Key Takeaways
- Burlington Stores reported profit and sales that beat forecasts as it reduced inventories and drew in more shoppers later in the first quarter.
- The off-price retailer’s gross margin improved as it limited promotions and lowered freight costs.
- The news sent Burlington Stores shares to their highest level in more than two years.
Burlington Stores (BURL) shares flew higher when the off-price apparel retailer posted better-than-expected results and strong guidance on reduced inventories and a pickup in demand later in the first quarter.
The company reported quarterly net income of $78.5 million, more than double the same period in 2023. Adjusted earnings per share (EPS) came in at $1.42, and revenue was up 11% to $2.36 billion. Both exceeded forecasts. Comparable store sales rose 2%.
Overall gross margin improved to 43.5% from 42.3% a year ago. Merchandise gross margin rose 90 basis points (bps) as the company cut back on promotions, while freight expense improvements added 30 bps.
Burlington Inventories Dropped From Year Ago
Merchandise inventories dropped 7% to $1.14 billion from $1.23 billion a year earlier, and comparable store inventories fell 6%.
Chief Executive Officer (CEO) Michael O’Sullivan noted that the quarter “got off to a slow start in February,” which he said was likely caused by bad weather and delayed tax refunds. However, sales trends picked up from there, with comparable store sales rising 4% during March and April combined.
The company sees full-year adjusted EPS of $7.35 to $7.75, with the midpoint above analysts’ estimates.
Shares of Burlington Stores soared 18.6% as of 1:10 p.m. ET Thursday to $237.66, their highest level since early 2022.