Returns Should Stabilize as Burlington Bolsters Its Merchandising, Inventory Management Capabilities

With the pandemic giving way to economic uncertainty and inflation, Burlington faces a complex near-term environment that has been complicated by its ongoing turnaround efforts. The chain continues to optimize its merchandising efforts, bolster its assortment, and modernize its store footprint, efforts that we believe should deliver long-term benefits at the expense of near-term volatility. Burlington should fare reasonably well as economic uncertainty rises. The off-price sector has performed well in adverse economic conditions historically (Ross and TJX saw low- to mid-single-digit percentage comparable growth in 2008-09), and we expect Burlington to fare better than full-price retailers.