10-QPeriod: Q1 FY2025

Burlington Stores, Inc. Quarterly Report for Q1 Ended May 4, 2024

Filed May 30, 2024For Securities:BURL

Summary

Burlington Stores, Inc. reported strong first-quarter results for fiscal year 2024, demonstrating significant year-over-year growth in both revenue and profitability. Net sales increased by 10.5% to $2.36 billion, driven by a 2% rise in comparable store sales and contributions from new store openings. This top-line growth, coupled with improved gross margin and controlled SG&A expenses, led to a substantial increase in net income to $78.5 million, or $1.22 per diluted share, up from $32.7 million, or $0.50 per diluted share, in the prior year. The company continues its strategic expansion, opening 36 new stores (including 11 relocations) in the quarter, and plans to average approximately 100 net new stores per year through fiscal 2028, reinforcing its long-term growth strategy. Burlington's focus on operational efficiency, including leaner inventories and optimized supply chain, is contributing to enhanced profitability. The company also highlighted its robust liquidity position, with significant availability under its ABL Line of Credit and positive cash flow from operations, positioning it well to fund future growth and capital expenditures.

Financial Highlights

47 data points
Beta

Revenue

$2.36B

43.7% Gross Margin

Net Income

$78.51M

3.3% Net Margin

EPS (Diluted)

$1.22

Total Assets

$7.70B

Cash & Equivalents

$742.33M

Free Cash Flow

-$115.47M

Financial Statements
Beta
Revenue$2.36B
Cost of Revenue$1.33B
Gross Profit$1.03B
SG&A Expenses$825.23M
Operating Expenses$2.25B
Net Income$78.51M
EPS (Basic)$1.23
EPS (Diluted)$1.22
Shares Outstanding (Basic)63.87M
Shares Outstanding (Diluted)64.27M

Key Highlights

  • 1Net sales for the quarter increased by 10.5% to $2.36 billion, compared to $2.13 billion in the prior year's first quarter.
  • 2Comparable store sales saw a 2% increase, indicating healthy performance in existing store locations.
  • 3Net income surged to $78.5 million ($1.22 per diluted share) from $32.7 million ($0.50 per diluted share) year-over-year.
  • 4Gross margin improved to 43.5% from 42.3% in the prior year, driven by better merchandise margins and reduced freight costs.
  • 5The company opened 36 new stores (including 11 relocations) and plans to average approximately 100 net new stores annually through fiscal 2028.
  • 6Inventory levels decreased year-over-year to $1.14 billion from $1.23 billion, reflecting a more efficient inventory management strategy.
  • 7The company maintained strong liquidity, ending the quarter with $742.3 million in cash and cash equivalents and $779.1 million available under its ABL Line of Credit.

Frequently Asked Questions

Burlington's revenue growth was primarily driven by a 10.5% increase in net sales to $2.36 billion. This was fueled by a 2% rise in comparable store sales, indicating improved performance in existing locations, and the net sales generated from 88 new stores opened since the prior year's first quarter. The company's strategy of opportunistic buying and expanding its store base continues to contribute to top-line growth.

Profitability significantly improved in the first quarter, with net income rising to $78.5 million from $32.7 million in the prior year's first quarter. This improvement is attributed to a higher gross margin rate (43.5% vs. 42.3%), driven by better merchandise margins and lower freight costs. Additionally, Selling, General, and Administrative (SG&A) expenses as a percentage of net sales decreased to 35.0% from 35.4%, benefiting from supply chain efficiencies and improved product sourcing costs.

Burlington continues to execute a disciplined real estate strategy focused on market opportunities. In the first quarter, the company opened 36 new stores (including 11 relocations) and closed 11 stores, bringing the total store count to 1,021. Looking ahead, Burlington plans to open approximately 100 net new stores per year on average through fiscal 2028, aiming to reach around 2,000 stores long-term, leveraging its smaller store prototype.

Burlington is focusing on operating with leaner inventories, which they believe will result in a higher mix of fresh receipts and better merchandise values for customers, leading to faster turns and lower markdowns. As of May 4, 2024, merchandise inventories stood at $1.14 billion, a decrease from $1.23 billion at April 29, 2023. This reduction, despite the opening of new stores, reflects their commitment to more efficient inventory management.