BURL Eyes $1.6B Operating Income by FY28 With Strategic Expansion

Burlington Stores, Inc. BURL announced its long-term objective of achieving roughly $1.6 billion in operating income by fiscal 2028. On the third-quarter fiscal 2026 earnings call, management stated that the company is progressing in line with internal expectations and remains encouraged by the results achieved to date. The plan is built on strengthening profitability, expanding store growth and maintaining disciplined operating execution.

Margin improvement continues to be a central pillar of the strategy. For fiscal 2025, Burlington now expects adjusted EBIT margin expansion of 60-70 basis points, significantly ahead of the initial forecast. At the high end of guidance, the company will have achieved 170 basis points of the 400-basis-point expansion opportunity originally identified two years ago, demonstrating notable progress despite tariff-related headwinds. 

Another driver behind the long-term plan is accelerated store expansion. Burlington now expects to open at least 110 net new stores in fiscal 2026, reflecting strong performance from recently opened stores and the availability of attractive real estate opportunities, including leases acquired through the Joann Fabrics bankruptcy. This expansion is expected to support high single-digit total sales growth and add meaningful scale benefits.

Short-term sales performance has faced some challenges. Management noted that store traffic declined in the fiscal third quarter despite stronger conversion and higher basket sizes. Burlington’s reliance on seasonal merchandise and weather-driven demand increases exposure to potential consumer spending weakness, especially among its core lower-income shoppers. 

While short-term fluctuations persist, Burlington’s steady margin growth, robust new-store pipeline and resilient off-price demand create a strong foundation for achieving its fiscal 2028 operating income target. Sustained operational discipline and consistent execution position the company well to reach its long-term financial objectives.

Burlington’s Price Performance, Valuation & Estimates

BURL stock has gained 14.5% in the past six months compared with the industry’s 0.8% growth.

Burlington’s forward 12-month price-to-sales ratio of 1.33X indicates a lower valuation compared with the industry’s average of 1.68X. BURL carries a Value Score of A.

The Zacks Consensus Estimate for Burlington’s current fiscal-year sales and earnings per share implies year-over-year growth of 7.8% and 16.5%, respectively. Earnings estimates for fiscal 2025 and 2026 have been upbound by 10 cents and 1 cent per share, respectively, in the past seven days.

Burlington currently carries a Zacks Rank #3 (Hold).

Key Picks

We have highlighted three better-ranked stocks, namely, FIGS Inc. FIGS, Boot Barn Holdings, Inc. BOOT and American Eagle Outfitters Inc. AEO.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales indicates growth of 400% and 7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently carries a Zacks Rank of 2 (Buy). 

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales indicates declines of 35.1% and 0.1%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 30.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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