1Q26 Earnings Review

研报英文原文证据摘录

1Q26 Earnings Review

Investment Thesis

Burlington has notable opportunities in square footage growth, comp sales growth and operating margin expansion, especially vs.

its peer group. Despite its admirable square footage growth, Burlington (which ended 1Q26 at 1,242 stores) remains the smallest,

least productive and the least profitable of its off-price peer group. Burlington appears poised to generate low double-digit average

annual sales growth over the next five years driven by new store openings and comp store sales growth (expected at the mid-CONSUMER single-digit level). Burlington has laid out its growth plan which includes plans to open approximately 500 net new stores from

2024 to 2028, with the potential to expand its store base to 2,000. While we continue to see significant opportunity for sales and

earnings growth for Burlington, we believe better value exists with the other off-price operators at these levels. Trading at 21.8x

P/E, we would like to see more consistent results and better execution to justify the premium multiple.RETAIL While we continue to hold a favorable outlook for the off-price sector and appreciate the operational opportunity under CEO

Michael O’Sullivan, we are Neutral on BURL, largely due to valuation and a desire to see better, more consistent execution.

Upcoming Catalysts Price PerformanceEQUITY

■ Increased demand in off-price retailers would likely benefit BURL. $360

■ BURL will report 2Q earnings in August. $340

■ Continued gains from localization, supply chain productivity, and store fleet $320

optimization driving occupancy leverage and margin expansion would likely show $300

upside in the stock. $280RESEARCH $260

$240

Base Case Assumptions $220

■ Our base case includes comps of 2.8% in 2Q26 and higher gross and operating $200