Burlington Stores-Burlington Stock Trades 3% Below Its 52-Week High: How to Play Ahead?

Core Insights - Burlington Stores, Inc. (BURL) is currently trading 3.3% below its 52-week high, with a 49.1% stock gain over the past year, outperforming the Zacks Retail-Discount Stores industry's growth of 22.2% [1][2] Company Performance - The company has achieved a 10.5% increase in total sales in the third quarter of fiscal 2024, supported by a strategic expansion plan targeting 101 net new store openings by the end of fiscal 2024 [10][11] - Adjusted EBITDA for the third quarter rose 30.3% year over year to $228.8 million, with an adjusted EBITDA margin increase of 140 basis points to 9.1% [12] - The gross margin is expected to expand by 60 basis points year over year to 43.1% in fiscal 2024, with a forecasted adjusted EBIT margin increase of 100 basis points [13][15] Strategic Initiatives - Burlington 2.0 transformation is enhancing operational efficiency and customer value through advanced technologies, improving inventory allocation and reducing markdowns [8][9] - The company is set to open a 2-million-square-foot distribution center in Savannah, GA, in fiscal 2026, which will enhance efficiency and scalability [14] Financial Outlook - Total sales for fiscal 2024 are projected to grow by 9-10%, with comparable store sales expected to rise by 2-4% [15] - For the fiscal fourth quarter, total sales growth is anticipated at 5-7%, with adjusted EPS projected at$ 3.55- $3.75 [17] Challenges - Adjusted selling, general and administrative costs rose 9.2% year over year to$ 680 million in the fiscal third quarter, driven by higher investments in store payroll [18] - Warmer-than-average temperatures caused a 300-basis-point reduction in comparable store sales, highlighting risks associated with unpredictable climate patterns [19]