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Burlington Stores’ Strong 4Q17 Results and 2018 Outlook

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Burlington Stores’ Strong 4Q17 Results and 2018 Outlook PART 1 OF 5

Burlington Stores: Stock Rose on 4Q17 Results and 2018 Outlook

Stock rose on fiscal 4Q17 results

Burlington Stores (BURL) stock rose 5.8% on March 8, 2018, in reaction to its strong fiscal 4Q17 results and positive outlook for fiscal 2018. The stock continued to rise 4.2% to $128.07 on March 9. The off-price retailer exceeded analysts’ sales and earnings expectations for fiscal 4Q17. As of March 9, Burlington Stores stock has risen 4.1% on a YTD (year-to-date) basis.

On a YTD basis, Ross Stores (ROST) stock has fallen 4%, and TJX Companies (TJX) stock has risen 8.1% as of March 9.

Burlington Stores: Stock Rose on 4Q17 Results and 2018 Outlook

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Impressive returns in 2017

In fiscal 2017, Burlington Stores stock rose 45.2% compared to the S&P 500 Index, which rose 19.4%. The company outperformed its peers Ross Stores and TJX Companies, which rose 22.3% and 1.8%, respectively, in 2017.

In fiscal 2017, Burlington Stores repurchased about 3 million of its shares for $282 million. At the end of fiscal 2017, $217 million was remaining under the company’s current share repurchase authorization. Share repurchases result from enhancing earnings per share by bringing down the average share count.

Current valuation

As of March 9, Burlington Stores was trading at a 12-month forward PE (price-to-earnings) ratio of 21.8x. Its valuation was on par with larger peer TJX Companies but higher than Ross Stores’ valuation multiple of 18.8x.

Series overview

This series will analyze key growth drivers behind Burlington Stores’ strong sales and earnings in fiscal 4Q17. We’ll also look at the company’s margins in detail. In the next part of this series, we’ll look at the revisions analysts have made to Burlington Stores’ target stock price following the fiscal 4Q17 results.

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