10-QPeriod: Q2 FY2024

Burlington Stores, Inc. Quarterly Report for Q2 Ended Jul 29, 2023

Filed August 24, 2023For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) reported strong performance in its second-quarter 10-Q filing for the period ending July 29, 2023. Net sales increased by 9.4% year-over-year to $2.17 billion, driven by a 4% increase in comparable store sales and the addition of new stores. The company demonstrated improved profitability with a gross margin of 41.7%, up from 38.9% in the prior year, attributed to lower freight costs and higher merchandise margins. Net income saw a significant rise to $30.9 million, a substantial increase from $12.0 million in the same period last year. This improved profitability was supported by operational efficiencies and strategic initiatives focused on driving comparable store sales, optimizing inventory, and enhancing operating margins. The company also announced an additional $500 million share repurchase authorization, signaling confidence in its financial health and commitment to returning value to shareholders.

Financial Highlights

47 data points
Beta

Revenue

$2.17B

41.8% Gross Margin

Net Income

$30.89M

1.4% Net Margin

EPS (Diluted)

$0.47

Total Assets

$6.92B

Cash & Equivalents

$520.97M

Free Cash Flow

$18.71M

Financial Statements
Beta
Revenue$2.17B
Cost of Revenue$1.27B
Gross Profit$908.60M
SG&A Expenses$775.28M
Operating Expenses$2.13B
Net Income$30.89M
EPS (Basic)$0.48
EPS (Diluted)$0.47
Shares Outstanding (Basic)64.89M
Shares Outstanding (Diluted)65.04M

Key Highlights

  • 1Net sales increased by 9.4% to $2.17 billion for the three months ended July 29, 2023, compared to $1.98 billion in the prior year.
  • 2Comparable store sales increased by 4% for the three months ended July 29, 2023.
  • 3Gross margin improved to 41.7% from 38.9% in the prior year period, driven by decreased freight costs and increased merchandise margins.
  • 4Net income for the three months ended July 29, 2023, was $30.9 million, a significant increase from $12.0 million in the prior year.
  • 5The company opened 22 new stores during the six-month period ended July 29, 2023, and closed five, bringing the total store count to 939.
  • 6An additional $500 million share repurchase program was authorized, extending through August 2025.
  • 7The company reported $818.7 million available under its ABL Line of Credit as of July 29, 2023, with no borrowings outstanding.

Frequently Asked Questions

Burlington's revenue growth in the second quarter was primarily driven by a 9.4% increase in net sales, supported by a 4% rise in comparable store sales and the net sales contribution from 62 new stores opened since the prior year's second quarter.

Burlington improved its gross margin to 41.7% from 38.9% year-over-year. This improvement was mainly due to decreased freight costs and higher merchandise margins. The enhanced gross margin, coupled with increased sales, significantly contributed to the rise in net income from $12.0 million to $30.9 million for the quarter.

Burlington continues its store expansion strategy, opening 22 new stores in the first half of Fiscal 2023 and planning to open 70-80 net new stores in the full fiscal year, aiming for a long-term store count of 2,000. In addition, the company announced a new $500 million share repurchase authorization, signaling confidence in its financial performance and commitment to shareholder returns.

As of July 29, 2023, Burlington had a Term Loan Facility of $937.7 million and Convertible Notes of $397.4 million, with no outstanding borrowings on its ABL Line of Credit, which had $818.7 million available. The company expects cash generated from operations and its ABL Line of Credit to be sufficient for its future needs. The company also amended its Term Loan Credit Agreement to switch to the Adjusted Term SOFR Rate, and has hedged $450 million of its variable rate exposure.