01—Abstract
Summary
Summary of the 10-Q filed May 25, 2023. Cited figures are marked; the original filing is the authoritative source.
Burlington Stores, Inc. reported a strong first quarter for fiscal year 2023, with net sales increasing by 10.8% to $2.13 billiona year-over-year.
This growth was driven by a 4% increase in comparable store sales and the contribution of new store openings. Net income more than doubled to $32.7 millionb from $16.2 million in the prior year's first quarter, signaling improved profitability. The company also demonstrated effective cost management, with cost of sales as a percentage of net sales decreasing due to lower freight costs, and selling, general, and administrative expenses showing leverage.
The company continues to execute its growth strategy, including opening new stores and enhancing its merchandising and store experience, while maintaining a disciplined real estate strategy focused on unit economics. Burlington Stores highlights its focus on driving comparable store sales growth through agile trend chasing, leaner inventories, and merchandising investments.
02—Key points
Key Highlights
- Net sales increased by 10.8% to $2.13 billion in Q1 FY2023, driven by a 4% increase in comparable store sales and new store openings.
- Net income more than doubled to $32.7 million in Q1 FY2023, up from $16.2 million in the prior year's quarter.
- Gross margin percentage improved to 42.3% from 41.0% year-over-year, primarily due to decreased freight costs.
- The company opened 13 new stores (including 4 relocations) and closed 3 stores in Q1 FY2023, bringing the total store count to 933.
- Inventory levels decreased slightly year-over-year to $1.23 billion, reflecting a reduction in reserve inventory and an increase in comparable store inventory.
- The company repurchased $51.4 million of its common stock during Q1 FY2023 under its $500 million share repurchase program, with $295.9 million remaining authorization.
- Adjusted Net Income increased by $18.9 million to $55.0 million, indicating strong underlying operational performance beyond GAAP net income.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 25, 2023Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $2.14B$1.93B | +10.7% |
| Cost of Revenue | $1.23B$1.14B | +8.3% |
| Gross Profit | $905.31M$792.75M | +14.2% |
| SG&A Expenses | $755.63M$680.33M | +11.1% |
| Operating Expenses | $2.09B$1.91B | +9.5% |
| Net Income | $32.75M$16.17M | +102.5% |
| EPS (Basic) | $0.50$0.24 | +108.3% |
| EPS (Diluted) | $0.50$0.24 | +108.3% |
| Shares Outstanding (Basic) | 64.95M66.28M | −2.0% |
| Shares Outstanding (Diluted) | 65.29M66.64M | −2.0% |
05—Questions
Frequently Asked Questions
What was the primary driver of Burlington's sales growth in the first quarter?
Burlington's sales growth in the first quarter was primarily driven by a combination of a 4% increase in comparable store sales and incremental sales from new store openings. This indicates a healthy increase in customer traffic and spending at existing stores, as well as successful expansion of their store footprint.
How did Burlington manage its costs and expenses in the quarter?
Burlington demonstrated effective cost management. The cost of sales as a percentage of net sales decreased due to lower freight costs, although this was partially offset by lower merchandise margins due to increased markdowns. Selling, general, and administrative expenses also showed leverage as a percentage of net sales, partly due to reduced litigation costs compared to the prior year, despite increases in product sourcing and store payroll.
What is the company's outlook on inventory management?
Burlington is focusing on operating with leaner inventories compared to historical levels. This strategy aims to ensure customers find a higher mix of fresh receipts, drive faster inventory turns, reduce markdowns, and improve the overall shopping experience. While total inventory decreased year-over-year, comparable store inventory increased, and they are managing reserve inventory levels strategically.
What are Burlington's key strategic initiatives for growth?
Burlington's key strategic initiatives include driving comparable store sales growth through agile trend chasing and leaner inventories, investing in merchandising capabilities, enhancing existing and introducing new product categories, and expanding and enhancing their retail store base through a market-focused and financially disciplined real estate strategy. They also aim to improve operating margins through operational flexibility and optimizing markdowns.
06—Continue