10-QPeriod: Q1 FY2015

Burlington Stores, Inc. Quarterly Report for Q1 Ended May 3, 2014

Filed June 12, 2014For Securities:BURL

Summary

Burlington Stores, Inc. reported a net income of $11.8 million for the three months ended May 3, 2014, a significant improvement from a net loss of $5.6 million in the same period last year. This turnaround was driven by a 5.9% increase in net sales to $1.13 billion, boosted by a 2.7% comparable store sales increase. Gross margin improved to 38.1% from 37.3%, indicating better pricing and cost management. The company also saw a reduction in interest expenses due to debt repayments and refinancing efforts. While selling and administrative expenses remained stable as a percentage of sales, the overall operational performance has strengthened. The company continues its strategic focus on driving comparable store sales, expanding its retail footprint, and enhancing operating margins through various initiatives, including optimizing markdowns and increasing purchasing power.

Financial Highlights

47 data points
Beta

Revenue

$1.13B

38.1% Gross Margin

Net Income

$11.77M

1.0% Net Margin

EPS (Diluted)

$0.16

Total Assets

$2.55B

Cash & Equivalents

$69.49M

Free Cash Flow

-$2.47M

Financial Statements
Beta
Revenue$1.13B
Cost of Revenue$698.46M
Gross Profit$429.81M
SG&A Expenses$347.02M
Operating Expenses$1.12B
Net Income$11.77M
EPS (Basic)$0.16
EPS (Diluted)$0.16
Shares Outstanding (Basic)73.65M
Shares Outstanding (Diluted)75.47M

Key Highlights

  • 1Achieved net income of $11.8 million for the quarter, reversing a net loss of $5.6 million in the prior year's comparable period.
  • 2Net sales increased by 5.9% to $1.13 billion, driven by a 2.7% increase in comparable store sales.
  • 3Gross margin improved by 80 basis points to 38.1% of net sales, reflecting better cost management and execution.
  • 4Reduced interest expense by $7.8 million, benefiting from debt repayments and lower interest rates on credit facilities.
  • 5Continued store expansion with 2 new openings in the quarter, and plans for 23 net new stores in Fiscal 2014.
  • 6Maintained financial flexibility with $69.5 million in cash and cash equivalents and an available ABL Line of Credit.

Frequently Asked Questions

For the three months ended May 3, 2014, Burlington Stores reported a net income of $11.8 million on net sales of $1.13 billion, a significant improvement from a net loss of $5.6 million on net sales of $1.07 billion in the same period of the prior year. This turnaround was driven by a 2.7% increase in comparable store sales and an improvement in gross margin to 38.1%.

The company has been actively managing its debt. Interest expense decreased significantly due to debt repayments on Holdco Notes and refinancing of the Term Loan to lower interest rates. As of May 3, 2014, long-term debt, net of current maturities, was $1.37 billion. The company remains in compliance with its debt covenants.

Burlington Stores is focused on driving comparable store sales growth through enhancing its off-price model, sharpening focus on its core female customer, and improving the customer experience. They are also expanding their retail store base by opening approximately 25 net new stores annually and enhancing operating margins through initiatives like optimizing markdowns and increasing purchasing power.

As of May 3, 2014, the company had $69.5 million in cash and cash equivalents. Net cash provided by operating activities was $46.9 million for the quarter. The company believes that cash generated from operations, combined with its existing cash and ABL Line of Credit, will be sufficient to meet its expected cash flow requirements and planned capital expenditures for at least the next twelve months and the foreseeable future.