Burlington Stores reports strong Q2 performance, raises full-year guidance

Burlington Stores, Inc., a US-based off-price retailer, has announced a 10 percent increase in total sales to 2.70 billion dollars for its second quarter of fiscal year 2025. This performance follows a 13 percent increase in the same period last year. Comparable store sales also saw a 5 percent rise, building on a 5 percent gain from the second quarter of fiscal 2024.

According to the press release, the company saw "very strong margin and earnings performance." Net income was 94 million dollars, or 1.47 dollars per diluted share. Excluding certain expenses, adjusted diluted earnings per share (EPS) grew by 39 percent to 1.72 dollars.

Profitability and inventory management drive results

Gross margin as a percentage of net sales was 43.7 percent, an increase of 90 basis points year-over-year (YoY). This was driven by a 60 basis points expansion in merchandise margin, resulting from lower shortage and reduced markdowns, as well as a 30 basis points improvement in freight expense.

Selling, general and administrative (SG&A) expenses as a percentage of sales saw a slight increase of 10 basis points to 35.2 percent. However, adjusted SG&A decreased as a percentage of sales to 26.7 percent, from 27.0 percent in the prior-year period.

The company's merchandise inventories increased by 16 percent to 1.42 billion dollars at the end of the quarter. In contrast, comparable store inventories decreased by 8 percent. Reserve inventory, composed of opportunistically purchased merchandise, accounted for 50 percent of total inventory, an increase from 41 percent at the end of the second quarter of fiscal 2024.

O’Sullivan raises guidance amid ‘Burlington 2.0’ strategies

Burlington Stores chief executive officer, Michael O’Sullivan, stated that the company’s strong results are linked to its ‘Burlington 2.0’ strategies, which are in the early stages of their potential impact. Given the second quarter’s performance, the company is raising its full-year adjusted EPS guidance to a range of nine point nineteen dollars to nine point fifty-nine dollars.

For the full fiscal year, the company now expects total sales to increase in the range of 7 percent to 8 percent and comparable store sales to grow by 1 percent to 2 percent. For the third quarter of fiscal 2025, it anticipates total sales to increase in the range of 5 percent to 7 percent and comparable store sales to rise by 0 percent to 2 percent.

As of the end of the quarter, Burlington Stores had 1.69 billion dollars in liquidity, with 748 million dollars in unrestricted cash and 946 million dollars in availability on its asset-based lending facility. The company also repurchased 102,474 shares for 26 million dollars during the quarter.

This article was written with help from AI.