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On Friday, BMO Capital Markets maintained a positive outlook on Burlington Stores (NYSE:BURL), reiterating an Outperform rating and a price target of $293.00. The retail company reported fourth-quarter earnings that surpassed expectations, attributed to higher-than-anticipated sales, a slight improvement in gross margin (GM) due to reduced freight and merchandise costs, and effective selling, general, and administrative (SG&A) expense management.
Burlington’s management provided guidance for the future that was below analyst expectations. During the earnings call scheduled for 8:30 AM, further insights were anticipated, particularly regarding quarter-to-date performance. InvestingPro analysis reveals that 7 analysts have recently revised their earnings expectations downward for the upcoming period, though the company is still expected to remain profitable. In their press release, management acknowledged the uncertainty of the 2025 outlook but expressed confidence in the resilience of the off-price business model during challenging times.
The company’s share price in pre-market trading reflected a recovery to levels seen a month ago, though trading at a relatively high P/E ratio of 30.4x. This adjustment followed a period of notable underperformance in comparison to peers such as TJX Companies (NYSE:TJX) and Ross Stores (NASDAQ:ROST) over the past 30 days and year-to-date, with Burlington showing a YTD decline of 9.62%. For deeper insights into Burlington’s valuation and peer comparison, investors can access comprehensive analysis through InvestingPro’s detailed research reports.
BMO Capital’s analyst highlighted Burlington’s fourth-quarter success, which was driven by better-than-expected sales, improved gross margin from lower freight and merchandise margin, and SG&A leverage. The firm’s analysis suggests an anticipation of further details from the company’s leadership regarding their strategic approach in the current retail environment.
Investors and analysts alike were looking to the earnings call for additional commentary on current quarter trends. The management’s statement in the press release emphasized that while the outlook for 2025 is "very uncertain," they plan to manage the business with the adaptability that the off-price model provides, particularly in less predictable market conditions.
In other recent news, Burlington Stores reported a strong fourth-quarter performance for 2024, exceeding Wall Street expectations with an adjusted earnings per share (EPS) of $4.07, against a forecast of $3.76. The company reported revenue of $3.28 billion, aligning with projections, and saw comparable store sales rise by 6%, surpassing initial guidance. Looking forward, Burlington plans to open 100 net new stores in 2025, with expectations for total sales growth of 6-8% and comparable store sales growth of 0-2%. Evercore ISI analyst Michael Binetti raised the price target for Burlington Stores to $345, maintaining an Outperform rating, citing the company’s impressive fourth-quarter performance and potential for earnings per share upside. Meanwhile, Citi analysts adjusted Burlington’s price target to $340, keeping a Buy rating, highlighting the company’s strong sales results and ability to adapt to consumer trends. Burlington ended the fourth quarter with $1.8 billion in liquidity and plans for significant capital expenditures in 2025, including the purchase of key distribution centers. These developments reflect Burlington’s strategic positioning and operational execution amid a dynamic retail environment.
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