10 Best Retail Stocks To Invest In

6. Burlington Stores, Inc. (NYSE:BURL)

Number of Hedge Fund Holders: 51

Burlington Stores Inc. (NYSE:BURL) is an off-price retailer of branded apparel. It also sells accessories, footwear, and home merchandise for relatively lower prices. The company operates more than 1000 stores, primarily under the brand name Burlington Stores.

Total sales for the company grew by 11% in fiscal Q3 2024, on top of 12% sales growth last year. The primary driver of growth for the company’s fiscal Q3 2024 earnings was its new store opening program. It is on the path to end 2024 with 101 net new stores.

However, the unseasonably warm temperature significantly impacted Burlington Stores Inc.’s (NYSE:BURL) comparable sales trend in fiscal Q3 2024. It reported healthy sales in its back-to-school season, one of the primary drivers of sales in Q3. However, the positive sales trend dropped from mid-September onwards. According to the company, the primary reason behind this impact was that its consumers still consider it a coat company.

Despite this headwind, Burlington Stores Inc. (NYSE:BURL) employed its conservation plan to keep tight control over its receipts and liquidity, reacting quickly to the warmer temperature. The company expects to regain its sales growth in the holiday season and the coming of winter. It ranks sixth on our list of the 10 best retail stocks to invest in.

Argosy Investors made the following comment about Burlington Stores, Inc. (NYSE:BURL) in its Q3 2023 investor letter:

“Burlington Stores, Inc. (NYSE:BURL) participates in the off-price retail category and competes against well-known players such as TJ Maxx and Ross Stores. BURL recently suffered from an inventory overhang that dented margins and is also suffering from a slowdown in same-store sales. With that said, the company has the capacity to double its stores, double its margins to levels consistent with peers, and expand same-store sales growth. On normalized margins, which the company last achieved in fiscal 2019, BURL is trading at ~10x earnings, with the potential to grow top-line low double digits, increase bottom line mid-teens, and increase EPS high teens over time.”