01—Abstract
Summary
Summary of the 8-K filed May 28, 2026. Cited figures are marked; the original filing is the authoritative source.
Burlington Stores (BURL) reported first-quarter fiscal 2026 results (quarter ended May 2, 2026) that beat its own guidance on sales, margins, and earnings, and raised full-year guidance.
Net sales rose 14% to $2,852 milliona, comparable store sales rose 6%, and GAAP diluted EPS was $1.79, up from $1.58. Gross margin expanded 30 basis points to 44.1%, driven by higher merchandise margin and lower freight costs. Management called this the 14th consecutive quarter of double-digit EPS growth and said it is passing the entire first-quarter upside through to the full year.
Full-year fiscal 2026 guidance now calls for total sales growth of 9% to 11%, comparable store sales growth of 2% to 4%, and adjusted EPS of $11.45 to $11.80b, versus $10.17 in fiscal 2025. That implies roughly 13% to 16% EPS growth. Q2 guidance calls for adjusted EPS of $2.05 to $2.20, compared with $1.72 a year ago, and comparable store sales growth of 1% to 3%.
Inventory rose 10% to $1,444 millionc, with reserve inventory falling to 41% of the total from 48%, which suggests a healthier mix. Liquidity was $1,689 million, and the company repurchased $81 million of stock and retired $111 million of convertible notes during the quarter. Investors should note that the release reports two different sets of adjusted figures.
The headline adjusted EPS of $2.10d (Adjusted Net Income of $134 million) and adjusted EBIT of $179 million differ from the reconciliation tables, which show $2.01 (Adjusted Net Income of $128.9 million), adjusted EBIT of $171.7 million, and adjusted EBITDA of $276.3 million (versus $284 million in the headline). The reconciliation tables also show the prior-year figure as $1.60, versus $1.67 in the headline. The reconciliation tables also show a fiscal 2025 adjusted EPS of $9.76, while the guidance section cites $10.17.
The gap appears to come from the treatment of lease-related and other adjustments. Investors should confirm which measure management uses when comparing results and guidance.
02—Key points
Key Highlights
- Total sales rose 14% to $2,852 million, and comparable store sales rose 6%, both ahead of company guidance.
- GAAP diluted EPS was $1.79 versus $1.58 a year ago. Management's headline adjusted EPS was $2.10, up 26%, though the reconciliation tables show $2.01, so the adjusted figures need to be reconciled.
- Gross margin rose 30 basis points to 44.1%, with merchandise margin up 20 basis points and freight improving 10 basis points as a percentage of sales.
- Full-year fiscal 2026 guidance was raised: comparable sales growth of 2% to 4%, total sales growth of 9% to 11%, and adjusted EPS of $11.45 to $11.80 (roughly 13% to 16% growth).
- Q2 fiscal 2026 guidance calls for adjusted EPS of $2.05 to $2.20 versus $1.72 last year, and comparable store sales growth of 1% to 3%.
- Inventory rose 10% to $1,444 million, but reserve inventory fell to 41% of the total from 48%, and the company ended the quarter with $1,689 million of liquidity and $1,917 million of total debt.
- Capital returns and balance-sheet actions: $81 million of share repurchases ($304 million remaining authorization) and $111 million of convertible notes repurchased for $173 million (mostly cash, plus 150,831 shares).
03—Questions
Frequently Asked Questions
Did Burlington beat its own expectations this quarter?
Yes. The company said first-quarter sales, comparable store sales, and adjusted EBIT margin were all well ahead of its guidance, and adjusted EPS was well above guidance. Management passed the full first-quarter upside through to its full-year outlook, which it raised.
What is driving the margin improvement?
Management attributed the 20 basis point gain in adjusted EBIT margin to sales running ahead of plan, higher gross margin (up 30 basis points, including 20 basis points from merchandise margin and 10 basis points from freight), and leverage on supply chain expenses. SG&A as a percentage of sales was flat at 34.7% on a GAAP basis, though product sourcing costs rose to $216 million from $197 million.
Why do the adjusted figures differ between the headline and the reconciliation tables?
The release presents adjusted EPS of $2.10 and adjusted EBIT of $179 million in its highlights and narrative, but the reconciliation tables show $2.01, $171.7 million, and adjusted EBITDA of $276.3 million (headline: $284 million). The prior-year comparison also differs ($1.67 headline versus $1.60 in the table), and the fiscal 2025 adjusted EPS of $10.17 in the guidance section differs from the $9.76 shown in the reconciliation. The filing does not explain the difference, so investors should seek clarification from management before relying on either figure.
Is the balance sheet and cash position under control?
Cash fell to $747 million from $1,232 million at fiscal year-end, which is typical seasonal behavior ahead of inventory build. Operating cash flow was $61 million, compared with negative $29 million a year earlier. Total debt was $1,917 million, including $1,716 million on the term loan and $186 million in convertible notes, with no ABL borrowings. Total liquidity was $1,689 million.
What does the rising inventory mean for investors?
Merchandise inventories rose 10% year over year to $1,444 million, against a 6% comparable store sales increase and a 14% total sales increase. Management attributed the increase to 127 net new stores and an 11% rise in comparable store inventory. Reserve inventory, which is bought opportunistically for future months or the next season, declined to 41% of the total from 48%, suggesting a cleaner in-season mix. Inventory growth outpacing comparable sales growth is still something to monitor, given the risk of future markdowns.
04—Continue