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

Core Insights - Burlington Stores, Inc. (BURL) reported strong second-quarter fiscal 2025 results, with revenues and earnings growing year over year and exceeding the Zacks Consensus Estimate [1][2] - The company achieved higher sales due to effective merchandising, supply-chain improvements, and store expansion efforts [1][4] - Management raised fiscal 2025 guidance for comparable store sales, total sales, adjusted EBIT margin, and adjusted EPS following robust second-quarter earnings [2][14] Financial Performance - Adjusted earnings per share (EPS) for the second quarter were $1.72, surpassing the Zacks Consensus Estimate of $1.27, and rose 39% from the previous year [3][4] - Total revenues reached $2,705.1 million, a 9.7% increase from the prior-year quarter, exceeding the Zacks Consensus Estimate of $2,639 million [4][9] - Comparable store sales increased by 5% year over year, outperforming the anticipated 1% rise [4][9] Margin Analysis - Gross margin improved to 43.7%, up 90 basis points from the second quarter of fiscal 2024, exceeding the estimated gross margin of 43.2% [5][6] - Merchandise margin increased by 60 basis points, supported by lower shortages and markdowns [5] - Adjusted selling, general and administrative (SG&A) expenses rose 9.7% year over year to $732.3 million, but as a percentage of net sales, it decreased to 26.7% [6] EBITDA and EBIT - Adjusted EBITDA increased by 25.4% year over year to $257 million, excluding $11 million of expenses related to bankruptcy-acquired leases [7] - Adjusted EBIT was $162 million, reflecting a 37.3% increase from the previous year [7] Balance Sheet Overview - As of the end of the reported quarter, Burlington Stores had cash and cash equivalents of $747.6 million, long-term debt of $2.02 billion, and stockholders' equity of $1.45 billion [8][9] - The company had $1.69 billion in liquidity, including $748 million in unrestricted cash and $946 million available under its asset-based lending (ABL) facility [8] Future Guidance - For the third quarter of fiscal 2025, total sales growth is expected to be between 5-7%, with comparable store sales projected to remain flat to up 2% year over year [11] - Adjusted EPS for the third quarter is anticipated to be between $1.50 and $1.60 [12] - For the fourth quarter, comparable store sales growth is expected to be flat to 2%, with total sales growth projected at 7-9% [13] - Fiscal 2025 guidance now anticipates total sales growth of 7-8% year over year, with comparable store sales expected to rise 1-2% [14][16]