Burlington Stores: Strong Earnings and Strategic Positioning Justify Buy Rating Despite Short-Term Challenges

William Blair analyst Dylan Carden has maintained their bullish stance on BURL stock, giving a Buy rating on May 27.

Dylan Carden has given his Buy rating due to a combination of factors that highlight Burlington Stores’ potential for growth and profitability. Despite a slight miss in sales expectations for the first quarter, the company demonstrated strong earnings performance, driven by better operating expense leverage and an increase in gross margin. This was partly due to a favorable shift in the timing of expenses, which allowed Burlington to exceed earnings per share expectations by 12%.
Burlington’s management reaffirmed its full-year guidance, projecting sales growth between 6% to 8% and an expansion in adjusted EBIT margin. The company’s strategic positioning in the off-price retail segment, coupled with the potential removal of tariff-related headwinds, supports a positive outlook. Although there are short-term challenges, such as potential disruptions from tariffs and expense timing shifts, the overall guidance and market conditions suggest a promising trajectory for Burlington Stores, justifying the Buy rating.

In another report released on May 27, UBS also reiterated a Buy rating on the stock with a $390.00 price target.

Based on the recent corporate insider activity of 63 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of BURL in relation to earlier this year.