01—Abstract
Summary
Summary of the 10-Q filed August 27, 2026. Cited figures are marked; the original filing is the authoritative source.
Burlington Stores, Inc. reported strong performance for the second quarter and first half of fiscal year 2026, driven by significant increases in net sales and improved gross margin.
Net sales for the second quarter rose by 11.0% to $2.998 billiona, and for the first half of the year, they increased by 12.5% to $5.850 billion. This growth was fueled by both new store openings and a 2% increase in comparable store sales for the quarter and a 4% increase for the first half. A notable factor contributing to the improved profitability was a $55.5 million benefit from tariff refunds, alongside better merchandise margins.
Profitability saw a substantial jump, with net income reaching $184.3 millionb for the second quarter, up from $94.2 million in the prior year, and $299.0 million for the first half, up from $195.0 million. This robust financial performance, coupled with strategic growth initiatives like store expansion and supply chain investments, positions Burlington Stores favorably. The company continues to expand its store footprint, with plans to open at least 100 net new stores annually.
02—Key points
Key Highlights
- Net sales increased by 11.0% to $2.998 billion in Q2 FY2026 and by 12.5% to $5.850 billion in the first half of FY2026.
- Net income more than doubled year-over-year, reaching $184.3 million in Q2 and $299.0 million in the first half of FY2026.
- Gross margin improved significantly, up to 46.2% in Q2 and 45.1% in the first half, boosted by $55.5 million in tariff refunds and better merchandise margins.
- Comparable store sales increased by 2% for the second quarter and 4% for the first half of FY2026.
- The company opened 91 new stores (including 12 relocations) in the first half of FY2026, bringing the total store count to 1,287, and plans to open at least 100 net new stores per year.
- Inventories increased by 8.9% year-over-year to $1.541 billion, reflecting new store growth and higher comparable store inventory, while reserve inventory as a percentage of total inventory decreased.
- The company maintained a strong liquidity position, with $703.7 million in cash and cash equivalents as of August 1, 2026, and $942.0 million available under its ABL Line of Credit.
03—Questions
Frequently Asked Questions
What is the primary driver behind the significant increase in net income this quarter?
The substantial increase in net income is primarily driven by a combination of higher net sales, an improved gross margin rate, and a significant benefit from tariff refunds totaling $55.5 million. These factors, along with ongoing operational efficiencies, contributed to the strong bottom-line performance.
How is Burlington Stores managing its inventory levels given the increase in sales and store count?
Burlington Stores has increased its inventory to $1.541 billion, reflecting growth from new stores and higher comparable store inventory. However, the company has strategically reduced its reserve inventory to 43% of total inventory (down from 50% in the prior year) to better chase sales trends and ensure a flow of fresh merchandise, indicating a proactive approach to inventory management.
What is the company's outlook on future store growth and expansion?
Burlington Stores remains committed to expanding its store footprint, with plans to open at least 100 net new stores per year and a long-term goal of operating 2,000 stores. The company is selectively expanding in attractive locations, prioritizing 25,000 square foot stores in busy strip malls, and also relocating or downsizing certain existing stores.
What impact did the tariff refunds have on the financial results?
The tariff refunds provided a significant benefit, contributing $55.5 million to the cost of sales reduction. This refund was a key factor in the improved gross margin and overall net income for both the second quarter and the first half of the fiscal year.
04—Continue