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Category: Stock Market and Burlington
Date: 6 March 2020 Stock Price: $218.46 We take a look at the 4th quarter earnings for their 2019 fiscal year of Burlington Stores Inc an off-price fashion retailer with over 600 stores in 35 states.
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About Burlington Stores Inc.
Burlington Stores, Inc., headquartered in New Jersey, is a nationally recognized off-price retailer with Fiscal 2018 net sales of $6.6 billion. The Company is a Fortune 500 company and its common stock is traded on the New York Stock Exchange under the ticker symbol “BURL.” The Company operated 691 stores as of the end of the second quarter of Fiscal 2019, inclusive of an internet store, in 45 states and Puerto Rico, principally under the name Burlington Stores. The Company’s stores offer an extensive selection of in-season, fashion-focused merchandise at up to 60% off other retailers' prices, including women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home and coats.
Overview of Burlington Stores' 4th quarter 2019 earnings report
The data below refers to the latest quarter's data unless specified otherwise
- Total Revenue: $2.208 billion (up from $1.998 billion from the same quarter of the previous year)
- Total revenue increased by 10.5% over the last 12 months
- Total costs and expenses: $1.937 billion (up from $1.761 billion for the same quarter of the previous year)
- Total costs and expenses increased by 9.99% over the last 12 months
- Some margin gain for Burlington Stores as revenues increased at a rate faster than their total costs and expenses
- Net income: $206.325 million (up from from $184.351 million for the same quarter of the previous year)
- Diluted earnings per share: $3.08 (up from $1.12 for the same quarter of the previous year)
- PE ratio of Burlington Store: 31.6
- Diluted weighted-average shares outstanding: 67.010 million (down -1.96% from 68.348 million for the same quarter of the previous year)
- Cash and cash equivalents: $403.074 million
- Cash and cash equivalents per share: $6.02
- Cash and cash equivalents makes up 2.75% of Burlington Stores current market capital
- Cash and cash equivalents makes up 7.2% of Burlington Stores total assets
- Inventories: $777.248 million (down from $954.183 million for the same quarter of the previous year)
- Inventories makes up 13.9% of Burlington Stores total assets
- Inventories declined by -18.5% over the last year
- Total shareholders' equity of Burlington Stores Inc.: $528.149 million
- Shareholders' equity per share: $7.88
- Burlington Stores is trading at 27.7 times its stockholders equity per share
- Accounts receivable: $91.508 million (up from $58.752 million for the same quarter of the previous year)
- Accounts receivable makes up 1.64% of Burlington Stores total assets
- Accounts receivable grew by 55.7% over the last year
- Cash generated from operations (for full fiscal 2019): $891.725 million
- Cash generated from operations per share (for full fiscal 2019): $13.30
Burlington Stores' management commentary on the results and earnings guidance
BURLINGTON, N.J., March 05, 2020 (GLOBE NEWSWIRE) -- Burlington Stores, Inc. (NYSE: BURL), a nationally recognized off-price retailer of high-quality, branded apparel at everyday low prices, today announced its results for the fourth quarter ended February 1, 2020.
Michael O’Sullivan, CEO, stated, “We are pleased with our fourth quarter results, driven by a solid 3.9% comparable store sales increase. Overall we generated a 10.5% sales increase, which resulted in a 40 basis point increase in Adjusted EBIT margin, and a 15% increase in Adjusted EPS, ahead of both our original and recently updated guidance. In addition, our inventory management made further progress during the fourth quarter, as our comparable store inventory decreased 15%, putting us in a very opportunistic inventory position as we enter Fiscal 2020.”
Inventory
Michael O’Sullivan, CEO, stated, “We are pleased with our fourth quarter results, driven by a solid 3.9% comparable store sales increase. Overall we generated a 10.5% sales increase, which resulted in a 40 basis point increase in Adjusted EBIT margin, and a 15% increase in Adjusted EPS, ahead of both our original and recently updated guidance. In addition, our inventory management made further progress during the fourth quarter, as our comparable store inventory decreased 15%, putting us in a very opportunistic inventory position as we enter Fiscal 2020.”
Inventory
- Merchandise inventories were $777 million vs. $954 million last year. The decrease was due primarily to a 15% decrease in comparable store inventory at the end of Fiscal 2019, as well as a decrease in pack and hold inventory, which was 26% of total inventory at the end of Fiscal 2019 compared to 30% at the end of Fiscal 2018.
- On February 26, 2020, the Company completed the repricing of its senior secured term loan facility, which reduced the applicable interest rate margin from 2.00% to 1.75%, in the case of LIBOR loans, with the LIBOR floor remaining 0.00%. The senior secured term loan facility is comprised of a single tranche of loans that continue to have a maturity date in November 2024.
- During the fourth quarter, the Company repurchased 375,529 shares of its common stock for $83 million. As of the end of the fourth quarter, the Company had $399 million remaining on its current share repurchase authorization.
Full Year Fiscal 2020 and First Quarter 2020 Outlook
For Fiscal 2020 (the 52-weeks ending January 30, 2021), the Company expects:
For the first quarter of Fiscal 2020 (the 13 weeks ending May 2, 2020), the Company expects:
For Fiscal 2020 (the 52-weeks ending January 30, 2021), the Company expects:
- Total sales to increase in the range of 8% to 9%, on top of an approximately 9% increase in Fiscal 2019; this assumes comparable store sales to increase in the range of 1% to 2%, on top of the approximately 3% increase during Fiscal 2019;
- Depreciation and amortization, exclusive of favorable lease costs, to be approximately $235 million;
- Adjusted EBIT margin rate to be approximately flat versus last year;
- Net interest expense of approximately $45 million;
- An effective tax rate of approximately 21%;
- To open 54 net new stores, and invest approximately $400 million in Capital Expenditures, net of landlord allowances; and
- Adjusted EPS in the range of $7.97 to $8.12, utilizing a fully diluted share count of approximately 66.6 million, as compared to Fiscal 2019 net income per share of $6.91 and Fiscal 2019 Adjusted EPS of $7.41. This outlook excludes an expected $0.16 per share impact of management transition costs.
For the first quarter of Fiscal 2020 (the 13 weeks ending May 2, 2020), the Company expects:
- Total sales to increase in the range of 8% to 9%, on top of an approximately 7% increase in the first quarter of Fiscal 2019; this assumes comparable store sales to increase in the range of 1% to 2%, on top of the approximately 0% increase in the first quarter of Fiscal 2019;
- An effective tax rate of approximately 15%; and
- Adjusted EPS in the range of $1.29 to $1.34, which assumes a fully diluted share count of approximately 66.8 million, as compared to Fiscal 2019 first quarter net income per share of $1.15 and Fiscal 2019 first quarter Adjusted EPS of $1.26. This outlook excludes an expected $0.04 per share impact of management transition costs.
Burlington Stores Inc (NYSE: BURL) stock price history
The image below obtained from Google, shows the stock price history of Burlington Stores Inc. over the last 5 years. And its been a pretty good time for Burlington stockholders with it increasing significantly over the last 5 years. 5 years ago the stock price of Burlington Stores was around $56.10 a stock and currently its trading at $218.46 a stock. That's a very strong return of 289.4% provided to Burlington Stores Inc over the last 5 years. And no investor will say no to those kinds of returns.
The stock is also trading at a lot closer to its 52 week high of $250.89 than it is to its 52 week low of $136.30, which is a clear indication that the short term sentiment and momentum of the stock is positive.
The stock is also trading at a lot closer to its 52 week high of $250.89 than it is to its 52 week low of $136.30, which is a clear indication that the short term sentiment and momentum of the stock is positive.
Recent coverage of Burlington
The extract below covers the latest regarding Burlington as obtained from TheStreet.com
The age of reason is over as stock fundamentals take a backseat to the media noise surrounding stocks, Jim Cramer told Action Alerts PLUS members who tuned into his monthly members-only call. It was an odd year for trading, and despite multiple all-time highs set in 2019 by all three major indexes, Jim Cramer said he sees 2020 as being an even more volatile year for stocks as the presidential election cycle heats up and issues with China come to the fore.
“For as long as I have been buying and selling stocks, I have had to hear that stocks take into account all available information and are priced accurately. But 2019 will go down as the year that such a thesis was revealed as out of date and lacking in both relevance and, yes, truth. 2020 will mean more of the same,” Cramer warned. Burlington Stores (BURL) was the victim of one of the worst tariff-related retail selloffs earlier this year since retailers tend to trade in lockstep with one another on negative tariff news. Jim Cramer and the Action Alerts PLUS team watched in disbelief as the stock, in which they have a firm belief, was “eviscerated” in the selloff. Then the team watched as the company’s strong quarter brought the stock back to where it was supposed to be.
Read the full article here
The age of reason is over as stock fundamentals take a backseat to the media noise surrounding stocks, Jim Cramer told Action Alerts PLUS members who tuned into his monthly members-only call. It was an odd year for trading, and despite multiple all-time highs set in 2019 by all three major indexes, Jim Cramer said he sees 2020 as being an even more volatile year for stocks as the presidential election cycle heats up and issues with China come to the fore.
“For as long as I have been buying and selling stocks, I have had to hear that stocks take into account all available information and are priced accurately. But 2019 will go down as the year that such a thesis was revealed as out of date and lacking in both relevance and, yes, truth. 2020 will mean more of the same,” Cramer warned. Burlington Stores (BURL) was the victim of one of the worst tariff-related retail selloffs earlier this year since retailers tend to trade in lockstep with one another on negative tariff news. Jim Cramer and the Action Alerts PLUS team watched in disbelief as the stock, in which they have a firm belief, was “eviscerated” in the selloff. Then the team watched as the company’s strong quarter brought the stock back to where it was supposed to be.
Read the full article here
Burlington Stores Inc. (NYSE: BURL) latest stock valuation
So what are Burlington Stores Inc. stock worth based on their latest earnings report and the fiscal guidance provided for their 2020 fiscal year? Our valuation models gives a target price (full value price) of $161.10 per Burlington Stores Inc. stock (up slightly from our 3rd quarter 2019 earnings review valuation for Burlington Stores). We therefore feel the stock of Burlington Stores is overvalued
We usually recommend that long term fundamental or value investors to enter a stock at least 10% below our target price (full value price) which in this case is $161.10 So a good entry point would be around $145 or below. We expect to see the stock of Burlington Stores to pull back from current levels to closer to our target price in coming weeks and months.
Since the stock of Burlington Stores is trading at well above our suggested entry point we rate the stock as a sell
We usually recommend that long term fundamental or value investors to enter a stock at least 10% below our target price (full value price) which in this case is $161.10 So a good entry point would be around $145 or below. We expect to see the stock of Burlington Stores to pull back from current levels to closer to our target price in coming weeks and months.
Since the stock of Burlington Stores is trading at well above our suggested entry point we rate the stock as a sell
The next earnings release of Burlington Stores
It is expected that Burlington Stores will release their 1st quarter 2020 earnings report towards in early June 2020