Burlington Stores Inc. (NYSE:BURL) shares declined 2.88% on Thursday after the off-price retailer reported second-quarter revenue slightly below Wall Street expectations, despite delivering adjusted earnings comfortably ahead of forecasts.
Adjusted earnings per share reached $2.37, exceeding the analyst consensus of $2.17. Revenue came in at approximately $3 billion, narrowly below expectations of $3.02 billion.
Total sales increased 11% year over year to $2.998 billion, while comparable store sales advanced 2%. The comparable sales growth followed a 5% increase in the corresponding period last year.
Earnings increase as operating margin expands
Burlington’s adjusted EPS increased 38% compared with the second quarter of fiscal 2025, supported by a 100-basis-point improvement in operating margin.
The company also received $55 million in tariff refunds during the quarter. Rather than retaining the entire benefit, Burlington plans to reinvest part of the proceeds into offering stronger value to customers during the second half of the year.
“We are pleased with our strong financial performance in the second quarter,” said CEO Michael O’Sullivan. “This represented our 15th consecutive quarter of double digit EPS growth, reflecting our ability to consistently convert sales growth into margin expansion and exceptional earnings growth.”
Burlington raises full-year profit outlook
Following the quarterly performance, Burlington increased its adjusted EPS guidance for fiscal 2026 to between $11.77 and $11.97.
The midpoint of the new range, at $11.87, compares with adjusted EPS of $10.17 in the previous year and represents growth of approximately 17%.
The retailer continues to expect comparable store sales to increase between 3% and 4% for the full year, while total sales are projected to grow between 10% and 11%.
Tariff savings to be reinvested in customer value
For the third quarter, Burlington expects adjusted EPS of between $1.60 and $1.70, giving a midpoint of $1.65. That compares with adjusted EPS of $1.80 in the corresponding period last year.
The outlook incorporates Burlington’s plan to reinvest approximately 40% of the tariff refunds received during the second quarter. The strategy is intended to pass part of those savings to customers through more competitive value rather than allowing the refunds to provide only a temporary boost to earnings.
Store expansion remains on track
Burlington ended the quarter with 1,287 stores and continues to expand its physical footprint. The company plans to open approximately 115 net new locations during fiscal 2026.
While the modest revenue miss and third-quarter earnings outlook weighed on the shares following the announcement, Burlington’s 38% increase in adjusted EPS, improved operating margin, higher full-year earnings guidance and continued store expansion highlighted the retailer’s ongoing growth and profitability.