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Burlington Stores (BURL) - Get Burlington Stores, Inc. Report shareholders couldn't have asked for much more.

On Thursday morning, ahead of the opening bell, the New Jersey-based retailer delivered an all-around beat and vastly improved guidance for the current year. The encouraging financial results were a reflection of strong comparable sales leading to higher profitability due to gains of scale, along with competent inventory management that allowed gross margins to remain stable despite rich freight and wage costs.

Strength Across the Board

It was hard to find a single area of weakness in Burlington's numbers. Total revenue of $1.66 billion increased by an impressive 10.5% on top of similar growth experienced last year. As anticipated in my earnings preview, the bulk of the upside was driven by a higher store count, as Burlington continues to execute diligently on its footprint expansion plans.

Comps of 3.8%, however, probably deserve to be credited for the top-line beat compared to expectations. A number of product categories, including home, toys, beauty, athletic men's and children's apparel performed strongly, with the women's department likely lagging, as has been the case across the sector lately. Units per transaction increased while store traffic was up slightly, suggesting a well-balanced mix of strong revenue growth drivers.

Another pleasant surprise was that gross margins remained largely flat year over year, enabled by lower markdowns and inventory shortage. The trend will probably continue to improve in the second half of the year, since the upside from successful freight contract negotiation should be captured over time, as inventory turns.

Looking forward, earnings growth opportunities continue to look promising. Not only will new store openings add fuel to the top line, remodeling of existing locations should help to keep comps afloat. In addition, Burlington's market share of the ladies apparel business continues to be low, but should improve over time. Lastly, margins should expand at a steady pace, fueled by operating leverage and possibly by supply chain costs easing a bit in the next couple of quarters. 

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The dynamic above seems to be reflected in the company's 2019 outlook that now anticipates adjusted EBIT margin to be up as much as 10 basis points, and earnings per share to end up roughly 20 cents above management's previous guidance communicated three months ago.

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Bullishness Reinforced

Second quarter results certainly impressed. Burlington delivered a powerful combination of strong same-store sales and inorganic growth, margin expansion and cash return to shareholders in the form of share buybacks that led to an impressive EPS increase of nearly 20% over 2018 levels.

But the bull case for owning this stock goes beyond the company's quarter-by-quarter financial performance. In addition to rewarding investors during periods of economic expansion, which has been the case since the company went public in 2013, I believe shares will likely fare much better than peers in the retail sector during periods of distress as a result of the off-price model that appeals to consumers in both good and bad spending environments.

With second quarter results in the bag and the foreseeable future looking promising, Burlington Stores seems to be a great stock to own at current levels.

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The author has no positions in any stocks mentioned in this article.