Burlington Best Suited To Benefit From Inventory Supply, Says Analyst - Burlington Stores (NYSE:BURL)

Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on the shares of Burlington Stores BURL with a price target of $250.
The company reported Q4 EPS of $2.96 versus $2.53 last year, coming in above the consensus of $2.73 and guidance of $2.45-$2.75.
The earnings upside was driven by stronger topline growth, while gross margin was in-line and SG&A expenses came in a bit higher than expected, said the analyst.
The 4Q22 operating margin expanded 80 basis points to 10.0%, coming in above the consensus estimate of up 50 basis points to 9.7%.
The analyst said Burlington’s FY23 sales guide is above expectations, but EPS appears conservative.
On the heels of sequential improvement in comps throughout Q4, management noted that this trend has continued into February, reflecting improved conversion, basket size, and traffic early in FY23.
The analyst added that BURL continues to deliver value in its assortment that is resonating with the customer by capitalizing on a favorable off-price buying environment as well as a still uncertain macro environment and unpredictable consumer spending habits.
While near-term challenges persist for the lower-income consumer, the analyst continues to see BURL as well-positioned to capitalize on a beneficial inventory supply for the off-price channel that can support continued growth in FY23.
Price Action: BURL shares traded higher by 1.45% at $215.07 on Thursday.
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