01—Abstract
Summary
Summary of the 10-K filed March 13, 2020. Cited figures are marked; the original filing is the authoritative source.
Burlington Stores, Inc. (BURL) reported strong performance for the fiscal year ended February 1, 2020.
The company experienced a significant increase in net sales, driven by both new store openings and a 2.7%a growth in comparable store sales. Gross margin remained stable, indicating effective cost management despite increased freight costs. Net income and Adjusted EBITDA saw substantial year-over-year increases, reflecting operational improvements and strategic initiatives aimed at enhancing profitability and expanding the store base.
The company's strategic focus for Fiscal 2020 includes further store expansion, with plans to open approximately 54 net new stores, while continuing to optimize existing locations. Burlington is also investing in its merchandising capabilities, aiming for leaner inventories and improved operational flexibility to chase sales trends more effectively. Management is confident in its ability to fund operations and capital expenditures through operating cash flow and its credit facilities, underscoring a positive outlook for continued growth and shareholder value.
02—Key points
Key Highlights
- Net sales increased by 9.3% to $7.26 billion in Fiscal 2019.
- Comparable store sales grew by 2.7%.
- Net income increased by 12.1% to $465.1 million.
- Adjusted EBITDA increased by 11.6% to $883.9 million (exclusive of management transition costs).
- The company opened 76 new stores and closed 8, ending Fiscal 2019 with 727 stores.
- A new share repurchase program of up to $400 million was authorized in August 2019.
- The company plans to open approximately 54 net new stores in Fiscal 2020.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2020filed March 13, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $7.26B$6.64B | +9.3% |
| Cost of Revenue | $4.23B$3.87B | +9.3% |
| Gross Profit | $3.03B$2.77B | +9.3% |
| SG&A Expenses | $2.23B$2.02B | +10.4% |
| Operating Expenses | $6.71B$6.16B | +8.8% |
| Net Income | $465.12M$414.75M | +12.1% |
| EPS (Basic) | $7.05$6.21 | +13.5% |
| EPS (Diluted) | $6.91$6.04 | +14.4% |
| Shares Outstanding (Basic) | 65.94M66.81M | −1.3% |
| Shares Outstanding (Diluted) | 67.29M68.68M | −2.0% |
05—Questions
Frequently Asked Questions
What was Burlington's overall financial performance in Fiscal 2019?
Burlington Stores reported a strong fiscal year ended February 1, 2020, with a 9.3% increase in net sales to $7.26 billion, driven by comparable store sales growth of 2.7% and contributions from new stores. Net income rose 12.1% to $465.1 million, and Adjusted EBITDA (excluding management transition costs) grew 11.6% to $883.9 million, demonstrating improved profitability.
What are Burlington's key growth strategies moving forward?
Burlington's growth strategy focuses on expanding its store base, with plans to open about 54 net new stores in Fiscal 2020. They also aim to enhance profitability by investing in merchandising capabilities, operating with leaner inventories, improving operational flexibility, and optimizing markdowns. Additionally, the company is focused on enhancing the store experience through remodels and relocations.
What is the company's approach to capital allocation and shareholder returns?
Burlington does not currently anticipate paying dividends in the near term, preferring to retain earnings for capital expenditures and business initiatives. The company actively engages in share repurchases, having completed a $300 million program and authorizing an additional $400 million through August 2021, funded by operating cash flow and its credit facilities.
How does Burlington manage its inventory and supply chain?
Burlington utilizes an opportunistic buying model to acquire in-season, fashion-focused merchandise. They are working towards leaner inventories to ensure fresher merchandise and faster turns. The company operates four distribution centers and is opening a fifth in Fiscal 2020 to support its expanding store network and efficient inventory flow.
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