Is Burlington Stores a Good Investment?

PHOTO CREDIT: Burlington Stores

OVERVIEW

Burlington Stores Incorporation operates a brick and mortar retail company, Burlington Coat Factory. The company operates over 760 stores in over 45 states in the United States and Puerto Rico. The company sells fashion-based products in its stores alongside kitchenware, toys, and other products. The company was founded in 1972.

Why You Should?

1. Burlington Stores has an extremely strong domestic presence, with over 760 stores in the United States and Puerto Rico. This means that the company has a wide reach in the United States and Puerto Rican markets, something that lowers the company’s risks of any geopolitical issues.
2. Burlington Stores will benefit from a possible stimulus package, as the company’s main customers will have money to spend on clothes. The lack of one will negatively impact the company as customers do not have any money to spend on non-essential goods.
3. Burlington Stores reports some of its best financial numbers during the holiday quarter. This is because customers will spend money to purchase gifts for their family and friends. Though the company will report weaker than usual holiday numbers this year, the company still looks to post a strong number. This will benefit both the company and its investor base.
4. Burlington Stores is a great reopening play. This is because after a COVID vaccine is administered, the economy will start to recover again, causing a rise in sales of retailers like Burlington Stores. This will cause the stock price to increase, benefiting both the company and its investor base.

Why You Should Not?

1. The COVID-19 Pandemic has negatively impacted Burlington Stores, as the company had to shut down some of its stores temporarily due to government regulation. Burlington Stores operates most of its stores in a mall, something which has been hammered by the COVID-19 Pandemic. This has negatively impacted the company and its investors.
2. Burlington Stores has not invested in its e-commerce platform, causing problems for the company during a time where e-commerce reigns king of retail. This lack of investment will also hurt the company in the future. I would invest in a company like Walmart or Amazon in order to take advantage of a safer and stronger business model.
3. Burlington Stores faces tough competition from other retail companies. Some of these companies include TJX, Ross, Walmart, Costco, Amazon, and many others. This tough competition will hurt the company’s future growth in some domestic markets. This will hurt both the company and its investor base.

MY OPINION

In my opinion, I think that Burlington Stores is not the best retail company to invest in due to tough competition, impacts from the COVID-19 Pandemic, and a weak e-commerce platform. However, a strong domestic presence, a possibility of a stimulus deal, an upcoming holiday season, and a good reopening stock might help the company in the future.