Burlington Stores' Q2 Earnings Beat Estimates on Higher Sales & Margins

Burlington Stores, Inc. BURL reported second-quarter fiscal 2025 results, wherein revenues and earnings grew year over year and surpassed the Zacks Consensus Estimate.Burlington Stores achieved higher sales year over year in the second quarter, driven by effective merchandising, supply-chain improvements and store-expansion efforts. Earnings exceeded expectations, supported by higher sales, margins and operational efficiencies. Management has raised fiscal 2025 guidance for comparable store sales, total sales, adjusted EBIT margin and adjusted EPS. Driven by solid second-quarter earnings and higher guidance, BURL’s shares have jumped nearly 5% during trading hours yesterday. In the past three months, this Zacks Rank #3 (Hold) company has gained 29.3% against the industry’s 1.7% dip.More on Burlington Stores’ Q2 Financial ResultsBurlington Stores reported adjusted earnings of $1.72 per share, which surpassed the Zacks Consensus Estimate of $1.27. The bottom line rose 39% from the year-ago quarter to 42 cents, which is above the company’s high-end guided range. Robust merchandise margins and cost efficiencies across the P&L aided the bottom line.Burlington Stores, Inc. Price, Consensus and EPS Surprise Burlington Stores, Inc. price-consensus-eps-surprise-chart | Burlington Stores, Inc. QuoteTotal revenues of $2,705.1 million jumped 9.7% from the prior-year quarter and topped the Zacks Consensus Estimate of $2,639 million. Net revenues climbed nearly 10% to $2,701 million, while other revenues fell 7% to $4 million. The company’s comparable store sales increased 5% year over year. Our model had anticipated 1% rise in comparable store sales for the fiscal second quarter.Insight Into BURL’s MarginsThe gross margin was 43.7%, up 90 basis points (bps) from the second quarter of fiscal 2024. This also surpassed our estimate of gross margin of 43.2%. The merchandise margin increased 60 bps, backed by lower shortage and markdowns, while freight expenses improved 30 bps as a percentage of net sales.Adjusted selling, general and administrative (SG&A) expenses rose 9.7% year over year to $732.3 million. Adjusted SG&A expenses, as a percentage of net sales, were 26.7%, down 30 bps from the second quarter of fiscal 2024. We estimated adjusted SG&A expenses, as a percentage of net sales, to be 26.5%. Product sourcing costs were $209 million, up from $191 million in the year-ago quarter. Such costs comprise the processing goods costs via its supply chain and buying expenses.Adjusted EBITDA increased 25.4% from the second quarter of fiscal 2024 to $257 million, excluding $11 million of expenses related to the bankruptcy-acquired leases. Adjusted EBIT was $162 million, up 37.3% from the year-ago quarter.BURL’s Financial Snapshot: Cash, Debt and EquityThe company ended the reported quarter with cash and cash equivalents of $747.6 million, long-term debt of $2.02 billion and stockholders’ equity of $1.45 billion. BURL exited the fiscal second quarter with $1.69 billion of liquidity, including $748 million of unrestricted cash and $946 million available under its ABL facility.Burlington Stores ended the quarter with $2.04 billion of outstanding total debt, comprising $1.73 billion under its term-loan facility, $297 million of convertible notes and no borrowings under its ABL facility.The company bought back 102,474 shares for $26 million under its share repurchase plan in the fiscal second quarter. As of Aug. 2, 2025, BURL had $632 million remaining under its existing share repurchase authorizations.BURL’s Q3 & Q4 GuidanceManagement cited that tariffs are likely to put incremental pressure on the back half. Nevertheless, the company’s revised guidance assumes that it will be able to offset most, but not all, of such incremental tariff pressure. For the third quarter of fiscal 2025, the company expects total sales growth of 5-7%, with comparable store sales expected to remain between flat and up 2% year over year. The adjusted EBIT margin is projected in the range of down 20 bps to flat year over year, excluding about $10 million of expected expenses related to bankruptcy-acquired leases in the fiscal third quarter.Third-quarter adjusted earnings per share (EPS) are expected to be between $1.50 and $1.60 compared with $1.55 earned in the prior-year quarter. Management expects an effective tax rate of almost 25%. For the fourth quarter of fiscal 2025, BURL expects comparable store sales growth of flat to 2% and total sales growth of 7-9%. EBIT margins are likely to range from a decline of 10 bps to an increase of 30 bps and adjusted EPS in the band of $4.30-$4.60. The fourth-quarter guidance excludes nearly $7 million of expenses related to the bankruptcy-acquired leases.Fiscal 2025 View for BURLFor fiscal 2025, the company now expects total sales to increase in the band of 7-8% year over year, versus the prior expectation of a 6-8% rise. This projection now assumes comparable store sales to rise 1-2% versus the earlier anticipation between 0% and 2%. BURL recorded sales growth of 11% and comparable store sales increase of 4% in the 52 weeks ending Feb. 1, 2025. Capital expenditures, net of landlord allowances, are expected to be approximately $950 million. Depreciation and amortization are likely to be $385 million, while net interest expenses are projected to be $50 million. Management forecasts an adjusted effective tax rate of about 25% for the current fiscal year. The company plans to open around 100 net stores. The adjusted EBIT margin is expected to improve 20-40 bps from the previous fiscal year, excluding $33 million of planned costs with respect to the bankruptcy-acquired leases in fiscal 2025. Adjusted EPS is now projected to be between $9.19 and $9.59, higher than $8.70-$9.30 expected earlier and $8.35 earned in the prior fiscal year. This excludes $25 million, net of tax, of expected expenses related to bankruptcy-acquired leases in fiscal 2025 and assumes a count of roughly 64 million shares.Key PicksLevi Strauss & Co. LEVI, designer and marketer of jeans, casual wear and related accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The consensus estimate for Levi Strauss’ current financial-year EPS indicates growth of 4% from the year-ago figure. LEVI delivered an average earnings surprise of 25.9% in the trailing four quarters.Genesco Inc. GCO operates as a retailer and wholesaler of footwear, apparel and accessories, carrying a Zacks Rank #2 (Buy) at present. GCO delivered a trailing four-quarter earnings surprise of 32.4%, on average.The Zacks Consensus Estimate for Genesco’s current fiscal-year EPS and sales indicates growth of 66% and 1.7%, respectively, from the year-ago period’s reported figures.Allbirds, Inc. (BIRD), a lifestyle brand, currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 20.7%, on average.The Zacks Consensus Estimate for BIRD’s current financial-year EPS indicates growth of 18.3% from the year-ago figure. Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Genesco Inc. (GCO): Free Stock Analysis Report Burlington Stores, Inc. (BURL): Free Stock Analysis Report Levi Strauss & Co. (LEVI): Free Stock Analysis Report Allbirds, Inc. (BIRD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks