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Key Takeaways
- Burlington Stores posted better-than-expected results and boosted its outlook on strong sales and improved supply chains, but warned about ocean freight costs.
- Profit more than doubled from the year ago period, as revenue jumped 13%.
- CEO Michael O’Sullivan noted even with some cost pressure from ocean freight, the retailer was increasing its profit forecasts.
Burlington Stores (BURL) Thursday posted a higher-than-estimated doubling of its profits and raised its outlook for the year, although it warned about increasing ocean shipping costs.
The department store chain reported second-quarter net profit of $73.8 million, up from $30.9 million a year ago, and adjusted earnings per share (EPS) of $1.24, as revenue rose 13.4% to $2.47 billion. All exceeded estimates. Comparable store sales climbed 5%.
Chief Executive Officer (CEO) Michael O’Sullivan said that both revenue and comparable store sales were well above company expectations. He added that the strong quarterly results were “driven by the ahead of plan sales, as well as a significant increase in gross margin, and faster than expected progress in our supply chain efficiency initiatives.”
CEO Says Planning Business ‘Cautiously’
O’Sullivan said the company was boosting its full-year outlook “based on the year-to-date performance” but also noted that the company is facing “some incremental cost pressure from ocean freight.” He said “there are some risks, so we are planning our business cautiously.”
The company now expects adjusted EPS in a range of $7.66 to $7.96 from the previous $7.35 to $7.75, and earnings before interest and taxes (EBIT) margin to grow 50 to 70 basis points (bps) versus the earlier 40 to 60 bps.