IBD Stock Analysis
- Burlington Stores stock is near a 339.38 buy point.
- The new base follows a strong run that started late last year.
- The relative strength line is also not far from highs.
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:14PM EDT on
The company — which sells clothing, footwear and home goods — has said that pent-up demand has helped financial results.
But the chain faces easy comparisons after the coronavirus pandemic temporarily closed its stores last year and a jammed-up global supply chain inflated shipping costs.
The stock’s relative strength line is also not far from highs. However, the line (which compares a stock’s performance with that of the S&P 500) has largely moved sideways since March.
The retail chain reported first-quarter earnings and sales in May that beat expectations. Same-store sales rose 20% compared with the first quarter of fiscal 2019.
CEO Michael O’Sullivan attributed the results to “stimulus checks, the pace of the vaccine rollout, and pent-up consumer demand.” Burlington did not provide a full-fiscal-year financial outlook for sales or earnings at that time, citing the uncertainty surrounding the pace of the economy’s recovery. Burlington stock fell slightly afterward.
O’Sullivan in May said the second quarter was “off to a good start.” But he noted that “expense headwinds in supply chain and freight have continued to deteriorate.” That trend, he said, would likely hurt operating margins for the rest of the year.
Burlington stock, like other companies, has faced higher freight costs, as demand for goods strains ports and the nation’s shipping and distribution networks.
More broadly, the pace of vaccinations in the U.S. has slowed. Concerns have also grown about the spread of the Delta variant of the coronavirus in unvaccinated parts of the country.
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