8 High Growth Retail Stocks That Are Profitable in 2024

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

5-Year Net Income Growth: 0.22%

5-Year Revenue Growth: 8.13%

TTM Net Income: $428.28 million

Number of Hedge Funds as of Q2 2024: 42

Burlington Stores, Inc. (NYSE:BURL) is an off-price retailer that sells branded apparel, footwear, accessories, and home merchandise at low prices. It offers an elaborate array of fashion-focused, in-season merchandise. This includes ready-to-wear apparel for men and women, beauty, footwear, baby, accessories, toys, home, coats, and gifts.

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. In addition, Burlington Stores, Inc. has a third-party arrangement for the use of pool point facilities. Burlington Stores, Inc. (NYSE:BURL) operates more than 1,000 stores, principally under the name Burlington Stores.

It is running on solid fundamentals, experiencing a 13% growth in total sales in Q2 2024 compared to Q2 2023. This was on top of the 9% total sales growth versus Q2 2022. The company’s expansion strategy is working, as new stores are a crucial driver of this growth. It added 36 net new stores in Q2, ending the quarter with 1,057 locations. For 2024 as a whole, the company is on track to open 100 net new stores in addition to 30 relocations. On average, it expects its new stores to run at around $7 million in sales in their first full year.

Comp sales growth is another driver of the company’s top-line sales. Comp-store sales for Q2 2024 increased by 5% versus its guidance of flat to 2%. Burlington Stores, Inc. (NYSE:BURL) also expanded its operating margin by 160 basis points in the quarter compared to last year. The primary drivers of this expansion were lower markdowns, faster inventory turns, and faster-than-expected progress in its supply chain efficiency initiatives. The company’s well-ahead-of-planned sales growth and solid margin expansion drove strong earnings growth in Q2. The company ranks fourth on our list of the 8 high growth retail stocks that are profitable in 2024.

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.”