the Discussion!

Posted-In: Burlington William BlairAnalyst Color Initiation Analyst Ratings

Latest Ratings

StockFirmActionPT
CYTKHC Wainwright & Co.Maintains38.0
COLLBWS FinancialInitiates Coverage On8.0
XYLRosenblattUpgrades85.0
BFYTCanaccord GenuityDowngrades31.0
NFLXWedbushMaintains220.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com