Burlington Stores, Inc. (NYSE:BURL) shares climbed 7% on Thursday after the off-price retailer delivered second-quarter results that blew past Wall Street expectations and lifted its full-year earnings forecast.
The company reported adjusted earnings of $1.72 per share, well above analysts’ estimates of $1.29. Revenue rose 10% year-over-year to $2.71 billion, topping the consensus forecast of $2.63 billion. Comparable store sales advanced 5%, consistent with the growth rate posted a year earlier.
Burlington raised its full-year adjusted EPS guidance to between $9.19 and $9.59, up from its prior projection of $8.70 to $9.30.
“We are pleased with our exceptional performance in the second quarter,” said Michael O’Sullivan, CEO. “This was a high-quality earnings beat driven by ahead of plan sales, higher merchandise margin, lower freight expense and leverage on SG&A expenses.”
Gross margin expanded by 90 basis points to 43.7%, with merchandise margin improving by 60 basis points thanks to fewer markdowns and lower inventory shortages. Adjusted EBIT margin rose by 120 basis points, while adjusted EPS surged 39% compared with last year’s second quarter.
Looking ahead, Burlington expects third-quarter sales to grow between 5% and 7%, with comparable store sales increasing 0% to 2%. The company guided adjusted EPS in the range of $1.50 to $1.60 for the quarter.
As part of its growth strategy, Burlington plans to open roughly 100 net new stores this year. The retailer closed the quarter with total liquidity of $1.69 billion, including $748 million in unrestricted cash.
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