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1. Company Snapshot

1.a. Company Description

Burlington Stores, Inc.operates as a retailer of branded apparel products in the United States.The company provides fashion-focused merchandise, including women's ready-to-wear apparel, menswear, youth apparel, footwear, accessories, toys, gifts, and coats, as well as baby, home, and beauty products.


As of January 29, 2022, it operated 837 stores under the Burlington Stores name, 2 stores under the Cohoes Fashions name, and 1 store under the MJM Designer Shoes name in 45 states and Puerto Rico.Burlington Stores, Inc.was founded in 1972 and is headquartered in Burlington, New Jersey.

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1.b. Last Insights on BURL

Burlington Stores' recent performance was negatively impacted by mixed Q3 results, with EPS exceeding expectations but revenue and comparable sales falling short. Weather-driven sales weakness was cited as a reason for the softness. Despite this, the company raised its Q4 and FY25 profit outlook due to strengthening margins and sales momentum. Analysts have slashed their forecasts following the Q3 results, but the company's sound fundamentals and cheap relative valuation remain intact.

1.c. Company Highlights

2. Burlington Stores' Q3 Earnings: A Mixed Bag

Burlington Stores, Inc. reported its third-quarter 2025 earnings, with total sales increasing 7% and comp store sales rising 1%. The gross margin rate increased 30 basis points to 44.2%, driven by a 10 basis point increase in merchandise margin and a 20 basis point decrease in freight expenses. Adjusted earnings per share was $1.80, a 16% increase, beating analyst estimates of $1.59, with actual EPS coming in at $1.68. The company's adjusted EBIT margin was 6.2%, 60 basis points higher than last year.

Publication Date: Nov -26

📋 Highlights
  • Q3 Sales Growth & Comp Performance:: Total sales increased 7%, with comp store sales up 1%, though September saw a weather-related slowdown, improving to mid-single-digit comp growth by mid-October.
  • Gross Margin Expansion:: Gross margin rose 30 basis points to 44.2% (Y/Y), driven by a 10 bps merchandise margin gain and 20 bps lower freight expenses, while adjusted EBIT margin hit 6.2% (+60 bps Y/Y) and adjusted EPS grew 16% to $1.80.
  • 2025 Guidance Update:: Maintained Q4 comp growth at 0%-2% but raised adjusted EBIT margin and EPS guidance; full-year 2025 sales expected to rise ~8%, with operating income progressing toward a $1.6B 2028 target (6.2% operating margin in Q3, +60 bps Y/Y).
  • 2026 Expansion Plans:: Preliminary plans include 110 net new stores, high-single-digit sales growth, and 45 leases from Joann Fabrics bankruptcy, with operating margin targeting flat to last year at a 2% comp, plus 10-15 bps leverage per additional 1% comp growth.

Operational Performance

The company experienced a slowdown in September due to warmer weather, but its trend improved to mid-single-digit comp growth in mid-October. Despite this, Burlington's comp growth trailed behind off-price peers, which was partly attributed to weather and a unique impact on Burlington's cold-weather merchandise. The Southeast was the strongest region, while the Southwest trailed the chain. Beauty, accessories, and shoes saw the strongest performance, while home was softer.

Guidance and Outlook

The company updated its 2025 guidance, maintaining its comp store sales growth of 0% to 2% for the fourth quarter and raising its adjusted EBIT margin and adjusted earnings per share guidance. For 2026, Burlington preliminarily plans for total sales growth in the high single digits, 110 net new stores, and comp store sales growth of flat to 2%. The company expects to achieve margin expansion through slightly higher merchandise margin, continued supply chain productivity gains, and fixed cost leverage.

Valuation and Future Prospects

With a P/E Ratio of 28.53 and an EV/EBITDA of 16.63, the market seems to be pricing in a certain level of growth for Burlington Stores. The company's ROE is 28.79%, indicating a strong return on equity. Burlington is focused on finding margin and expense offsets to avoid retail price increases due to tariffs. The company feels good about its progress toward its long-range financial goals, particularly in driving operating margin expansion, and aims to achieve approximately $1.6 billion in operating income in 2028.

Regional Performance and Category Trends

The company's traffic was down in Q3, but this was offset by a higher average basket size. Stores in lower-income trade areas outperformed the chain, while stores in areas with a high proportion of Hispanic households saw a change in trend, from slightly outperforming to trailing the chain.

3. NewsRoom

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Can Burlington Stores' Burlington 2.0 Strategy Deliver Real Upside?

Dec -03

Source: zacks.com

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1832 Asset Management L.P. Boosts Stock Position in Burlington Stores, Inc. $BURL

Dec -03

Source: defenseworld.net

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Burlington Stores: Sound Fundamentals And Cheap Relative Valuation

Dec -01

Source: seekingalpha.com

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Burlington Stores, Oracle, Nutanix Are Among Top 10 Large Cap Losers Last Week (Nov. 24-Nov. 28): Are the Others in Your Portfolio?

Nov -30

Source: feeds.benzinga.com

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BURL Eyes $1.6B Operating Income by FY28 With Strategic Expansion

Nov -28

Source: zacks.com

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Terrain kicks off 6,800-metre RC drill campaign at Lightning and Wildflower prospects

Nov -28

Source: proactiveinvestors.com

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Small Cap Watch: Terrain Minerals, Asian Battery Metals, Altech Batteries, Aurum Resources

Nov -28

Source: proactiveinvestors.com

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FIVE AT FIVE: Bookies howling, Boohoo strutting, with the Footsie was in the slow lane

Nov -27

Source: proactiveinvestors.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.69%)

6. Segments

Accessories and Shoes

Expected Growth: 10%

Burlington Stores, Inc.'s Accessories and Shoes segment growth is driven by increasing off-price demand, effective inventory management, and strategic store expansions. Additionally, the company's focus on private label brands, competitive pricing, and enhanced customer experience contribute to the 10% growth rate.

Ladies Apparel

Expected Growth: 12%

Burlington Stores' Ladies Apparel segment growth of 12% is driven by increasing demand for affordable and trendy clothing, effective off-price business model, strategic store expansion, and strong inventory management. Additionally, the company's focus on private label brands, e-commerce growth, and competitive pricing also contribute to the segment's growth.

Home

Expected Growth: 9%

Burlington Stores' Home segment growth is driven by increasing demand for off-price home decor and furniture, expansion of e-commerce capabilities, and strategic store remodels. Additionally, the company's focus on offering high-quality products at discounted prices, effective inventory management, and strong vendor relationships contribute to its 9% growth.

Mens Apparel

Expected Growth: 11%

Burlington Stores, Inc.'s 11% growth in Mens Apparel is driven by increasing demand for affordable, high-quality clothing, effective off-price business model, strategic store expansion, and strong inventory management. Additionally, the company's focus on private label brands, such as Burlington and MXD, contributes to its growth.

Kids Apparel and Baby

Expected Growth: 13%

Burlington Stores' Kids Apparel and Baby segment growth of 13% is driven by increasing demand for affordable, high-quality products, effective inventory management, and strategic store expansions. Additionally, the company's off-price model, which offers customers a treasure hunt experience, contributes to the segment's growth. Furthermore, the rise of online shopping and investments in e-commerce capabilities also support the segment's expansion.

Outerwear

Expected Growth: 8%

Burlington Stores' Outerwear segment growth of 8% is driven by increasing demand for affordable and trendy winter apparel, particularly among budget-conscious consumers. Additionally, the company's off-price business model, which offers high-quality products at discounted prices, resonates with price-sensitive customers. Furthermore, Burlington's strategic store expansion and effective inventory management also contribute to the segment's growth.

7. Detailed Products

Women's Apparel

Burlington Stores, Inc. offers a wide range of women's apparel, including tops, bottoms, dresses, outerwear, and more from popular brands and designers.

Men's Apparel

Burlington Stores, Inc. provides a variety of men's apparel, including casual wear, dress wear, outerwear, and accessories from well-known brands.

Kids' Apparel

Burlington Stores, Inc. offers a broad selection of kids' apparel, including clothing, shoes, and accessories for boys and girls from popular brands.

Home Goods

Burlington Stores, Inc. sells a wide range of home goods, including bedding, kitchenware, decorative items, and more from popular brands.

Accessories

Burlington Stores, Inc. offers a variety of accessories, including handbags, shoes, hats, scarves, and jewelry from popular brands.

Coats and Jackets

Burlington Stores, Inc. provides a broad selection of coats and jackets for men, women, and kids from popular brands.

Shoes

Burlington Stores, Inc. sells a wide range of shoes for men, women, and kids, including boots, sneakers, sandals, and more from popular brands.

8. Burlington Stores, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Burlington Stores, Inc. operates in the off-price apparel and home goods retail industry, where substitutes are limited. However, customers may choose to shop at other off-price retailers or online marketplaces, posing a moderate threat.

Bargaining Power Of Customers

Burlington Stores, Inc. operates in a highly competitive industry, but customers have limited bargaining power due to the company's off-price business model, which offers low prices and a wide selection of products.

Bargaining Power Of Suppliers

Burlington Stores, Inc. sources products from a diverse range of suppliers, which reduces dependence on individual suppliers. However, suppliers may still exert some bargaining power due to the company's reliance on them for high-quality products.

Threat Of New Entrants

The off-price apparel and home goods retail industry has high barriers to entry, including significant capital requirements and the need for a large and complex supply chain. This limits the threat of new entrants.

Intensity Of Rivalry

The off-price apparel and home goods retail industry is highly competitive, with several established players competing for market share. Burlington Stores, Inc. faces intense rivalry from companies like TJX Companies and Ross Stores.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.29%
Debt Cost 3.95%
Equity Weight 35.71%
Equity Cost 11.62%
WACC 6.69%
Leverage 180.06%

11. Quality Control: Burlington Stores, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Burlington Stores

A-Score: 3.8/10

Value: 2.0

Growth: 5.9

Quality: 4.7

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

269.58$

Current Price

269.58$

Potential

-0.00%

Expected Cash-Flows