US' Burlington Stores projects 5–7% sales growth in Q2 FY25

For fiscal 2025, the company expects total sales to increase in the range of 6 per cent to 8 per cent on top of the 11 per cent increase during fiscal 2024; this assumes comparable store sales will increase in the range of 0 per cent to 2 per cent, on top of the 4 per cent increase during fiscal 2024.

In the first quarter (Q1) of fiscal 2025, total sales increased 6 per cent compared to the first quarter of fiscal 2024 to $2,500 million, while comparable store sales were flat compared to the first quarter of fiscal 2024.

“Total sales increased 6 per cent and comparable store sales were flat for the first quarter, in line with the midpoint of our guidance. Adjusted EBIT margin and EPS were ahead of guidance with approximately half of this beat to guidance coming from favourable timing of expenses that will negatively impact Q2,” said Michael O’Sullivan, CEO.

“The environment has become more uncertain since March, especially with regard to tariffs. We anticipate that tariffs will put significant pressure on our merchandise margin, but we are confident that, as long as tariffs do not increase from current levels, we can offset this pressure elsewhere in the P&L. These offsets, together with our Q1 earnings favorability, provide a path to achieving our original guidance,” O’Sullivan continued.

Gross margin rate as a percentage of net sales was 43.8 per cent vs 43.5 per cent for the first quarter of fiscal 2024, an increase of 30 basis points. Merchandise margin expanded 20 basis points, while freight expense improved 10 basis points as a percentage of net sales.

Merchandise inventories were $1,315 million vs $1,141 million at the end of the first quarter of fiscal 2024, a 15 per cent increase, while comparable store inventories decreased 8 per cent compared to the first quarter of fiscal 2024. Reserve inventory was 48 per cent of total inventory at the end of the first quarter of fiscal 2025 compared to 40 per cent at the end of the first quarter of fiscal 2024. Reserve inventory is largely composed of merchandise that is purchased opportunistically and will be sent to stores in future months or next season.

“The changing landscape of tariffs creates risks and opportunities for our business. We have many advantages that traditional retailers do not have. We can move more rapidly and more flexibly. The next several months could be challenging but, if we navigate this well, then we expect to come out ahead,” O’Sullivan added.

“It is important to look through the short-term disruption caused by tariffs. Whatever level tariffs settle at, vendors will adjust and relocate to the lowest cost source of production. We do not believe that tariffs are going to change the longer-term structural dynamics of the retail industry. These dynamics are driving the growth of off-price retail and our business. We are excited by and focused on our long-term full potential,” O’Sullivan concluded.

ALCHEMPro News Desk (RR)