Burlington Stores posts 38 percent rise in Q3 earnings

Net sales increased 7.1 percent to 1,438 million dollars at Burlington Stores for the third quarter ended October 28, 2017. The company said, this growth was driven by an incremental 60 million dollars from new and non-comparable stores, as well as a 3.1 percent increase in comparable store sales. Net income increased 38 percent to 45 million dollars or 0.65 dollar per share against 0.45 dollar last year. Adjusted net income increased 34 percent to 49 million dollars or 0.70 dollar per share compared to 0.51 dollar last year.

Commenting on the third quarter results, Tom Kingsbury, CEO, stated in a statement, “We are pleased to report strong third quarter results, driven by a 3.1 percent comparable store sales increase, which was on top of a 3.7 percent comparable increase in last year’s third quarter. Our overall 7.1 percent sales growth, along with our 115 basis point adjusted EBITDA margin improvement, enabled the company to drive a 37 percent increase in Adjusted EPS in the third quarter, well ahead of our guidance.”

Fiscal 2017 Third Quarter Operating Results:

Gross margin for the quarter expanded by 100 basis points over last year’s levels to 42.2 percent driven primarily by increased merchandise margin. Improvements in net income, the company said, were driven primarily by top line growth, gross margin expansion, tight expense control, share repurchases since the end of the third quarter last year, and the 2.9 million dollars benefit or 0.04 dollar per share, from the accounting change for share-based compensation.

Adjusted EBITDA increased 22 percent or 24 million dollars above the prior year period to 134 million dollars. The 115 basis point expansion in adjusted EBITDA as a percentage of sales was primarily driven by gross margin expansion.

First nine month sales increase 6.9 percent

Total sales increased 6.9 percent, which included a comparable store sales increase of 2.4 percent on top of last year’s 4.5 percent comparable store sales increase. Net income increased 60 percent to 144 million dollars or 2.04 dollars per share against 1.25 dollars last year.

Adjusted EBITDA increased by 21 percent or 68 million dollars above last year to 398 million dollars representing a 110 basis point increase in rate for the first nine months of fiscal 2017. Adjusted net income of 157 million dollars was up 48 percent, while adjusted EPS was 2.22 dollars for the first nine month period against 1.47 dollars last year.

FY17 net sales expected to increase between 8.1 to 8.4 percent

For the fiscal year 2017, the company expects total sales to increase in the range of 8.1 percent to 8.4 percent, including 1.4 percent from the 53rd week; assuming comparable store sales to increase in the range of 2 percent to 3 percent for the fourth quarter, resulting in a full year comparable store sales increase of 2.3 percent to 2.6 percent on top of the 4.5 percent increase during fiscal 2016.

The company added that the updated total sales increase is negatively impacted by 17 million dollars caused by the 19 store closures in the third quarter, as well as approximately 25 million dollars from 8 stores that will remain closed during the fourth quarter. The company expects adjusted EPS in the range of 4.23 dollars to 4.27 dollars, utilizing a fully diluted share count of approximately 70.3 million, as compared with 3.24 dollars in fiscal 2016.

This includes an expected benefit from the 53rd week of approximately 0.04 dollar per share, and an anticipated increase of approximately 0.20 dollar per share resulting from the accounting change for share-based compensation. Adjusted EBITDA margin expansion is expected to increase 80 to 90 basis points. The company plans to open 37 net new stores, and invest net capital expenditures of approximately 215 million dollars.

For the fourth quarter of fiscal 2017, the company expects total sales to increase in the range of 11 percent to 12 percent, including 5 percent from the 53rd week. This increase includes the negative impact of 25 million dollars from the 8 stores that will remain closed during the fourth quarter. Comparable store sales are expected to increase in the range of 2 percent to 3 percent on top of a 4.6 percent.

Adjusted EPS is expected to be in the range of 2.02 dollars to 2.06 dollars. Adjusted EPS for the fourth quarter includes a 0.04 dollar benefit from the 53rd week.

Picture:Burlington Stores website