10-QPeriod: Q2 FY2025

Burlington Stores, Inc. Quarterly Report for Q2 Ended Aug 3, 2024

Filed August 29, 2024For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) reported a strong second quarter for Fiscal Year 2024, demonstrating significant year-over-year growth in net sales and net income. Net sales increased by 13.4% to $2.46 billion, driven by a 5% rise in comparable store sales and the addition of new stores. This top-line growth, coupled with improved gross margins and operating expense leverage, led to a substantial increase in profitability, with net income nearly doubling to $73.8 million from $30.9 million in the prior year period. The company continues to execute its strategic initiatives, including expanding its store base, investing in merchandising capabilities, and optimizing its supply chain. Burlington added 76 new stores (including relocations) in the first half of the year, bringing the total to 1,057, and plans to open an average of 100 net new stores annually through Fiscal 2028. Despite ongoing macroeconomic uncertainties impacting their core customer, the company remains focused on driving comparable store sales growth and enhancing operating margins. Burlington's financial position remains solid, supported by a strong liquidity position and available credit facilities.

Financial Highlights

47 data points
Beta

Revenue

$2.47B

42.9% Gross Margin

Net Income

$73.76M

3.0% Net Margin

EPS (Diluted)

$1.15

Total Assets

$7.82B

Cash & Equivalents

$659.91M

Free Cash Flow

-$35.17M

Financial Statements
Beta
Revenue$2.47B
Cost of Revenue$1.41B
Gross Profit$1.06B
SG&A Expenses$863.98M
Operating Expenses$2.37B
Net Income$73.76M
EPS (Basic)$1.16
EPS (Diluted)$1.15
Shares Outstanding (Basic)63.73M
Shares Outstanding (Diluted)64.33M

Key Highlights

  • 1Net sales increased by 13.4% to $2.46 billion in Q2 FY24, compared to $2.17 billion in Q2 FY23.
  • 2Comparable store sales grew by 5% in Q2 FY24, indicating strong customer demand.
  • 3Net income more than doubled to $73.8 million in Q2 FY24, up from $30.9 million in Q2 FY23.
  • 4Gross margin improved to 42.8% in Q2 FY24, from 41.7% in Q2 FY23, driven by lower markdowns and freight costs.
  • 5The company opened 76 new stores (including 15 relocations) in the first half of FY24, expanding its retail footprint to 1,057 stores.
  • 6Capital expenditures for the first half of FY24 were $360.1 million, reflecting significant investment in new stores and supply chain initiatives, with a full-year forecast of approximately $750 million.
  • 7The company has $380.5 million remaining under its share repurchase authorization as of August 3, 2024, underscoring a commitment to returning capital to shareholders.

Frequently Asked Questions

Burlington's revenue growth in the second quarter was primarily driven by a 5% increase in comparable store sales and the addition of 118 net new stores since the end of the prior year's second quarter. This indicates both strong performance in existing stores and successful expansion.

Burlington improved its gross margin to 42.8% in Q2 FY24 from 41.7% in Q2 FY23, mainly due to decreased markdowns and lower freight costs. Selling, general, and administrative expenses as a percentage of net sales also decreased due to product sourcing cost improvements and operating leverage, despite increased dollar spending due to store expansion.

Burlington plans to expand its retail store base significantly, with an average of approximately 100 net new stores per year expected through Fiscal 2028, targeting a total of 2,000 stores over the long term. This strategy is supported by a disciplined real estate approach.

As of August 3, 2024, Burlington's total debt (excluding finance lease obligations) was approximately $1.4 billion. The company has a substantial ABL Line of Credit with $816.1 million available and no outstanding borrowings. Management believes its cash flow from operations and credit facilities are sufficient to meet its obligations and capital expenditures for the foreseeable future.