01—Abstract
Summary
Summary of the 10-K filed March 15, 2021. Cited figures are marked; the original filing is the authoritative source.
Burlington Stores, Inc. (BURL) experienced a challenging fiscal year ended January 30, 2021, primarily due to the significant impact of the COVID-19 pandemic.
The company temporarily closed all its stores and distribution centers in March 2020, resuming operations later in the year. This disruption led to a net loss of $216.5 milliona for the fiscal year, a stark contrast to the net income of $465.1 million in the prior year. The pandemic also impacted sales, resulting in a 20.8% decrease in net sales compared to Fiscal 2019.
Despite the adverse effects of COVID-19, Burlington took proactive steps to manage its financial flexibility, including managing operating expenses, negotiating rent deferrals, suspending its share repurchase program, and securing new debt financing. The company also highlighted its long-term growth strategy, aiming to expand its store base to 2,000 locations and focusing on improving operational efficiency and enhancing the customer experience. The company ended the fiscal year with a strong liquidity position, including a significant increase in cash and cash equivalents.
02—Key points
Key Highlights
- Fiscal 2020 Net Loss: Burlington reported a net loss of $216.5 million, a significant downturn from the $465.1 million net income in Fiscal 2019, primarily attributed to COVID-19 impacts.
- Sales Decline: Net sales decreased by 20.8% to $5.75 billion in Fiscal 2020, reflecting the temporary store closures and subsequent business disruptions.
- Liquidity Management: The company raised $805 million in Convertible Senior Notes and $300 million in Senior Secured Notes and managed expenses to maintain financial flexibility during the pandemic.
- Store Count Growth: Despite the challenges, Burlington continued to expand its store footprint, ending Fiscal 2020 with 761 stores, an increase of 34 stores from the prior year.
- Increased Debt: The company significantly increased its long-term debt, primarily due to the issuance of convertible and secured notes to bolster liquidity.
- Focus on Future Growth: Burlington reaffirmed its long-term store target of 2,000 locations and outlined initiatives to drive comparable store sales, invest in merchandising, and enhance operating margins.
- Inventory Management: Inventory levels decreased slightly year-over-year, reflecting a strategy of operating with leaner inventories to improve freshness and turn.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 15, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $5.75B$7.26B | −20.8% |
| Cost of Revenue | $3.56B$4.23B | −15.9% |
| Gross Profit | $2.20B$3.03B | −27.6% |
| SG&A Expenses | $2.33B$2.23B | +4.4% |
| Operating Expenses | $6.20B$6.71B | −7.5% |
| Net Income | -$216.50M$465.12M | −146.5% |
| EPS (Basic) | $-3.28$7.05 | −146.5% |
| EPS (Diluted) | $-3.28$6.91 | −147.5% |
| Shares Outstanding (Basic) | 65.96M65.94M | 0.0% |
| Shares Outstanding (Diluted) | 65.96M67.29M | −2.0% |
05—Questions
Frequently Asked Questions
How did COVID-19 impact Burlington's financial performance in Fiscal Year 2020?
COVID-19 significantly impacted Burlington's financial performance. The company temporarily closed all of its stores and distribution centers in March 2020, leading to a substantial decrease in net sales by 20.8% and a net loss of $216.5 million for the fiscal year, compared to a net income of $465.1 million in Fiscal 2019.
What steps did Burlington take to manage its financial health during the pandemic?
Burlington took several steps to manage its financial health, including carefully managing operating expenses, working capital, and capital expenditures. They also negotiated rent deferral agreements with landlords, suspended their share repurchase program, and issued $805 million in Convertible Senior Notes and $300 million in Senior Secured Notes to enhance financial flexibility and liquidity.
What is Burlington's strategy for future growth?
Burlington's growth strategy includes expanding its store base with a long-term target of 2,000 stores. They plan to achieve this through a disciplined real estate strategy focused on unit economics and returns. Additionally, the company aims to increase comparable store sales by chasing sales trends, investing in merchandising capabilities, operating with leaner inventories, and enhancing existing and introducing new product categories.
How has Burlington's debt situation changed?
Burlington's long-term debt increased significantly in Fiscal 2020. The company issued $805 million in Convertible Senior Notes and $300 million in Senior Secured Notes, primarily to bolster liquidity during the COVID-19 pandemic. As a result, total long-term debt rose substantially compared to the previous fiscal year.
06—Continue