Breaking News
0

Burlington Stores & 4 Other Retail Picks For A Solid Portfolio

By Zacks Investment ResearchOct 10, 2019 10:47PM ET
www.investing.com/analysis/burlington-stores--4-other-retail-picks-for-a-solid-portfolio-200472751
Burlington Stores & 4 Other Retail Picks For A Solid Portfolio
By Zacks Investment Research   |  Oct 10, 2019 10:47PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

In an ever-evolving retail landscape, Burlington Stores, Inc. (NYSE:BURL) has made multiple changes to its business model to stay relevant. It has emerged as an investor favorite, courtesy of sound fundamentals and growth efforts. The company, which started business as a coat-focused off-price retailer, is focusing on an “open to buy” off-price model. The current model is helping customers to get nationally branded, fashionable, high quality and rightly priced products.

The company is concentrating on underpenetrated categories, particularly home, beauty and gifts, in order to make the business less weather sensitive. Moreover, it is gradually expanding its store fleet. The company intends to improve operating margin and lower the gap of the same compared with its peers by augmenting sales, optimizing markdowns and effectively managing inventory.

The company has steadily increased vendor count, made technological advancements, improved its marketing approach and focused on localized assortments. All these endeavors have helped the company to post decent comparable sales, and, in turn, fueled its top-line performance.

We note that comparable store sales rose 3.8% in second-quarter fiscal 2019 compared with increase of 2.9% in the year-ago period and 0.1% in the preceding quarter. This was the 26th successive quarter of comparable store sales growth. Management now expects comparable store sales to improve 2-3% in the third quarter and 2-2.5% in fiscal 2019.

The company has been doing quite well on the revenue front. In the second quarter of fiscal 2019, the top line grew 10.5%, following an increase of 7.3% in the preceding quarter. Management now expects total sales to improve 8.5-9.5% in the third quarter and 8.8-9.3% in fiscal 2019.

Buoyed by the above-mentioned factors, shares of this NJ-based company have advanced 21.3% so far in the year. This Zacks Rank #2 (Buy) stock has also comfortably outperformed the Retail-Wholesale sector and the S&P 500 Index that gained 16.6% and 16%, respectively, in the said period.

Why the Retail Sector?

A buoyant consumer environment, given a favorable job scenario, and a steady rise in disposable income are working in favor of retailers. For sure, retailers are making prudent investment decisions, focusing on cost containment, enhancing omni-channel capacities, introducing brands, refurbishing stores and expanding same-day delivery options.

Undoubtedly, the sector’s prospects are closely tied to the purchasing power of consumers. Well consumers remain in good shape as of now, courtesy of a solid job market as evident from the 50-year low unemployment rate of 3.5% in September. Further, the economy added a modest 136,000 jobs last month. Moreover, the data for the month of August was revised up to 168,000 from the previously reported 130,000 jobs created. We believe that a sturdy labor market is likely to encourage consumer spending.



4 Prominent Picks

Sonic Automotive, Inc. (NYSE:SAH) , an automotive retailer, is an attractive option. The stock has a VGM Score of A and a long-term earnings growth rate of 3%. This Zacks Rank #1 (Strong Buy) company delivered average positive earnings surprise of 29.5% in the trailing four quarters. Moreover, the Zacks Consensus Estimate for its current-year earnings indicates year-over-year improvement of 32.2%. We note that the stock has more than doubled year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zumiez Inc. (NASDAQ:ZUMZ) , which operates as a specialty retailer of apparel, footwear, accessories, and hardgoods, is a solid bet with a long-term earnings growth rate of 12%. This Zacks Rank #1 company has an average positive earnings surprise of 60.9% in the trailing four quarters. Moreover, the Zacks Consensus Estimate for its current-year earnings suggests year-over-year improvement of 20.7%. The stock with a VGM Score of A has advanced 59.1% so far this year.

Investors can also count on Target Corporation (NYSE:TGT) , which offers beauty and household essentials, food assortments, apparel and home decor products. This Zacks Rank #2 company has a long-term earnings growth rate of 7.1% and a VGM Score of A. It has soared 67.3% so far in 2019. Moreover, the company has an average positive earnings surprise of 4.6% for the trailing four quarters. Further, the Zacks Consensus Estimate for its current-year earnings suggests year-over-year improvement of 14.1%.

You can also consider Walmart Inc. (NYSE:WMT) , an operator of supercenters, supermarkets, hypermarkets and warehouse clubs, with a Zacks Rank #2 (Buy) and a VGM Score of B. The company has an average positive earnings surprise of 6.7% in the trailing four quarters. Moreover, the Zacks Consensus Estimate for its current-year earnings suggests improvement of a penny on a year-over-year basis. We note that the stock with long-term earnings growth rate of 4.7% has rallied 28.4% year to date.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>



Sonic Automotive, Inc. (SAH): Free Stock Analysis Report

Zumiez Inc. (ZUMZ): Free Stock Analysis Report

Burlington Stores, Inc. (BURL): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

Original post

Zacks Investment Research
Burlington Stores & 4 Other Retail Picks For A Solid Portfolio
 
Burlington Stores & 4 Other Retail Picks For A Solid Portfolio

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email