7. Burlington Stores, Inc. (NYSE:BURL)
No. of Hedge Funds as of Q2 2024: 42
Burlington Stores (NYSE:BURL) is an off-price retailer selling branded apparel, accessories, footwear, and house merchandise at discounted prices every day. Its stores offer an elaborate collection of fashion-focused, in-season merchandise, including women’s ready-to-wear apparel, youth apparel, menswear, beauty, footwear, accessories, coats, and others.
The company operates through five distribution centers, two of which are located on the East Coast in New Jersey and three on the West Coast in California. These five centers occupy an aggregate of around 4.10 million square feet and offer processing, storage, and shipping capabilities. The company also has third-party arrangements for the use of pool point facilities. It operates more than 1,000 stores.
Burlington Stores (NYSE:BURL) experienced a 13% total sales growth compared to a 9% sales growth in 2023. When considered on a compound basis, the company is now 24% bigger than two years ago, highlighting its solid expansion and growth trajectory. It opened 36 net new stores in Q2 2024, and relocated four of its older oversized locations. That brings the total number of new stores opened for the fiscal year-to-date to 50, along with 15 additional relocations. The company has plans to open 100 new stores and relocate 30 others for the year as a whole. It expects its new stores to run around $7 million in sales in their first full year, further solidifying the company’s market presence and boosting sales.
Total sales in Q2 2024 grew by 13% as compared to Q2 2023, with new stores being the primary driver of this growth. Comp sales growth is another key driver of top-line sales. Comp-store sales grew by 5%, surpassing guidance of flat to 2%. The company also expanded its operating margin and gross margin, driven by lower markdowns and faster inventory turns. In addition, its faster-than-expected supply chain efficiency initiatives also drove 60 basis points of leverage in the supply chain. Burlington Stores is now focusing its attention on delivering greater value across income bands and demographics.
42 hedge funds hold stakes in the stock, with Citadel Investment Group holding the highest stakes worth $284.22 million as of Q2 2024. It takes the seventh spot on our list of the best fashion stocks.
ClearBridge SMID Cap Growth Strategy stated the following regarding Burlington Stores, Inc. (NYSE:BURL) in its fourth quarter 2023 investor letter:
“Interest rate relief also had a strong impact on more cyclical companies and those with ties to general consumer spending. For example, consumer discretionary holdings and discount retailers Burlington Stores, Inc. (NYSE:BURL) and Five Below both rose during the quarter thanks to improving outlooks. Five Below, a specialty value retailer for products including apparel, accessories, novelty items, décor, cosmetics and accent furniture, rebounded from being one of the third quarter’s worst-performing stocks. We believe both Five Below and Burlington are particularly well-positioned for an economic environment where consumer budgets are being tightened but demand for discretionary goods remains stable.”
