Summary
Burlington Stores, Inc. reported a significant recovery in its third quarter and nine-month period ending October 30, 2021, following the disruptive impact of COVID-19 in the prior year. Net sales surged by 38.1% in the third quarter and 93.0% for the nine-month period, driven by both expanded store count and strong comparable store sales growth (16% and 18% respectively compared to 2019 levels). This sales rebound, coupled with the reversal of prior year inventory write-downs, led to a substantial increase in profitability, with net income reaching $13.6 million for the quarter and $287.2 million for the nine months, a dramatic improvement from the prior year's net loss. Despite strong revenue growth, the company faced some cost pressures, notably increased freight and labor costs due to industry-wide supply chain issues, which impacted gross margins in the third quarter. A significant event was a $86.4 million debt extinguishment charge related to the partial repurchase of its convertible notes. However, the company's financial position appears solid, with operating cash flow significantly improving and a substantial amount of cash and cash equivalents on hand. Management is optimistic about future growth, planning to open a significant number of new stores and focusing on strategic initiatives to enhance profitability and operating margins.
Financial Highlights
47 data points| Revenue | $2.30B |
| Cost of Revenue | $1.35B |
| Gross Profit | $956.48M |
| SG&A Expenses | $759.78M |
| Operating Expenses | $2.27B |
| Net Income | $13.62M |
| EPS (Basic) | $0.20 |
| EPS (Diluted) | $0.20 |
| Shares Outstanding (Basic) | 66.74M |
| Shares Outstanding (Diluted) | 68.20M |
Key Highlights
- 1Net sales increased significantly by 38.1% in Q3 FY21 and 93.0% in the first nine months of FY21 compared to the prior year, indicating a strong recovery.
- 2Comparable store sales showed robust growth, increasing 16% in Q3 and 18% for the nine-month period (compared to 2019 levels), demonstrating strong customer demand.
- 3The company returned to profitability, reporting net income of $13.6 million in Q3 FY21 and $287.2 million year-to-date, a substantial improvement from a net loss in the prior year.
- 4Despite sales growth, gross margin as a percentage of net sales decreased in Q3 FY21 (41.4% vs 45.0%) due to increased freight and labor costs related to supply chain issues.
- 5A substantial $86.4 million debt extinguishment charge was recognized in Q3 FY21 related to the repurchase of convertible notes.
- 6Operating cash flow significantly improved, reaching $608.4 million for the nine-month period, a stark contrast to the $116.9 million used in the prior year.
- 7The company continues its store expansion strategy, opening 93 new stores in the first nine months of FY21 and plans to open approximately 77 net new stores in FY21, with a long-term target of 2,000 stores.