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Yahoo
30-05-2025
- Business
- Yahoo
Can Burlington's Profit Levers Deflect Tariff Impact? Analysts Weigh In
Burlington Stores, Inc. (NYSE:BURL) shares are trading slightly higher on Friday. On Thursday, the company reported first-quarter adjusted earnings per share of $1.60, beating the analyst consensus estimate of $1.41. Quarterly sales of $2.50 billion missed the Street view of $2.52 billion. The company's CEO, Michael O'Sullivan, stated that while tariffs are expected to significantly impact merchandise margins, he is confident the company can offset this pressure in other areas of the profit and loss statement, provided tariffs do not rise beyond current are the key analysts' views on the company: Telsey Advisory Group analyst Dana Telsey reiterated the Outperform rating on Burlington, lowering the price forecast from $340 to $300. In an analyst note, Telsey noted that acquiring prime retail locations remains a key part of Burlington's strategy to expand its footprint and draw in high-value customers, especially as consumers increasingly prioritize value. However, due to macroeconomic uncertainty and rising costs tied to acquiring leases from bankrupt retailers, Telsey lowered the firm's price forecast. She highlighted that Burlington is adjusting its strategy and staying agile in response to current conditions. While tariffs are creating short-term challenges, management believes it won't cause lasting structural shifts in the retail sector. The company's FY25 outlook factors in a 30% tariff on imports from China and 10% on goods from other countries. To reduce its reliance on China, Burlington is collaborating with vendors and sourcing more products already located in the U.S., Telsey noted. She added that the company has several levers across the cost of goods sold and SG&A to help offset higher costs and support profitability. BofA Securities analyst Lorraine Hutchinson maintained the Buy rating on the stock, with a price forecast of $350. According to Hutchinson, the increased order volatility driven by shifting tariffs could actually improve merchandise availability for the off-price sector. She noted that Burlington's direct sourcing exposure remains modest at 8%, mostly tied to categories like Home and gifting. The analyst has modeled a flat gross margin for the second quarter. She anticipates 60 basis points of pressure on gross margin in the second half of the year as tariffs begin to flow through. However, she suggested that mitigation strategies could offset this future pressure once Burlington and its vendors have had sufficient time to adjust their production processes and pricing structures. The company has also seen strong comp performance at higher price points, with customers responding well to elevated merchandise. Hutchinson stressed that this trend will continue, especially as more price-sensitive consumers shift toward value options in response to broader retail price increases from tariffs. Price Action: BURL shares are trading higher by 0.23% to $228.33 at last check Friday. Read Next:Photo via Shutterstock Date Firm Action From To Mar 2022 Truist Securities Maintains Buy Mar 2022 Morgan Stanley Maintains Overweight Mar 2022 Deutsche Bank Maintains Buy View More Analyst Ratings for BURL View the Latest Analyst Ratings Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? BURLINGTON STORES (BURL): Free Stock Analysis Report This article Can Burlington's Profit Levers Deflect Tariff Impact? Analysts Weigh In originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
30-05-2025
- Business
- Yahoo
BURL Q1 Earnings Call: Tariff Uncertainty and Flat Sales Shape 2025 Outlook
Off-price retail company Burlington Stores (NYSE:BURL) missed Wall Street's revenue expectations in Q1 CY2025, but sales rose 6% year on year to $2.50 billion. Its non-GAAP EPS of $1.60 per share was 12% above analysts' consensus estimates. Is now the time to buy BURL? Find out in our full research report (it's free). Revenue: $2.50 billion (6% year-on-year growth) Adjusted EPS: $1.60 vs analyst estimates of $1.43 (12% beat) Revenue Guidance for Q2 CY2025 is $2.61 billion at the midpoint, below analyst estimates of $2.65 billion Management reiterated its full-year Adjusted EPS guidance of $9 at the midpoint Operating Margin: 5.9%, in line with the same quarter last year Locations: 1,115 at quarter end, up from 1,021 in the same quarter last year Same-Store Sales were flat year on year (2% in the same quarter last year) Market Capitalization: $15.03 billion Burlington's first quarter results were shaped by a combination of external headwinds and internal cost management. Management emphasized that February's sales were negatively impacted by severe weather and delayed tax refunds, with CEO Michael O'Sullivan noting, 'the quarter started off slowly.' As conditions normalized, sales trends improved in March and April, but comparable store sales were flat overall. Despite the sluggish top-line growth, Burlington delivered higher adjusted earnings, which management attributed to aggressive pursuit of margin and expense savings, as well as favorable timing between quarters. CFO Kristin Wolfe highlighted that the company benefited from 'faster inventory turns' and strategic inventory purchases that positioned the business ahead of anticipated tariff impacts. Looking forward, Burlington's leadership reiterated its full-year adjusted EPS guidance but underscored heightened uncertainty surrounding tariffs and consumer spending. CEO Michael O'Sullivan explained that the volatility in U.S.-China tariffs could create both risks and opportunities, depending on merchandise supply and sourcing shifts. He stated, 'We see both risks and opportunities in the months ahead, and we are managing our business accordingly.' Management also pointed to macroeconomic risks, including the potential for rising inflation and recessionary pressures, which could weigh on Burlington's core customer. The company's 2025 outlook is contingent on tariffs remaining at current rates and the impact of inflation on lower-income shoppers remaining modest. Management attributed Burlington's Q1 margin outperformance to early cost-saving measures and flexible sourcing, while highlighting the complex and unpredictable impact of tariffs on both supply and consumer demand. Early margin and expense actions: In anticipation of potential tariff impacts, Burlington began aggressively targeting cost savings across its profit and loss statement at the start of the quarter, capturing benefits in supply chain efficiencies, store productivity, and other SG&A (selling, general, and administrative) expenses. Merchandise sourcing flexibility: The company leveraged its ability to source from thousands of vendors and shifted away from categories more exposed to Chinese imports when necessary. Management noted that Burlington directly imports a small portion of its products, allowing nimble responses to shifting tariff regimes. Reserve inventory strategy: Burlington significantly increased its reserve inventory—goods purchased ahead of tariff implementation and stored for future use. CFO Kristin Wolfe described these as 'highly branded' items, which did not incur tariffs and are intended to be released during key selling seasons. Evolving store experience: Roughly half of Burlington's locations have been converted to the Store Experience 2.0 layout, which management believes enhances customer engagement and supports the company's value-focused marketing message. The rollout is expected to be completed by the end of 2026. New store pipeline strength: The company remains committed to opening 100 net new stores in 2025 and has added 46 former JOANN's Fabrics locations to its 2026 pipeline, reflecting management's optimism about market share expansion as competitors exit physical retail. Burlington's outlook is driven by its ability to navigate tariff-related volatility, sustain cost discipline, and adapt to fluctuating consumer demand. Tariff and sourcing risks: Management warned that ongoing changes in U.S.-China tariffs could disrupt the flow of merchandise, impacting both supply and margins. The company's ability to shift sourcing and manage inventory will be key to mitigating any negative effects if tariffs increase or remain unstable. Consumer sensitivity to inflation: The company's core lower-income customer base is highly sensitive to inflation and changes in discretionary income. Management stated that a significant rise in inflation, possibly triggered by tariffs, could pressure sales trends even if Burlington maintains its own low prices. Store expansion and modernization: Burlington's growth strategy relies on the continued rollout of new stores and the Store Experience 2.0 format. The timely opening and performance of new locations, including those acquired from JOANN's, are expected to contribute to both revenue growth and market share gains. In the coming quarters, the StockStory team will monitor (1) how Burlington manages tariff-driven supply chain volatility and its impact on merchandise margins, (2) the pace and performance of new store openings, especially those from the JOANN's acquisition, and (3) shifts in consumer demand as inflation and macroeconomic pressures evolve. Execution on merchandising and cost initiatives will also be critical in this uncertain environment. Burlington currently trades at a forward P/E ratio of 23.8×. In the wake of earnings, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
- Business
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Burlington (NYSE:BURL) Misses Q1 Sales Targets, But Stock Soars 5.5%
Off-price retail company Burlington Stores (NYSE:BURL) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 6% year on year to $2.50 billion. Next quarter's revenue guidance of $2.61 billion underwhelmed, coming in 1.5% below analysts' estimates. Its non-GAAP profit of $1.60 per share was 12% above analysts' consensus estimates. Is now the time to buy Burlington? Find out in our full research report. Revenue: $2.50 billion vs analyst estimates of $2.53 billion (6% year-on-year growth, 0.9% miss) Adjusted EPS: $1.60 vs analyst estimates of $1.43 (12% beat) Adjusted EBITDA: $238.1 million vs analyst estimates of $224.3 million (9.5% margin, 6.2% beat) Revenue Guidance for Q2 CY2025 is $2.61 billion at the midpoint, below analyst estimates of $2.65 billion Management reiterated its full-year Adjusted EPS guidance of $9 at the midpoint Operating Margin: 9.2%, up from 5.3% in the same quarter last year Free Cash Flow was -$438.6 million compared to -$115.5 million in the same quarter last year Locations: 1,115 at quarter end, up from 1,021 in the same quarter last year Same-Store Sales were flat year on year (2% in the same quarter last year) Market Capitalization: $15.03 billion Michael O'Sullivan, CEO, stated, 'Total Sales increased 6% and Comparable Store Sales were Flat for the first quarter, in line with the midpoint of our guidance. Adjusted EBIT Margin and EPS were ahead of guidance with approximately half of this beat to guidance coming from favorable timing of expenses that will negatively impact Q2.' Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. With $10.78 billion in revenue over the past 12 months, Burlington is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. As you can see below, Burlington's 8% annualized revenue growth over the last six years (we compare to 2019 to normalize for COVID-19 impacts) was mediocre, but to its credit, it opened new stores and increased sales at existing, established locations. This quarter, Burlington's revenue grew by 6% year on year to $2.50 billion, missing Wall Street's estimates. Company management is currently guiding for a 6% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 8.8% over the next 12 months, similar to its six-year rate. This projection is eye-popping for a company of its scale and indicates the market sees success for its products. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Burlington operated 1,115 locations in the latest quarter. It has opened new stores at a rapid clip over the last two years, averaging 9.9% annual growth, much faster than the broader consumer retail sector. This gives it a chance to become a large, scaled business over time. When a retailer opens new stores, it usually means it's investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance. A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it's prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year. Burlington's demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 3.2% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives Burlington multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations. In the latest quarter, Burlington's year on year same-store sales were flat. This was a meaningful deceleration from its historical levels. We'll be watching closely to see if Burlington can reaccelerate growth. We enjoyed seeing Burlington beat analysts' EPS and EBITDA expectations this quarter. On the other hand, its revenue guidance for next quarter missed and its full-year EPS guidance fell short of Wall Street's estimates. Overall, this quarter could have been better, but the stock traded up 5.5% to $252 immediately following the results. Should you buy the stock or not? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
- Business
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Burlington Stores, Inc. Reports First Quarter 2025 Earnings
Total sales increased 6%, at the mid-point of guidance and on top of 11% last year Comparable store sales were flat, at the mid-point of guidance and on top of 2% last year Net income was $101 million, and diluted EPS was $1.58 Excluding certain expenses associated with bankruptcy acquired leases: Adjusted EBIT margin increased 30 basis points, well ahead of guidance Adjusted EPS increased 18% to $1.67, well ahead of guidance Maintaining full year adjusted EPS guidance of $8.70 to $9.30; this guidance excludes anticipated expenses associated with bankruptcy acquired leases BURLINGTON, N.J., May 29, 2025 (GLOBE NEWSWIRE) -- Burlington Stores, Inc. (NYSE: BURL), a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories, and merchandise for the home at everyday low prices, today announced its results for the first quarter ended May 3, 2025. Michael O'Sullivan, CEO, stated, 'Total Sales increased 6% and Comparable Store Sales were Flat for the first quarter, in line with the midpoint of our guidance. Adjusted EBIT Margin and EPS were ahead of guidance with approximately half of this beat to guidance coming from favorable timing of expenses that will negatively impact Q2.' Mr. O'Sullivan continued, 'The environment has become more uncertain since March, especially with regard to tariffs. We anticipate that tariffs will put significant pressure on our merchandise margin, but we are confident that, as long as tariffs do not increase from current levels, we can offset this pressure elsewhere in the P&L. These offsets, together with our Q1 earnings favorability, provide a path to achieving our original guidance.' Mr. O'Sullivan added, 'The changing landscape of tariffs creates risks and opportunities for our business. We have many advantages that traditional retailers do not have. We can move more rapidly and more flexibly. The next several months could be challenging but, if we navigate this well, then we expect to come out ahead.' Mr. O'Sullivan concluded, 'It is important to look through the short-term disruption caused by tariffs. Whatever level tariffs settle at, vendors will adjust and relocate to the lowest cost source of production. We do not believe that tariffs are going to change the longer-term structural dynamics of the retail industry. These dynamics are driving the growth of off-price retail and our business. We are excited by and focused on our long-term Full Potential.' Fiscal 2025 First Quarter Operating Results Total sales increased 6% compared to the first quarter of Fiscal 2024 to $2,500 million, while comparable store sales were flat compared to the first quarter of Fiscal 2024. Gross margin rate as a percentage of net sales was 43.8% vs. 43.5% for the first quarter of Fiscal 2024, an increase of 30 basis points. Merchandise margin expanded 20 basis points, while freight expense improved 10 basis points as a percentage of net sales. Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were $197 million vs. $183 million in the first quarter of 2024. Product sourcing costs include the costs of processing goods through our supply chain and buying costs. SG&A was 34.7% as a percentage of net sales vs 35.0% in the first quarter of Fiscal 2024, decreasing by 30 basis points. Adjusted SG&A was 26.8% vs. 27.1% in the first quarter of Fiscal 2024. The effective tax rate was 24.1% vs. 28.4% in the first quarter of Fiscal 2024. The Adjusted Effective Tax Rate was 24.1% vs. 28.1% in the first quarter of Fiscal 2024. Net income was $101 million, or $1.58 per share vs. $79 million, or $1.22 per share for the first quarter of Fiscal 2024. Adjusted Net Income was $107 million, or $1.67 per share, vs. $91 million, or $1.42 per share for the first quarter of Fiscal 2024, excluding $4 million of expenses in each period, net of tax, associated with bankruptcy acquired leases. Diluted weighted average shares outstanding amounted to 64.0 million during the quarter compared with 64.3 million during the first quarter of Fiscal 2024. Adjusted EBITDA was $244 million vs. $217 million in the first quarter of Fiscal 2024, excluding $6 million of expenses in each period associated with bankruptcy acquired leases, an increase of 50 basis points as a percentage of sales. Adjusted EBIT was $152 million vs. $135 million in the first quarter of Fiscal 2024, excluding $6 million of expenses in each period associated with bankruptcy acquired leases, an increase of 30 basis points as a percentage of sales. Inventory Merchandise inventories were $1,315 million vs. $1,141 million at the end of the first quarter of Fiscal 2024, a 15% increase, while comparable store inventories decreased 8% compared to the first quarter of Fiscal 2024. Reserve inventory was 48% of total inventory at the end of the first quarter of Fiscal 2025 compared to 40% at the end of the first quarter of Fiscal 2024. Reserve inventory is largely composed of merchandise that is purchased opportunistically and will be sent to stores in future months or next season. Liquidity and Debt The Company ended the first quarter of Fiscal 2025 with $1,119 million in liquidity, comprised of $371 million in unrestricted cash and $748 million in availability on its ABL facility. The Company ended the first quarter with $1,652 million in outstanding total debt, including $1,236 million on its Term Loan facility, $297 million in Convertible Notes, and $100 million in borrowings on its ABL facility. Common Stock Repurchases During the first quarter of Fiscal 2025, the Company repurchased 445,285 shares of its common stock under its share repurchase program for $105 million. As of the end of the first quarter of Fiscal 2025, the Company had $158 million remaining on its current share repurchase program authorization. On May 20, 2025, the Company's Board of Directors authorized the repurchase of up to an additional $500 million of common stock, which is authorized to be executed through May 2027. OutlookFor Fiscal Year 2025 (the 52-weeks ending January 31, 2026), the Company now expects: Total sales to increase in the range of 6% to 8% on top of the 11% increase during Fiscal 2024; this assumes comparable store sales will increase in the range of 0% to 2%, on top of the 4% increase during Fiscal 2024; Capital expenditures, net of landlord allowances, to be approximately $950 million; To open approximately 100 net new stores; Depreciation and amortization to be approximately $385 million; Adjusted EBIT margin to increase in the range of 0 to 30 basis points versus Fiscal 2024; excludes $33 million of anticipated expenses associated with bankruptcy acquired leases in Fiscal 2025 and $16 million in Fiscal 2024; Net interest expense to be approximately $57 million; An Adjusted Effective Tax Rate of approximately 25%; and Adjusted EPS in the range of $8.70 to $9.30, as compared to $8.35 of Adjusted EPS last year; excludes $25 million, net of tax, of anticipated expenses associated with bankruptcy acquired leases in Fiscal 2025 and $12 million in Fiscal 2024. This assumes a fully diluted share count of approximately 64 million shares. For the second quarter of Fiscal 2025 (the 13-weeks ending May 3, 2025), the Company expects: Total sales to increase in the range of 5% to 7%; this assumes comparable store sales will increase in the range of 0% to 2% versus the second quarter of Fiscal 2024; Adjusted EBIT margin to be in the range of down 30 basis points to flat versus the second quarter of Fiscal 2024; excludes approximately $11 million of anticipated expenses associated with bankruptcy acquired leases in the second quarter of Fiscal 2025 and $3 million in the second quarter of Fiscal 2024; An effective tax rate of approximately 24%; and Adjusted EPS in the range of $1.20 to $1.30, as compared to $1.24 in Adjusted EPS last year; excludes $8 million, net of tax, of anticipated expenses associated with bankruptcy acquired leases in the second quarter of Fiscal 2025 and $2 million in the second quarter of Fiscal 2024. The Company has not presented a quantitative reconciliation of the forward-looking non-GAAP financial measures set out above to their most comparable GAAP financial measures because it would require the Company to create estimated ranges on a GAAP basis, which would entail unreasonable effort. Adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with reasonable certainty but may include, among others, costs related to debt amendments, loss on extinguishment of debt, and impairment charges, as well as the tax effect of such items. Some or all of those adjustments could be significant. Note Regarding Non-GAAP Financial Measures The foregoing discussion of the Company's operating results includes references to Adjusted SG&A, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Share (or Adjusted EPS), Adjusted EBIT (or Adjusted EBIT Margin), and Adjusted Effective Tax Rate. The Company believes these supplemental measures are useful in evaluating the performance of our business and provide greater transparency into our results of operations. In particular, we believe that excluding certain items that may vary substantially in frequency and magnitude from what we consider to be our core operating results are useful supplemental measures that assist investors and management in evaluating our ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures later in this document. First Quarter 2025 Conference Call The Company will hold a conference call on May 29, 2025 at 8:30 a.m. ET to discuss the Company's first quarter results. The U.S. toll free dial-in for the conference call is 1-800-715-9871 (passcode: 5785379) and the international dial-in number is 1-646-307-1963. A live webcast of the conference call will also be available on the investor relations page of the company's website at For those unable to participate in the conference call, a replay will be available after the conclusion of the call on May 29, 2025 beginning at 11:30 a.m. ET through 11:59 p.m. ET on June 5, 2025. The U.S. toll-free replay dial-in number is 1-800-770-2030 and the international replay dial-in number is 1-609-800-9909. The replay passcode is 5785379. About Burlington Stores, Inc. Burlington Stores, Inc., headquartered in New Jersey, is a nationally recognized off-price retailer with Fiscal 2024 net sales of $10.6 billion. The Company is a Fortune 500 company and its common stock is traded on the New York Stock Exchange under the ticker symbol 'BURL.' The Company operated 1,115 stores as of the end of the first quarter of Fiscal 2025 in 46 states, Washington D.C. and Puerto Rico, principally under the name Burlington Stores. The Company's stores offer an extensive selection of in-season, high-quality branded merchandise at up to 60% off other retailers' prices, including fashion-focused women's apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. For more information about the Company, visit Investor Relations Contacts: David J. Glick Daniel Delrosario 855-973-8445 Info@ Allison Malkin ICR, Inc. 203-682-8225 Safe Harbor for Forward-Looking and Cautionary Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this release, including those about the external environment, as well as statements describing our outlook for future periods, are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. We do not undertake to publicly update or revise our forward-looking statements, except as required by law, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those we expected, including general economic conditions, such as inflation, and the domestic and international political situation and the related impact on consumer confidence and spending; competitive factors, including the scale and potential consolidation of some of our competitors, rise of e-commerce spending, pricing and promotional activities of major competitors, and an increase in competition within the markets in which we compete; seasonal fluctuations in our net sales, operating income and inventory levels; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; our ability to identify changing consumer preferences and demand; our ability to meet evolving regulatory requirements and stakeholder expectations regarding environmental, social or governance matters; extreme and/or unseasonable weather conditions caused by climate change or otherwise adversely impacting demand; effects of public health crises, epidemics or pandemics; our ability to sustain our growth plans or successfully implement our long-range strategic plans; our ability to execute our opportunistic buying and inventory management process; our ability to optimize our existing stores or maintain favorable lease terms; the availability, selection and purchasing of attractive brand name merchandise on favorable terms; our ability to attract, train and retain quality employees and temporary personnel in sufficient numbers; labor costs and our ability to manage a large workforce; the solvency of parties with whom we do business and their willingness to perform their obligations to us; import risks, including tax and trade policies, tariffs and government regulations; disruption in our distribution network; our ability to protect our information systems against service interruption, misappropriation of data, breaches of security, or other cyber-related attacks; risks related to the methods of payment we accept; the success of our advertising and marketing programs in generating sufficient levels of customer traffic and awareness; damage to our corporate reputation or brand; impact of potential loss of executives or other key personnel; our ability to comply with existing and changing laws, rules, regulations and local codes; lack of or insufficient insurance coverage; issues with merchandise safety and shrinkage; our ability to comply with increasingly rigorous privacy and data security regulations; impact of legal and regulatory proceedings relating to us; use of social media by us or by third parties at our direction in violation of applicable laws and regulations; our ability to generate sufficient cash to fund our operations and service our debt obligations; our ability to comply with covenants in our debt agreements; the consequences of the possible conversion of our convertible notes; our reliance on dividends, distributions and other payments, advance and transfers of funds from our subsidiaries to meet our obligations; the volatility of our stock price; the impact of the anti-takeover provisions in our governing documents; impact of potential shareholder activism; and each of the factors that may be described from time to time in our filings with the U.S. Securities and Exchange Commission, including under the heading 'Risk Factors' in our most recent Annual Report on Form 10-K. For each of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. BURLINGTON STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (All amounts in thousands, except per share data) Three Months Ended May 3, May 4, 2025 2024 REVENUES: Net sales $ 2,500,075 $ 2,357,318 Other revenue 3,945 4,235 Total revenue 2,504,020 2,361,553 COSTS AND EXPENSES: Cost of sales 1,405,091 1,330,726 Selling, general and administrative expenses 868,058 825,226 Costs related to debt amendments 112 — Depreciation and amortization 91,783 81,965 Impairment charges - long-lived assets 516 8,210 Other income - net (10,222 ) (10,862 ) Interest expense 15,810 16,649 Total costs and expenses 2,371,148 2,251,914 Income before income tax expense 132,872 109,639 Income tax expense 32,039 31,125 Net income $ 100,833 $ 78,514 Diluted net income per common share $ 1.58 $ 1.22 Weighted average common shares - diluted 64,005 64,267 BURLINGTON STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (All amounts in thousands) May 3, February 1, May 4, 2025 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 371,092 $ 994,698 $ 742,332 Accounts receivable—net 106,726 88,079 100,654 Merchandise inventories 1,315,316 1,250,775 1,140,800 Assets held for disposal 23,717 32,193 27,963 Prepaid and other current assets 255,312 263,058 226,378 Total current assets 2,072,163 2,628,803 2,238,127 Property and equipment—net 2,698,789 2,369,720 1,934,547 Operating lease assets 3,415,265 3,386,852 3,149,161 Goodwill and intangible assets—net 285,064 285,064 285,064 Deferred tax assets 2,248 2,248 2,313 Other assets 76,368 97,726 86,040 Total assets $ 8,549,897 $ 8,770,413 $ 7,695,252 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 914,578 $ 1,038,148 $ 929,759 Current operating lease liabilities 397,550 406,891 395,948 Other current liabilities 629,909 656,581 602,973 Current maturities of long term debt 14,804 170,891 168,642 Total current liabilities 1,956,841 2,272,511 2,097,322 Long term debt 1,637,073 1,539,918 1,236,658 Long term operating lease liabilities 3,279,926 3,253,825 3,016,027 Other liabilities 74,104 74,402 73,210 Deferred tax liabilities 249,756 259,261 240,609 Stockholders' equity 1,352,197 1,370,496 1,031,426 Total liabilities and stockholders' equity $ 8,549,897 $ 8,770,413 $ 7,695,252 BURLINGTON STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (All amounts in thousands) Three Months Ended May 3, May 4, 2025 2024 OPERATING ACTIVITIES Net income $ 100,833 $ 78,514 Adjustments to reconcile net income to net cash (used in) provided by operating activities Depreciation and amortization 91,783 81,965 Deferred income taxes (3,883 ) 11,520 Non-cash stock compensation expense 21,817 19,107 Non-cash lease expense (2,002 ) (3,885 ) Cash received from landlord allowances 7,811 2,830 Changes in assets and liabilities: Accounts receivable (18,701 ) (26,397 ) Merchandise inventories (64,541 ) (52,958 ) Accounts payable (118,535 ) (25,211 ) Other current assets and liabilities (40,425 ) (41,061 ) Long term assets and liabilities (193 ) (631 ) Other operating activities (2,872 ) 5,579 Net cash (used in) provided by operating activities (28,908 ) 49,372 INVESTING ACTIVITIES Cash paid for property and equipment (409,700 ) (164,837 ) Lease acquisition costs (8,404 ) (233 ) Net proceeds (removal costs) from sale of property and equipment and assets held for sale 5,421 (462 ) Net cash used in investing activities (412,683 ) (165,532 ) FINANCING ACTIVITIES Proceeds from long term debt—ABL Line of Credit 100,000 - Principal payments on long term debt—Term Loan Facility (3,125 ) (2,404 ) Principal payment on long term debt—2025 Convertible Notes (156,158 ) — Purchase of treasury shares (127,563 ) (75,622 ) Other financing activities 4,831 11,159 Net cash used in financing activities (182,015 ) (66,867 ) Decrease in cash and cash equivalents (623,606 ) (183,027 ) Cash and cash equivalents at beginning of period 994,698 925,359 Cash and cash equivalents at end of period $ 371,092 $ 742,332 Reconciliation of Non-GAAP Financial Measures(Unaudited)(Amounts in thousands, except per share data) The following tables calculate the Company's Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBIT, Adjusted SG&A and Adjusted Effective Tax Rate, all of which are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Adjusted Net Income is defined as net income, exclusive of the following items, if applicable: (i) net favorable lease costs; (ii) costs related to debt amendments; (iii) impairment charges; (iv) amounts related to certain litigation matters; and (v) other unusual or non-recurring expenses, losses, charges or gains, all of which are tax effected to arrive at Adjusted Net Income. Adjusted EPS is defined as Adjusted Net Income divided by the diluted weighted average shares outstanding, as defined in the table below. Adjusted EBITDA is defined as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) costs related to debt amendments; (iv) income tax expense; (v) depreciation and amortization; (vi) net favorable lease costs (vii) impairment charges; (viii) amounts related to certain litigation matters; and (ix) other unusual or non-recurring expenses, losses, charges or gains. Adjusted EBIT (or Adjusted Operating Income) is defined as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) costs related to debt amendments; (iv) income tax expense; (v) impairment charges; (vi) net favorable lease costs; (vii) amounts related to certain litigation matters; and (viii) other unusual or non-recurring expenses, losses, charges or gains. Adjusted EBIT Margin (or Adjusted Operating Margin) is defined as Adjusted EBIT divided by net sales. Adjusted SG&A is defined as SG&A less product sourcing costs, favorable lease costs and amounts related to certain litigation matters. Adjusted Effective Tax Rate is defined as the GAAP effective tax rate less the tax effect of the reconciling items to arrive at Adjusted Net Income (footnote (f) in the table below). The Company presents Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBIT (or Adjusted Operating Income), Adjusted EBIT Margin (or Adjusted Operating Margin), Adjusted SG&A and Adjusted Effective Tax Rate, because it believes they are useful supplemental measures in evaluating the performance of the Company's business and provide greater transparency into the results of operations. In particular, the Company believes that excluding certain items that may vary substantially in frequency and magnitude from what the Company considers to be its core operating results are useful supplemental measures that assist in evaluating the Company's ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods. The Company believes that these non-GAAP measures provide investors helpful information with respect to the Company's operations and financial condition. Other companies in the retail industry may calculate these non-GAAP measures differently such that the Company's calculation may not be directly comparable. The following table shows the Company's reconciliation of net income to Adjusted Net Income and Adjusted EPS for the periods indicated: Three Months Ended May 3, May 4, 2025 2024 Reconciliation of net income to Adjusted Net Income: Net income $ 100,833 $ 78,514 Net favorable lease costs (a) 2,138 2,970 Costs related to debt amendments (b) 112 — Impairment charges - long-lived assets 516 8,210 Litigation matters (c) (416 ) — Tax effect (e) (601 ) (2,881 ) Adjusted Net Income $ 102,582 $ 86,813 Diluted weighted average shares outstanding (f) 64,005 64,267 Adjusted Earnings per Share $ 1.60 $ 1.35 The following table shows the Company's reconciliation of net income to Adjusted EBIT and Adjusted EBITDA for the periods indicated: Three Months Ended May 3, May 4, 2025 2024 Reconciliation of net income to Adjusted EBIT and Adjusted EBITDA: Net income $ 100,833 $ 78,514 Interest expense 15,810 16,649 Interest income (4,712 ) (8,072 ) Net favorable lease costs (a) 2,138 2,970 Costs related to debt amendments (b) 112 — Impairment charges - long-lived assets 516 8,210 Litigation matters (c) (416 ) — Income tax expense 32,039 31,125 Adjusted EBIT 146,320 129,396 Depreciation and amortization 91,783 81,965 Adjusted EBITDA $ 238,103 $ 211,361 The following table shows the Company's reconciliation of SG&A to Adjusted SG&A for the periods indicated: Three Months Ended May 3, May 4, 2025 2024 Reconciliation of SG&A to Adjusted SG&A: SG&A $ 868,058 $ 825,226 Net favorable lease costs (a) (2,138 ) (2,970 ) Product sourcing costs (196,800 ) (183,146 ) Litigation matters (c) 416 — Adjusted SG&A $ 669,536 $ 639,110 The following table shows the reconciliation of the Company's effective tax rates on a GAAP basis to the Adjusted Effective Tax Rates for the periods indicated: Three Months Ended May 3, May 4, 2025 2024 Effective tax rate on a GAAP basis 24.1 % 28.4 % Adjustments to arrive at Adjusted Effective Tax Rate (g) - (0.3 ) Adjusted Effective Tax Rate 24.1 % 28.1 % The following table shows the Company's reconciliation of net income to Adjusted Net Income for the prior period Adjusted EPS amounts used in this press release for the periods indicated: Three Months Ended Fiscal Year Ended August 3, 2024 February 1, 2025 Reconciliation of net income to Adjusted Net Income: Net income $ 73,760 $ 503,639 Net favorable lease costs (a) 3,138 11,189 Loss on extinguishment of debt (d) — 1,412 Costs related to debt amendments (b) — 4,553 Impairment charges — 12,921 Litigation matters (c) 1,925 2,525 Tax effect (e) (1,336 ) (8,298 ) Adjusted Net Income $ 77,487 $ 527,941 Diluted weighted average shares outstanding (f) 64,328 64,595 Adjusted Earnings per Share $ 1.20 $ 8.17 (a) Net favorable lease costs represent the non-cash expense associated with favorable and unfavorable leases that were recorded as a result of purchase accounting related to the April 13, 2006 Bain Capital acquisition of Burlington Coat Factory Warehouse Corporation. These expenses are recorded in the line item 'Selling, general and administrative expenses' in our Condensed Consolidated Statements of Income.(b) Relates to the settlement of the 2025 Convertible Notes during the first quarter of Fiscal 2025. Fiscal 2024 amount relates to the September 2024 extension and upsizing of the Term Loan Facility in the third quarter of Fiscal 2024.(c) Fiscal 2025 amount relates to the final settlements of certain litigation matters. Fiscal 2024 amount represents amounts charged for certain litigation matters.(d) Fiscal 2024 amount relates to the partial write-off of the original issue discount and deferred debt costs related to the September 2024 extension and upsize of the Term Loan Facility. (e) Tax effect is calculated based on the effective tax rates (before discrete items) for the respective periods, adjusted for the tax effect for the impact of items (a) through (d).(f) Diluted weighted average shares outstanding starts with basic shares outstanding and adds back any potentially dilutive securities outstanding during the period.(g) Adjustments for items excluded from Adjusted Net Income. These items have been described in the table above reconciling GAAP net income to Adjusted Net in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
Q4 Earnings Highlights: Burlington (NYSE:BURL) Vs The Rest Of The Discount Retailer Stocks
Quarterly earnings results are a good time to check in on a company's progress, especially compared to its peers in the same sector. Today we are looking at Burlington (NYSE:BURL) and the best and worst performers in the discount retailer industry. Discount retailers understand that many shoppers love a good deal, and they focus on providing excellent value to shoppers by selling general merchandise at major discounts. They can do this because of unique purchasing, procurement, and pricing strategies that involve scouring the market for trendy goods or buying excess inventory from manufacturers and other retailers. They then turn around and sell these snacks, paper towels, toys, clothes, and myriad other products at highly enticing prices. Despite the unique draw and lure of discounts, these discount retailers must also contend with the secular headwinds of online shopping and challenged retail foot traffic in places like suburban strip malls. The 5 discount retailer stocks we track reported a slower Q4. As a group, revenues were in line with analysts' consensus estimates while next quarter's revenue guidance was 2.4% below. Luckily, discount retailer stocks have performed well with share prices up 15.8% on average since the latest earnings results. Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods. Burlington reported revenues of $3.28 billion, up 4.8% year on year. This print exceeded analysts' expectations by 0.9%. Despite the top-line beat, it was still a slower quarter for the company with EPS guidance for next quarter missing analysts' expectations significantly and full-year EPS guidance missing analysts' expectations. Michael O'Sullivan, CEO, stated, 'We are pleased with our strong performance in the fourth quarter. Comparable store sales increased 6%. This growth was driven by deliberate strategies that were well executed by our merchants, supply chain and stores teams. The fourth quarter demonstrated the merits of Burlington 2.0 and the strength of our off-price business model.' Burlington pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 11.6% since reporting and currently trades at $264.89. Read our full report on Burlington here, it's free. Often facilitating a treasure hunt shopping experience, Five Below (NASDAQ:FIVE) is an American discount retailer that sells a variety of products from mobile phone cases to candy to sports equipment for largely $5 or less. Five Below reported revenues of $1.39 billion, up 4% year on year, outperforming analysts' expectations by 1%. The business performed better than its peers, but it was unfortunately a mixed quarter with EPS guidance for next quarter exceeding analysts' expectations but full-year EPS guidance missing analysts' expectations. Five Below pulled off the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 39.9% since reporting. It currently trades at $105.73. Is now the time to buy Five Below? Access our full analysis of the earnings results here, it's free. Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ:ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores. Ross Stores reported revenues of $5.91 billion, down 1.8% year on year, in line with analysts' expectations. It was a slower quarter as it posted full-year EPS guidance missing analysts' expectations. Ross Stores delivered the slowest revenue growth in the group. Interestingly, the stock is up 3.7% since the results and currently trades at $141.05. Read our full analysis of Ross Stores's results here. Often located in suburban or semi-rural shopping centers, Ollie's Bargain Outlet (NASDAQ:OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts. Ollie's reported revenues of $667.1 million, up 2.8% year on year. This number lagged analysts' expectations by 1.2%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts' gross margin estimates but full-year EPS guidance missing analysts' expectations. Ollie's had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is up 15.3% since reporting and currently trades at $114.17. Read our full, actionable report on Ollie's here, it's free. Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE:TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores. TJX reported revenues of $16.35 billion, flat year on year. This print surpassed analysts' expectations by 1%. Zooming out, it was a slower quarter as it logged EPS guidance for next quarter missing analysts' expectations. TJX achieved the biggest analyst estimates beat among its peers. The stock is up 8.6% since reporting and currently trades at $133.24. Read our full, actionable report on TJX here, it's free. The Fed's interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump's presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. Join Paid Stock Investor Research Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here. Sign in to access your portfolio
