US retailer Burlington Stores' sales up 10% in Q2 FY25

The company’s gross margin rate as a percentage of net sales was 43.7 per cent as against 42.8 per cent for the second quarter of fiscal 2024, an increase of 90 basis points. Merchandise margin expanded 60 basis points, driven by lower shortage and reduced markdowns, while freight expense improved 30 basis points as a percentage of net sales.

“We are pleased with our exceptional performance in the second quarter. Comparable store sales increased 5 per cent, which was on top of 5 per cent comparable store sales growth in the second quarter of last year. We also saw very strong margin and earnings performance. Adjusted EBIT Margin increased 120 basis points, while Adjusted EPS grew 39 per cent versus the second quarter of last year. This was a high-quality earnings beat driven by ahead of plan sales, higher merchandise margin, lower freight expense and leverage on SG&A expenses,” Michael O’Sullivan, CEO, said.

Total sales increased 8 per cent compared to the first six months of fiscal 2024. Net income increased 28 per cent compared to the same period in fiscal 2024 to $195 million, or $3.05 per share as compared to $2.37 per share in the prior period. Adjusted EBIT, excluding $17 million and $9 million, respectively, of expenses associated with bankruptcy acquired leases, was $314 million as compared to $254 million in the first six months of fiscal 2024, an increase of 80 basis points as a percentage of sales, as per the company press release.

“Given the strength of the second quarter, we are raising our full year earnings guidance. As for sales, consistent with our off-price playbook, we are maintaining our previously issued guidance for 0 per cent to 2 per cent comp growth in the third and fourth quarters. The third quarter is off to a solid start, and as is our practice, we will manage our business conservatively and be ready to chase,” O’Sullivan continued.

For fiscal 2025, the company expects total sales to increase in the range of 7 per cent to 8 per cent on top of the 11 per cent increase for the 52-weeks ended February 1, 2025. The comparable store sales will increase in the range of 1 per cent to 2 per cent, on top of the 4 per cent increase for the 52-weeks ended February 1, 2025.

“We see a clear link between our very strong second quarter sales and earnings results and the key Burlington 2.0 strategies.  We are excited because these initiatives are in the early stages of their potential impact, which we believe will grow over time and will drive our longer-term performance,” concluded O’Sullivan.

ALCHEMPro News Desk (RR)