Burlington Stores Q3 Earnings: Can BURL Hit Its $1.41 EPS Target?

in EARNINGS/INVESTING IDEAS by

Burlington Stores, Inc. (NYSE:BURL) is scheduled to report Q3 earnings results before the U.S. stock market opens on Tuesday, November 26, 2019. Management will also hold a conference call to discuss results at 8:30 a.m. (Eastern Time).

The company is expected to report earnings of $1.41/share on revenue of $1.794 billion. The consensus earnings per share (EPS) of $1.41/share is based on a poll of 22 analysts and represents a growth of 16.1% over the same quarter last year when the company reported earnings of $1.21/share.

The revenue forecast of $1.794 billion based on a poll of 15 analysts implies a year-over-year (YoY) growth of 9.3%. Last year the company reported $1.641 billion in revenue for the quarter.

Expected to report EPS growth of $0.20/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $1,794.13 $1,640.96 9.3%
EPS $1.41 $1.21 16.1%

Earnings Call Trends

Management has a perfect record over the last 8 tracked quarters of exceeding earnings guidance. What are your expectations from Burlington Stores for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.14 $1.36 18.8% Beat
Q1, 2020 $1.25 $1.26 1.0% Beat
Q4, 2019 $2.76 $2.83 2.4% Beat
Q3, 2019 $1.06 $1.21 14.2% Beat
Q2, 2019 $0.95 $1.15 20.4% Beat
Q1, 2019 $1.09 $1.26 15.6% Beat
Q4, 2018 $2.08 $2.17 4.6% Beat
Q3, 2018 $0.66 $0.70 6.1% Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Burlington Stores’ stock price performance? It’s more important for some companies than for others.

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending August 3, 2019, the stock price reacted by increasing by 16.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-29 $173.27 $202.49 16.9% Increase
2019-05-30 $146 $156.58 7.2% Increase
2019-03-07 $167.18 $143.52 -14.2% Decline
2018-11-28 $148.56 $168.51 13.4% Increase

Fundamentals And Technical Analysis

Burlington Stores is currently trading at $208.89/share, up 1.4% for the day. The company is trading at approximately 99.8% of its 52-week high of $209.36/share. The company’s stock price is up 3.2% since the last earnings report and up 0.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 59.53 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 32.0x and a forward P/E multiple of 27.9x. Burlington Stores’ current share price also implies a price-to-book (P/B) multiple of 43.0x. The following table summarizes some other key fundamental ratios:

Data as of November 25, 2019
Metric Value
Last Fiscal Period FY2020.Q2
Period End Date August 3, 2019
Stock Price (Current) $208.89
P/E Ratio 32.0x
P/E Ratio (Fwd) 27.9x
PEG Ratio 2.3
Total Debt to Capital (%) 20.3%
Levered Free Cash Flow $365.5 million
Enterprise Value / EBITDA 22.1x

Source: Finbox

Company Profile: Burlington Stores, Inc.

Burlington Stores, Inc. is a large-cap stock with a market capitalization of $13.556 billion and a total enterprise value of $16.912 billion. The company operates in the Consumer Discretionary sector and Specialty Retail industry.

Burlington Stores, Inc. operates as a retailer of branded apparel products in the United States. The company offers fashion-focused merchandise, including women’s ready-to-wear apparel, accessories, footwear, menswear, youth apparel, coats, toys, and gifts, as well as baby, home, and beauty products. It operates 691 stores under the Burlington Stores name; 2 Cohoes Fashions stores; 2 Super Baby Depot stores; 9 MJM Designer Shoes stores; and 1 online store in 45 states and Puerto Rico.

The company was founded in 1972 and is headquartered in Burlington, New Jersey.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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