How did Burlington perform in the fourth quarter of fiscal 2024?

Q4 comparable store sales rose 6%, well ahead of the 0% to 2% guidance. Reported net income was $261 million, or $4.02 per diluted share, versus $3.53 a year earlier on a 14-week basis. Adjusted EPS was $4.13 on the headline basis, up 12%. Gross margin rose 30 basis points to 42.9% on a 13-week basis, and Adjusted EBIT margin improved 10 basis points.

What does the fiscal 2025 guidance imply for earnings growth?

Guidance for fiscal 2025 calls for Adjusted EPS of $8.70 to $9.30, versus $8.35 in fiscal 2024, which implies roughly 4% to 11% growth. Growth is supported by total sales growth of 6% to 8% and an Adjusted EBIT margin change of 0 to 30 basis points, with comparable store sales of 0% to 2%. The company assumes about 65 million diluted shares and about $57 million of net interest expense.

Why is the first-quarter 2025 outlook a concern for investors?

The company expects flat comparable store sales in Q1 and an Adjusted EBIT margin decline of 50 to 90 basis points, with Adjusted EPS of $1.30 to $1.45 against $1.42 last year. This implies a year-over-year EPS decline at the midpoint. Management also described the 2025 environment as 'very uncertain' and said it will manage cautiously.

Is the inventory build a risk?

Merchandise inventories rose 15% to $1.25 billion, while comparable store inventories fell 3%. Reserve inventory, which is opportunistically purchased goods held for future months or seasons, rose to 46% of total inventory from 39%. This shift toward reserve inventory gives the company flexibility to buy at attractive prices but could pressure margins or require markdowns if demand slows or purchases do not sell through.

How is the company's financial position and capital allocation?

Liquidity was $1.82 billion at year-end, including $995 million of unrestricted cash and $827 million of ABL availability, with no ABL borrowings. Total debt was $1.71 billion, including a $1.24 billion term loan and $453 million of convertible notes. Capital spending rose to about $880 million in fiscal 2024 and is planned at about $950 million for fiscal 2025. The company repurchased $61 million of stock in Q4 and had $263 million remaining under its authorization.

BURL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed March 6, 2025. Cited figures are marked; the original filing is the authoritative source.

Burlington Stores reported a strong fourth quarter and full-year fiscal 2024 (ended February 1, 2025), driven by comparable store sales growth well above guidance.

Q4 comparable store sales rose 6% against guidance of 0% to 2%. On a 13-week basis, total sales grew 10%, and gross margin expanded 30 basis points to 42.9%. Reported Q4 diluted EPS was $4.02^a (net income $261 million), and the company cited Adjusted EPS of $4.13, up 12% year over year.

For fiscal 2024, net sales reached $10.6 billion^b, comparable store sales rose 4%, and Adjusted EBIT margin expanded 100 basis points to 7.2%. Diluted EPS was $7.80, and Adjusted EPS was $8.35, up 34%. The key debate for investors is the outlook.

Management guided fiscal 2025 total sales growth of 6% to 8%, comparable store sales growth of 0% to 2%, and Adjusted EPS of $8.70 to $9.30^c. The company also expects capital expenditures of about $950 million, roughly 100 net new stores, and an Adjusted EBIT margin change of 0 to 30 basis points. For the first quarter of fiscal 2025, management expects flat comparable store sales and an Adjusted EBIT margin decline of 50 to 90 basis points, with Adjusted EPS of $1.30 to $1.45 versus $1.42 last year.

The CEO described the 2025 outlook as 'very uncertain' and said the company will manage cautiously. Balance sheet and working capital warrant attention. Merchandise inventories rose 15% to $1.25 billion^d, while comparable store inventories fell 3%, and reserve inventory (opportunistically purchased goods) climbed to 46% of total inventory from 39%.

Liquidity was $1.82 billion, including $995 million of unrestricted cash, and total debt was $1.71 billion. Capital spending increased sharply, with cash paid for property and equipment at $880 million versus $493 million a year earlier.

The company repurchased $61 million of stock in Q4 and had $263 million remaining under its authorization. Note that the press release's headline Adjusted metrics exclude bankruptcy-acquired lease expenses, while the reconciliation tables in the same release show lower Adjusted EPS figures ($4.07 for Q4 and $8.17 for the year), so the basis of comparison should be checked carefully.

02—Key points

Key Highlights

Q4 comparable store sales grew 6%, well above the company's 0% to 2% guidance; Q4 total sales rose 10% on a 13-week basis.
Fiscal 2024 net sales reached $10.6 billion (up 11% on a 52-week basis), with comparable store sales up 4% and 101 net new stores opened.
Q4 gross margin expanded 30 basis points to 42.9%, with freight improving 20 basis points and merchandise margin up 10 basis points.
Fiscal 2024 Adjusted EBIT margin rose 100 basis points to 7.2%; Adjusted EPS was $8.35, up 34% (headline basis, excluding bankruptcy-acquired lease costs).
FY2025 guidance calls for 6% to 8% sales growth, 0% to 2% comparable store sales growth, and Adjusted EPS of $8.70 to $9.30, versus $8.35 in fiscal 2024.
Q1 FY2025 guidance is weaker: flat comparable store sales and an Adjusted EBIT margin decline of 50 to 90 basis points, with Adjusted EPS of $1.30 to $1.45 versus $1.42 a year ago.
Inventory rose 15% to $1.25 billion against a 3% decline in comparable store inventories, and reserve inventory increased to 46% of total from 39%; liquidity stands at $1.82 billion.

03—Questions

Frequently Asked Questions

How did Burlington perform in the fourth quarter of fiscal 2024?
Q4 comparable store sales rose 6%, well ahead of the 0% to 2% guidance. Reported net income was $261 million, or $4.02 per diluted share, versus $3.53 a year earlier on a 14-week basis. Adjusted EPS was $4.13 on the headline basis, up 12%. Gross margin rose 30 basis points to 42.9% on a 13-week basis, and Adjusted EBIT margin improved 10 basis points.
What does the fiscal 2025 guidance imply for earnings growth?
Guidance for fiscal 2025 calls for Adjusted EPS of $8.70 to $9.30, versus $8.35 in fiscal 2024, which implies roughly 4% to 11% growth. Growth is supported by total sales growth of 6% to 8% and an Adjusted EBIT margin change of 0 to 30 basis points, with comparable store sales of 0% to 2%. The company assumes about 65 million diluted shares and about $57 million of net interest expense.
Why is the first-quarter 2025 outlook a concern for investors?
The company expects flat comparable store sales in Q1 and an Adjusted EBIT margin decline of 50 to 90 basis points, with Adjusted EPS of $1.30 to $1.45 against $1.42 last year. This implies a year-over-year EPS decline at the midpoint. Management also described the 2025 environment as 'very uncertain' and said it will manage cautiously.
Is the inventory build a risk?
Merchandise inventories rose 15% to $1.25 billion, while comparable store inventories fell 3%. Reserve inventory, which is opportunistically purchased goods held for future months or seasons, rose to 46% of total inventory from 39%. This shift toward reserve inventory gives the company flexibility to buy at attractive prices but could pressure margins or require markdowns if demand slows or purchases do not sell through.
How is the company's financial position and capital allocation?
Liquidity was $1.82 billion at year-end, including $995 million of unrestricted cash and $827 million of ABL availability, with no ABL borrowings. Total debt was $1.71 billion, including a $1.24 billion term loan and $453 million of convertible notes. Capital spending rose to about $880 million in fiscal 2024 and is planned at about $950 million for fiscal 2025. The company repurchased $61 million of stock in Q4 and had $263 million remaining under its authorization.

04—Continue

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