01—Abstract
Summary
Summary of the 10-Q filed August 24, 2023. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 millionb share repurchase authorization, signaling confidence in its financial health and commitment to returning value to shareholders.
02—Key points
Key Highlights
- Net 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.
- Comparable store sales increased by 4% for the three months ended July 29, 2023.
- Gross margin improved to 41.7% from 38.9% in the prior year period, driven by decreased freight costs and increased merchandise margins.
- Net income for the three months ended July 29, 2023, was $30.9 million, a significant increase from $12.0 million in the prior year.
- The company opened 22 new stores during the six-month period ended July 29, 2023, and closed five, bringing the total store count to 939.
- An additional $500 million share repurchase program was authorized, extending through August 2025.
- The company reported $818.7 million available under its ABL Line of Credit as of July 29, 2023, with no borrowings outstanding.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 24, 2023Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $2.17B$1.99B | +9.4% |
| Cost of Revenue | $1.27B$1.21B | +4.5% |
| Gross Profit | $908.60M$776.67M | +17.0% |
| SG&A Expenses | $775.28M$685.50M | +13.1% |
| Operating Expenses | $2.13B$1.97B | +8.2% |
| Net Income | $30.89M$11.97M | +158.2% |
| EPS (Basic) | $0.48$0.18 | +166.7% |
| EPS (Diluted) | $0.47$0.18 | +161.1% |
| Shares Outstanding (Basic) | 64.89M65.80M | −1.4% |
| Shares Outstanding (Diluted) | 65.04M65.96M | −1.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of Burlington's revenue growth in the second quarter?
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.
How did Burlington manage its gross margin, and what was the impact on profitability?
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.
What is Burlington's outlook on store expansion and share repurchases?
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.
How is Burlington managing its debt and liquidity?
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.
06—Continue