10-QPeriod: Q1 FY2016

Burlington Stores, Inc. Quarterly Report for Q1 Ended May 2, 2015

Filed June 9, 2015For Securities:BURL

Summary

Burlington Stores, Inc. reported a strong first quarter for fiscal year 2015, with net sales increasing by 4.9% to $1.18 billion, driven by both new store openings and a modest 0.8% increase in comparable store sales. This growth was supported by a significant improvement in gross margin to 39.7% from 38.1% in the prior year, primarily due to reduced markdowns. Despite an increase in selling, general, and administrative expenses, the company achieved a net income of $25.7 million, a substantial increase from $11.8 million in the same period last year. Financially, the company demonstrated improved liquidity, with cash and cash equivalents increasing by $9.4 million. This was bolstered by effective debt management, including borrowings under its ABL Line of Credit and strategic debt repayments. The company also announced a new $200 million stock repurchase program, signaling confidence in its future financial performance and a commitment to returning value to shareholders.

Financial Highlights

48 data points
Beta

Revenue

$1.18B

39.7% Gross Margin

Net Income

$25.70M

2.2% Net Margin

EPS (Diluted)

$0.34

Total Assets

$2.67B

Cash & Equivalents

$34.75M

Free Cash Flow

-$64.95M

Financial Statements
Beta
Revenue$1.18B
Cost of Revenue$712.93M
Gross Profit$470.13M
SG&A Expenses$377.68M
Operating Expenses$1.15B
Net Income$25.70M
EPS (Basic)$0.34
EPS (Diluted)$0.34
Shares Outstanding (Basic)74.98M
Shares Outstanding (Diluted)76.50M

Key Highlights

  • 1Net sales grew 4.9% year-over-year to $1.18 billion in the first quarter of fiscal 2015.
  • 2Comparable store sales increased by 0.8%, indicating a modest but positive trend in same-store performance.
  • 3Gross margin expanded significantly to 39.7% from 38.1% in the prior year, driven by a reduction in markdowns.
  • 4Net income more than doubled to $25.7 million compared to $11.8 million in the first quarter of fiscal 2014.
  • 5The company's cash position improved, with cash and cash equivalents increasing by $9.4 million during the quarter.
  • 6A new $200 million stock repurchase program was authorized, demonstrating management's confidence.
  • 7The company plans to open approximately 25 net new stores in fiscal 2015, continuing its expansion strategy.

Frequently Asked Questions

The primary drivers of the net sales increase were sales from new stores opened during the period and stores that were not yet comparable, along with a modest increase in comparable store sales. The company opened five new stores and closed one during the quarter.

Burlington Stores, Inc. utilized its ABL Line of Credit, with net borrowings contributing positively to financing cash flows. The company also made significant principal repayments on its Term Loan Facility and other debt instruments in the prior year, which helped reduce interest expenses in the current period.

The company expects to open approximately 25 net new stores in fiscal 2015, continuing its expansion strategy. They are focused on enhancing comparable store sales through off-price model execution, sharpening focus on their core female customer, improving the customer experience, and increasing e-commerce sales. They also aim to enhance operating margins through optimized markdowns and purchasing power.

Key risks include general economic conditions affecting consumer spending, intense competition in the retail sector leading to margin pressure, seasonality of sales, weather conditions, and potential impacts from changes in import/export laws. The company also faces risks related to its substantial level of indebtedness.