Burlington Stores, Inc. (NYSE: BURL)

Sector: Consumer Cyclical Industry: Apparel Retail CIK: 0001579298
Market Cap 18.26 Bn
P/B 11.95
P/E 32.57
P/S 1.63
ROIC (Qtr) 8.35
Div Yield % 0.00
Rev 1y % (Qtr) 7.10
Total Debt (Qtr) 5.94 Bn
Debt/Equity (Qtr) 3.89

About

Burlington Stores, Inc., known by its stock symbol BURL, is a prominent player in the retail industry, specializing in the sale of high-quality, branded merchandise at affordable prices. The company's business activities revolve around a chain of retail stores that offer a diverse range of products, from women's and men's apparel to home goods and toys. Burlington's unique selling proposition lies in its ability to provide customers with a thrilling shopping experience, akin to a treasure hunt. The company achieves this by procuring products directly...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 837.03M provides exceptional 11.80x coverage of interest expenses 70.91M, showing strong debt service capability.
  • Robust tangible asset base of 9.31B provides 20.29x coverage of working capital 458.83M, indicating strong operational backing.
  • Operating cash flow of 837.03M fully covers other non-current liabilities 346.54M by 2.42x, showing strong long-term stability.
  • Tangible assets of 9.31B provide robust 14.12x coverage of other current liabilities 659.56M, indicating strong asset backing.
  • Cash reserves of 584.08M provide solid 1.69x coverage of other non-current liabilities 346.54M, indicating strong liquidity.

Bear case

  • Operating cash flow of 837.03M barely covers its investment activities of (1.18B), with a coverage ratio of -0.71, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of (321.52M) provides weak coverage of capital expenditures of 1.16B, with a -0.28 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 816.64M show weak coverage of depreciation charges of 369.70M, with a 2.21 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (321.52M) represents just -0.99x of debt issuance 323.83M, suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 369.70M relative to operating cash flow of 837.03M, which is 0.44x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Apparel Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TJX Tjx Companies Inc /De/ 175.80 Bn 34.34 2.98 13.19 Bn
2 ROST Ross Stores, Inc. 58.85 Bn 28.21 2.67 5.19 Bn
3 LULU lululemon athletica inc. 25.43 Bn 14.61 2.30 1.76 Bn
4 BURL Burlington Stores, Inc. 18.26 Bn 32.57 1.63 5.94 Bn
5 GAP Gap Inc 10.00 Bn 11.75 0.65 5.52 Bn
6 URBN Urban Outfitters Inc 7.11 Bn 14.53 1.18 1.18 Bn
7 ANF Abercrombie & Fitch Co /De/ 6.17 Bn 11.82 1.19 1.13 Bn
8 BOOT Boot Barn Holdings, Inc. 5.78 Bn 27.75 2.79 0.67 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.43 1.35
EV to Cash from Ops. EV/CFO 27.89 8.18
EV to Debt EV to Debt 3.93 4.33
EV to EBIT EV/EBIT 28.59 -60.97
EV to EBITDA EV/EBITDA 19.76 6.53
EV to Free Cash Flow [EV/FCF] EV/FCF -72.62 22.99
EV to Market Cap EV to Market Cap 1.28 2.06
EV to Revenue EV/Rev 2.09 1.11
Price to Book Value [P/B] P/B 11.95 3.23
Price to Earnings [P/E] P/E 32.57 195.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.88
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.58
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.33
Interest Coverage Int. cover (Qtr) 11.52 13.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -62.06 -5.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -31.91 89.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 17.52 13.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 13.00 -16.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 14.74 10.85
EBT Growth (1y) % EBT 1y % (Qtr) 16.35 6.10
EPS Growth (1y) % EPS 1y % (Qtr) 20.57 10.94
FCF Growth (1y) % FCF 1y % (Qtr) -257.71 -129.32
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 7.82 -1.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.17 1.40
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.27 0.38
Current Ratio Curr Ratio (Qtr) 1.21 1.59
Debt to Equity Ratio Debt/Equity (Qtr) 3.89 1.31
Interest Cover Ratio Int Coverage (Qtr) 11.52 13.58
Times Interest Earned Times Interest Earned (Qtr) 11.52 13.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.60 2.72
EBIT Margin % EBIT Margin % (Qtr) 7.29 -1.70
EBT Margin % EBT Margin % (Qtr) 6.66 -2.76
Gross Margin % Gross Margin % (Qtr) 43.70 40.52
Net Profit Margin % Net Margin % (Qtr) 5.00 -4.02