Markets

Why Burlington Stores Stock Jumped 17% in Early Trading Today

What happened

Share of off-price clothing retailer Burlington Stores (NYSE: BURL) rose just shy of 17% in the first hour of trading on March 4. The big news was earnings, which showed continued improvement from the worst of the coronavirus pandemic hit.

So what

Burlington's top line was 4% higher year over year in the fourth quarter while same store sales were flat. That's pretty good given the difficult backdrop in 2020. To provide a little context, the retailer's full-year sales were lower by 21%. Earnings for the fourth quarter came in at $2.33 per share. Impressively, Burlington managed to beat Wall Street expectations on the top and bottom lines during the final stanza of the year.

Two people with shopping bags standing in a mall.

Image source: Getty Images.

So there was a good reason for the investor excitement here. But there's even more to the story. The company noted that sales improved monthly between November and January, with January showing double-digit growth. That is a very pleasing trend that hints that the worst may be past. Also, the company announced that it is increasing its long-term store count goal from 1,000 to 2,000, with plans for around 75 net new stores in 2021. In other words, Burlington remains pretty positive about the future. Investors appear to be too, based on the stock's price action.

Now what

CEO Michael O'Sullivan noted that Burlington Stores sees "significant market share opportunity" ahead, even though "the retail environment is likely to remain unpredictable for some time." Still, based on the fourth-quarter results and monthly sales trends, it looks like the company is managing through this unpredictable period fairly well at this point. It's hardly surprising that investors would find this quarter's update exciting.

10 stocks we like better than Burlington Stores
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Burlington Stores wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of February 24, 2021

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BURL

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More