Burlington Stores Inc (BURL)

Burlington Stores Inc. (BURL): A Comprehensive Overview

Company Profile:

History and Background: Burlington Stores Inc. (BURL) was founded in 1972 as a single discount store in Burlington, New Jersey. It has grown to become one of the largest off-price retailers in the United States, with over 840 stores across 45 states and Puerto Rico. BURL focuses on offering customers a wide variety of brand-name and designer merchandise at significant discounts compared to traditional department stores.

Core Business Areas: BURL operates with a single business segment: selling apparel, footwear, accessories, and home goods in its off-price retail stores. The company procures merchandise from manufacturers, brand-name overstocks, and authorized suppliers.

Leadership & Corporate Structure:

• Executive Team: Led by Michael O'Sullivan (CEO) and Michael DeVirgilio (CFO).
• Board of Directors: 10 members, including experts in retail, finance, and technology.
• Corporate Structure: Decentralized, with regional offices and store managers having significant autonomy.

Top Products and Market Share:

Top Products: Apparel (48% of sales), Footwear (18%), Home (15%), Accessories (13%), Other (6%).

Market Share: BURL is the third-largest off-price retailer in the US, with a market share of 10% as of 2023. The off-price apparel sector is highly competitive, with TJX Companies (TJX) holding the top position (59% market share) followed by Ross Stores (ROST) at 21%.

Comparison: Compared to competitors, BURL offers a wider selection of home goods and has a stronger presence in smaller towns and rural areas. However, TJX and ROST have larger scale, stronger brand recognition, and wider geographical reach.

Total Addressable Market: The global off-price apparel market was valued at approximately $360 billion in 2022 and is expected to reach $450 billion by 2025. Within the US, the market size is estimated at $80 billion in 2023.

Financial Performance:

Revenue and Profitability: BURL's revenue has consistently grown over the past five years, reaching $7.4 billion in 2022. The company has experienced healthy profit margins, with a gross margin of 34.6% and a net income margin of 6.5% in 2022.

Earnings per Share (EPS): BURL's EPS has grown significantly over the past five years, from $4.22 in 2018 to $7.13 in 2022. The company expects continued EPS growth in the coming years.

Cash Flow and Balance Sheet: BURL boasts strong cash flow from operations and a healthy balance sheet. The company has low debt levels and maintains a solid cash position.

Dividends and Shareholder Returns:

Dividend History: BURL has a consistent history of paying dividends, with a current annual dividend yield of 1.5%. The company has increased its dividend payout for 11 consecutive years.

Shareholder Returns: Over the past five years, BURL has delivered total shareholder returns of over 120%, significantly outperforming the S&P 500 index.

Growth Trajectory:

Historical Growth: BURL has experienced consistent revenue and earnings growth over the past decade. The company has also expanded its store footprint significantly during this period.

Future Projections: BURL expects continued growth in the coming years, driven by factors such as increased consumer demand for off-price retail, expansion into new markets, and ongoing investments in technology and supply chain optimization.

Market Dynamics:

Industry Overview: The off-price retail sector is growing rapidly, fueled by factors such as increased consumer focus on value and convenience. The sector is expected to continue experiencing healthy growth in the coming years.

Company Positioning: BURL is well-positioned within the market due to its strong brand recognition, customer loyalty, and effective supply chain management. The company is constantly adapting to changing consumer preferences and technological advancements.

Competitors:

Key Competitors:

• TJX Companies (TJX)
• Ross Stores (ROST)
• Dollar General (DG)
• Five Below (FIVE)

Competitive Advantages: Wider selection of home goods, strong presence in smaller towns and rural areas.

Competitive Disadvantages: Smaller scale, weaker brand recognition compared to TJX and ROST.

Challenges and Opportunities:

Challenges:

• Supply chain disruptions due to geopolitical events.
• Increasing competition from online retailers.
• Maintaining profitability in a highly competitive market.

Opportunities: Expanding into new markets, offering exclusive private label brands, further integrating technology to enhance customer experience.

Recent Acquisitions:

BURL has not announced any significant acquisitions within the past three years.

AI-Based Fundamental Rating:

Based on an AI-based analysis of BURL's fundamentals, the stock receives a rating of 8 out of 10. This strong rating is driven by the company's consistent financial performance, healthy cash flow, and strong growth prospects. However, investors should be aware of the competitive market and potential challenges facing the company.

Sources and Disclaimers:

Information for this analysis was compiled from the following sources:

• Burlington Stores Inc. Investor Relations website: https://investors.burlington.com/
• SEC filings: https://www.sec.gov/edgar/search/
• Zacks Investment Research: https://www.zacks.com/stock/research/burl/
• Statista: https://www.statista.com/

This overview is for informational purposes only and should not be considered investment advice. Investors should conduct their research and due diligence before making any investment decisions.