Burlington Stores, a prominent off-price retailer, has reported impressive fiscal second-quarter sales that surpassed market predictions. The company not only showed resilience in a fluctuating economic landscape but also revised upward the midpoint of its full-year revenue guidance, signaling confidence in its business strategy.
According to the latest financial data, Burlington's revenue escalated to $2.47 billion for the three months ending August 3, a substantial increase from $2.17 billion during the same period last year, and exceeding the average analyst estimate of $2.42 billion as tracked by Capital IQ. The GAAP earnings per share also showcased significant growth, jumping to $1.15 from $0.47 year-over-year, beating analyst expectations of $0.84 EPS.
In a statement from Chief Executive Michael O'Sullivan, he noted, "Both sales and comparable store sales were well ahead of our expectations." O'Sullivan attributed this growth to strategic initiatives that focus on delivering exceptional value right from the initial ticketed prices. He stated, "Our merchants are focused on offering really sharp value out of the gate at the initial ticketed price," emphasizing how this approach leads to quicker sales turnover and reduced markdowns.
This reduction in markdowns further translates to less inventory reaching the clearance ranks, benefiting overall sales. The company's performance was notably bolstered by the addition of 36 net new stores during the second quarter, a strategic move that reflects Burlington's commitment to expanding its market presence.
Looking ahead, Burlington has adjusted its fiscal 2024 outlook, projecting a total sales increase of 9% to 10%, which raises the lower-end of its previous guidance from 8%. The company now anticipates comparable store sales growth to be in the range of 2% to 3%, an increase from its earlier estimate of flat to up 2%. Analysts are optimistic about Burlington's trajectory, with consensus estimates predicting revenue of $10.59 billion for the ongoing fiscal year.
The company has also lifted its adjusted EPS target to a range between $7.66 and $7.96, a notable improvement compared to the prior guidance range of $7.35 to $7.75 announced at the end of May. In discussing the future, O'Sullivan addressed potential challenges, stating, "Based on our year-to-date performance, we are increasing our margin and earnings guidance for the full year, despite some incremental cost pressure from ocean freight." He also highlighted the necessity for a cautious approach, noting that the company is maintaining its comparable store sales guidance of 0% to 2% growth for the second half of the year, indicating prudent business planning in light of market dynamics. As for the upcoming third quarter, Burlington anticipates sales growth between 10% to 12% over the $2.29 billion reported for the same period in 2023.
The company projects comparable sales to remain flat to increase by 2%. Analysts forecast revenue of $2.53 billion for the current quarter, with Burlington expecting adjusted EPS in the range of $1.45 to $1.55, slightly higher than the $1.39 estimate prior to these announcements. As of the latest trading data, Burlington's stock is priced at $274.32, reflecting a change of +1.43, or a percent change of +0.52.
This strong performance underscores Burlington Stores' adaptability and forward-thinking strategies, positioning the retailer for continued success in a competitive market landscape..