Burlington Stores, Inc. Reports First Quarter 2024 Earnings
Burlington Stores, Inc. (NYSE: BURL) reported its first quarter 2024 earnings, showing an 11% increase in total sales to $2,357 million and a net income of $79 million. The company's diluted EPS was $1.22, and comparable store sales rose by 2%. On a non-GAAP basis, adjusted EPS saw a 68% rise to $1.42, and adjusted EBIT margin improved by 170 basis points. Gross margin rate increased to 43.5% from 42.3% in the previous year. Looking forward, Burlington has raised its FY24 adjusted EPS guidance to $7.35-$7.75 and expects total sales to grow by 8% to 10%. CEO Michael O’Sullivan expressed satisfaction with the quarter's performance, noting significant earnings growth and margin improvement. Moreover, the company repurchased 312,238 shares for $63 million and ended the quarter with $1,521 million in liquidity. For the next quarter, Burlington anticipates a 9% to 11% sales increase and adjusted EPS of $0.83 to $0.93.
- Total sales increased by 11% to $2,357 million.
- Net income rose to $79 million.
- Diluted EPS increased to $1.22.
- Comparable store sales increased by 2%.
- Adjusted EPS rose by 68% to $1.42.
- Adjusted EBIT margin improved by 170 basis points.
- Gross margin rate increased by 120 basis points to 43.5%.
- Product sourcing costs decreased by $4 million.
- SG&A expenses improved by 40 basis points as a percentage of net sales.
- The company repurchased 312,238 shares for $63 million.
- Liquidity stood at $1,521 million.
- FY24 adjusted EPS guidance was increased to $7.35-$7.75.
- Burlington expects 8% to 10% sales growth for FY24.
- The effective tax rate increased to 28.4%.
- Adjusted SG&A expenses increased by 60 basis points as a percentage of net sales.
- The adjusted effective tax rate increased to 28.1%.
- Inventory decreased by 7% compared to the previous year.
Burlington Stores, Inc. has posted a strong performance for the first quarter of Fiscal Year 2024. The headline numbers show an
The Adjusted EBIT margin rose by 170 basis points and adjusted EPS increased by 68% to
Investors should note that despite the positive performance, the CEO highlighted ongoing uncertainties in the external environment and maintained a cautious outlook for comparable store sales growth at
The company also plans to open approximately 100 new stores, reflecting a solid growth strategy. However, the effective tax rate has increased to
Overall, Burlington's Q1 2024 results indicate robust operational performance and strategic focus, with some caution due to external factors.
Burlington’s performance in the first quarter of FY 2024 showcases a promising trend for the retail sector. The 2% increase in comparable store sales and a notable 11% increase in total sales suggest that consumers are continuing to spend despite broader economic uncertainties. The company’s ability to maintain and even improve margins in a competitive retail environment speaks to efficient inventory and supply chain management.
Particularly interesting is the decrease in merchandise inventories by
The company’s expansion plans, including opening 100 new stores, are ambitious yet indicative of confidence in market demand. This aggressive growth strategy, coupled with a focus on maintaining a lean inventory, can drive future sales and profitability.
Investors should also consider the implications of the increased liquidity, which stands at
- On a GAAP basis, total sales increased
11% , net income was$79 million , and diluted EPS was$1.22 - Comparable store sales increased
2% - On a non-GAAP basis, excluding certain expenses associated with the acquisition of Bed Bath & Beyond leases:
- Adjusted EBIT margin increased 170 basis points, and
- Adjusted EPS increased
68% to$1.42
- Increasing outlook for FY24 Adjusted EPS to
$7.35 -$7.75 , an increase of18% to24% over FY23 on a 52-week basis; guidance excludes certain expenses associated with the acquisition of Bed Bath & Beyond leases
BURLINGTON, N.J., May 30, 2024 (GLOBE NEWSWIRE) -- Burlington Stores, Inc. (NYSE: BURL), a nationally recognized off-price retailer of high-quality, branded apparel, footwear, accessories, and merchandise for the home at everyday low prices, today announced its results for the first quarter ended May 4, 2024.
Michael O’Sullivan, CEO, stated, “We are very pleased with how our sales trends developed in the first quarter. The quarter got off to a slow start in February, likely due to disruptive weather and delayed tax refunds, but then our sales trend picked up. Comparable store sales increased
Mr. O’Sullivan continued, “We were especially pleased with our margin improvement and earnings growth during the first quarter. Our Adjusted EBIT Margin and Adjusted EPS increased 170 basis points and
Mr. O’Sullivan concluded, “Looking to the balance of 2024, we remain confident in the outlook for our business. Based on our first quarter performance, we are increasing our margin and earnings guidance for the year. Nevertheless, there continues to be a lot of uncertainty in the external environment. It makes sense to be cautious, so we are maintaining our comparable stores sales guidance of
Fiscal 2024 First Quarter Operating Results (for the 13-week period ended May 4, 2024, compared with the 13-week period ended April 29, 2023)
- Total sales increased
11% compared to the first quarter of Fiscal 2023 to$2,357 million , while comparable store sales increased2% compared to the first quarter of Fiscal 2023. - Gross margin rate as a percentage of net sales was
43.5% vs.42.3% for the first quarter of Fiscal 2023, an increase of 120 basis points. Merchandise margin expanded by 90 basis points, primarily driven by lower markdowns, while freight expense improved 30 basis points. - Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were
$183 million vs.$187 million in the first quarter of Fiscal 2023. Product sourcing costs include the costs of processing goods through our supply chain and buying costs. - SG&A was
35.0% as a percentage of net sales vs.35.4% in the first quarter of Fiscal 2023, improving by 40 basis points. Adjusted SG&A was27.1% as a percentage of net sales vs.26.5% in the first quarter of Fiscal 2023, an increase of 60 basis points. - The effective tax rate was
28.4% vs.24.4% in the first quarter of Fiscal 2023. The Adjusted Effective Tax Rate was28.1% vs.24.5% in the first quarter of Fiscal 2023. - Net income was
$79 million , or$1.22 per share vs.$33 million , or$0.50 per share for the first quarter of Fiscal 2023. Adjusted Net Income, excluding approximately$4 million of expenses, net of tax, associated with the acquisition of Bed Bath & Beyond leases, was$91 million , or$1.42 per share, vs.$55 million , or$0.84 per share for the first quarter of Fiscal 2023. - Diluted weighted average shares outstanding amounted to 64.3 million during the quarter compared with 65.3 million during the first quarter of Fiscal 2023.
- Adjusted EBITDA, excluding approximately
$6 million of expenses associated with the acquisition of Bed Bath & Beyond leases, was$217 million vs.$157 million in the first quarter of Fiscal 2023, an increase of 180 basis points as a percentage of sales. Adjusted EBIT, excluding approximately$6 million of expenses associated with the acquisition of Bed Bath & Beyond leases, was$135 million vs.$87 million in the first quarter of Fiscal 2023, an increase of 170 basis points as a percentage of sales.
Inventory
- Merchandise inventories were
$1,141 million vs.$1,231 million at the end of the first quarter of Fiscal 2023, a7% decrease, while comparable store inventories decreased6% compared to the first quarter of Fiscal 2023. Reserve inventory was40% of total inventory at the end of the first quarter of Fiscal 2024 compared to44% at the end of the first quarter of Fiscal 2023. Reserve inventory is largely composed of merchandise that is purchased opportunistically and that will be sent to stores in future months or next season.
Liquidity and Debt
- The Company ended the first quarter of Fiscal 2024 with
$1,521 million in liquidity, comprised of$742 million in unrestricted cash and$779 million in availability on its ABL facility. - The Company ended the first quarter of Fiscal 2024 with
$1,405 million in outstanding total debt, including$931 million on its Term Loan facility,$453 million in Convertible Notes, and no borrowings on its ABL facility.
Common Stock Repurchases
- During the first quarter of Fiscal 2024 the Company repurchased 312,238 shares of its common stock under its share repurchase program for
$63 million . As of the end of the first quarter of Fiscal 2024, the Company had$442 million remaining on its current share repurchase program authorization.
Outlook
For the full Fiscal Year 2024 (the 52-weeks ending February 1, 2025), the Company now expects:
- Total sales to increase in the range of
8% to10% on top of the10% increase for the 52-weeks ended January 27, 2024; this assumes comparable store sales will increase in the range of0% to2% , on top of the4% increase for the 52-weeks ended January 27, 2024; - Capital expenditures, net of landlord allowances, to be approximately
$750 million ; - To open approximately 100 net new stores;
- Depreciation and amortization to be approximately
$350 million ; - Adjusted EBIT margin to increase in the range of 40 to 60 basis points versus the 52 weeks ended January 27, 2024; this Adjusted EBIT margin increase excludes approximately
$9 million of anticipated expenses related to the acquired Bed Bath & Beyond leases in Fiscal 2024 versus$18 million incurred in Fiscal 2023; - Net interest expense to be approximately
$43 million ; - An Adjusted Effective Tax Rate of approximately
26.5% ; and - Adjusted EPS in the range of
$7.35 t o$7.75 , which excludes$0.10 , net of tax, of expenses associated with the acquired Bed Bath & Beyond leases. This assumes a fully diluted share count of approximately 64 million shares. This compares to$6.24 in Adjusted EPS last year, excluding$0.03 of Adjusted EPS from the 53rd week last year and$0.21 , net of tax, of expenses associated with the acquired Bed Bath & Beyond leases.
For the second quarter of Fiscal 2024 (the 13 weeks ending August 3, 2024), the Company expects:
- Total sales to increase in the range of
9% to11% ; this assumes comparable store sales will increase in the range of0% to2% versus the second quarter of Fiscal 2023; - Adjusted EBIT margin to increase 30 to 50 basis points versus the second quarter of Fiscal 2023;
- An Adjusted Effective Tax Rate of approximately
26% ; and - Adjusted EPS in the range of
$0.83 t o$0.93 , as compared to$0.63 in Adjusted EPS last year; both periods exclude$0.03 , net of tax, of expenses related to the acquired Bed Bath & Beyond leases.
The Company has not presented a quantitative reconciliation of the forward-looking non-GAAP financial measures set out above to their most comparable GAAP financial measures because it would require the Company to create estimated ranges on a GAAP basis, which would entail unreasonable effort. Adjustments required to reconcile forward-looking non-GAAP measures cannot be predicted with reasonable certainty but may include, among others, costs related to debt amendments, loss on extinguishment of debt, and impairment charges, as well as the tax effect of such items. Some or all of those adjustments could be significant.
Note Regarding Non-GAAP Financial Measures
The foregoing discussion of the Company’s operating results includes references to Adjusted SG&A, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Share (or Adjusted EPS), Adjusted EBIT (or Adjusted Operating Margin), and Adjusted Effective Tax Rate. The Company believes these supplemental measures are useful in evaluating the performance of our business and provide greater transparency into our results of operations. In particular, we believe that excluding certain items that may vary substantially in frequency and magnitude from what we consider to be our core operating results are useful supplemental measures that assist investors and management in evaluating our ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods. These non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures later in this document.
First Quarter 2024 Conference Call
The Company will hold a conference call on May 30, 2024, at 8:30 a.m. ET to discuss the Company’s first quarter results. The U.S. toll free dial-in for the conference call is 1-800-715-9871 (passcode: 3047342) and the international dial-in number is 1-646-307-1963. A live webcast of the conference call will also be available on the investor relations page of the company's website at www.burlingtoninvestors.com.
For those unable to participate in the conference call, a replay will be available after the conclusion of the call on May 30, 2024 beginning at 11:30 a.m. ET through June 6, 2024 11:59 p.m. ET. The U.S. toll-free replay dial-in number is 1-800-770-2030 and the international replay dial-in number is 1-609-800-9909. The replay passcode is 3047342.
About Burlington Stores, Inc.
Burlington Stores, Inc., headquartered in New Jersey, is a nationally recognized off-price retailer with Fiscal 2023 net sales of
For more information about the Company, visit www.burlington.com.
Investor Relations Contacts:
David J. Glick
Daniel Delrosario
855-973-8445
Info@BurlingtonInvestors.com
Allison Malkin
ICR, Inc.
203-682-8225
Safe Harbor for Forward-Looking and Cautionary Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this release, including those about our potential performance in the next five years, the external environment, as well as statements describing our outlook for future periods, are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. We do not undertake to publicly update or revise our forward-looking statements, except as required by law, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those we expected, including general economic conditions, such as inflation, and the domestic and international political situation and the related impact on consumer confidence and spending; competitive factors, including the scale and potential consolidation of some of our competitors, rise of e-commerce spending, pricing and promotional activities of major competitors, and an increase in competition within the markets in which we compete; seasonal fluctuations in our net sales, operating income and inventory levels; the reduction in traffic to, or the closing of, the other destination retailers in the shopping areas where our stores are located; our ability to identify changing consumer preferences and demand; our ability to meet our environmental, social or governance (“ESG”) goals or otherwise expectations of our stakeholders with respect to ESG matters; extreme and/or unseasonable weather conditions caused by climate change or otherwise adversely impacting demand; effects of public health crises, epidemics or pandemics; our ability to sustain our growth plans or successfully implement our long-range strategic plans; our ability to execute our opportunistic buying and inventory management process; our ability to optimize our existing stores or maintain favorable lease terms; the availability, selection and purchasing of attractive brand name merchandise on favorable terms; our ability to attract, train and retain quality employees and temporary personnel in sufficient numbers; labor costs and our ability to manage a large workforce; the solvency of parties with whom we do business and their willingness to perform their obligations to us; import risks, including tax and trade policies, tariffs and government regulations; disruption in our distribution network; our ability to protect our protect our information systems against service interruption, misappropriation of data, breaches of security, or other cyber-related attacks; risks related to the methods of payment we accept; the success of our advertising and marketing programs in generating sufficient levels of customer traffic and awareness; damage to our corporate reputation or brand; impact of potential loss of executives or other key personnel; our ability to comply with existing and changing laws, rules, regulations and local codes; lack of or insufficient insurance coverage; issues with merchandise safety and shrinkage; our ability to comply with increasingly rigorous privacy and data security regulations; impact of legal and regulatory proceedings relating to us; use of social media by us or by third parties our direction in violation of applicable laws and regulations; our ability to generate sufficient cash to fund our operations and service our debt obligations; our ability to comply with covenants in our debt agreements; the consequences of the possible conversion of our convertible notes; our reliance on dividends, distributions and other payments, advance and transfers of funds from our subsidiaries to meet our obligations; the volatility of our stock price; the impact of the anti-takeover provisions in our governing documents; impact of potential shareholder activism; and each of the factors that may be described from time to time in our filings with the U.S. Securities and Exchange Commission, including under the heading “Risk Factors” in our most recent Annual Report on Form 10-K. For each of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended.
BURLINGTON STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (All amounts in thousands, except per share data) | ||||||||
Three Months Ended | ||||||||
May 4, | April 29, | |||||||
2024 | 2023 | |||||||
REVENUES: | ||||||||
Net sales | $ | 2,357,318 | $ | 2,132,793 | ||||
Other revenue | 4,235 | 4,163 | ||||||
Total revenue | 2,361,553 | 2,136,956 | ||||||
COSTS AND EXPENSES: | ||||||||
Cost of sales | 1,330,726 | 1,231,646 | ||||||
Selling, general and administrative expenses | 825,226 | 755,628 | ||||||
Depreciation and amortization | 81,965 | 70,529 | ||||||
Impairment charges - long-lived assets | 8,210 | 844 | ||||||
Other income - net | (10,862 | ) | (8,998 | ) | ||||
Loss on extinguishment of debt | — | 24,644 | ||||||
Interest expense | 16,649 | 19,345 | ||||||
Total costs and expenses | 2,251,914 | 2,093,638 | ||||||
Income before income tax expense | 109,639 | 43,318 | ||||||
Income tax expense | 31,125 | 10,570 | ||||||
Net income | $ | 78,514 | $ | 32,748 | ||||
Diluted net income per common share | $ | 1.22 | $ | 0.50 | ||||
Weighted average common shares - diluted | 64,267 | 65,291 |
BURLINGTON STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (All amounts in thousands) | ||||||||||||
May 4, | February 3, | April 29, | ||||||||||
2024 | 2024 | 2023 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 742,332 | $ | 925,359 | $ | 532,443 | ||||||
Restricted cash and cash equivalents | — | — | 6,582 | |||||||||
Accounts receivable—net | 100,654 | 74,361 | 78,477 | |||||||||
Merchandise inventories | 1,140,800 | 1,087,841 | 1,231,092 | |||||||||
Assets held for disposal | 27,963 | 23,299 | 5,120 | |||||||||
Prepaid and other current assets | 226,378 | 216,164 | 136,751 | |||||||||
Total current assets | 2,238,127 | 2,327,024 | 1,990,465 | |||||||||
Property and equipment—net | 1,934,547 | 1,880,325 | 1,678,461 | |||||||||
Operating lease assets | 3,149,161 | 3,132,768 | 2,968,247 | |||||||||
Goodwill and intangible assets—net | 285,064 | 285,064 | 285,064 | |||||||||
Deferred tax assets | 2,313 | 2,436 | 3,079 | |||||||||
Other assets | 86,040 | 79,223 | 78,563 | |||||||||
Total assets | $ | 7,695,252 | $ | 7,706,840 | $ | 7,003,879 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 929,759 | $ | 956,350 | $ | 829,212 | ||||||
Current operating lease liabilities | 395,948 | 411,395 | 402,622 | |||||||||
Other current liabilities | 602,973 | 647,338 | 472,926 | |||||||||
Current maturities of long term debt | 168,642 | 13,703 | 13,753 | |||||||||
Total current liabilities | 2,097,322 | 2,028,786 | 1,718,513 | |||||||||
Long term debt | 1,236,658 | 1,394,942 | 1,350,416 | |||||||||
Long term operating lease liabilities | 3,016,027 | 2,984,794 | 2,842,785 | |||||||||
Other liabilities | 73,210 | 73,793 | 70,082 | |||||||||
Deferred tax liabilities | 240,609 | 227,593 | 220,609 | |||||||||
Stockholders' equity | 1,031,426 | 996,932 | 801,474 | |||||||||
Total liabilities and stockholders' equity | $ | 7,695,252 | $ | 7,706,840 | $ | 7,003,879 |
BURLINGTON STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (All amounts in thousands) | ||||||||
Three Months Ended | ||||||||
May 4, | April 29, | |||||||
2024 | 2023 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 78,514 | $ | 32,748 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities | ||||||||
Depreciation and amortization | 81,965 | 70,529 | ||||||
Deferred income taxes | 11,520 | 14,699 | ||||||
Loss on extinguishment of debt | — | 24,644 | ||||||
Non-cash stock compensation expense | 19,107 | 16,722 | ||||||
Non-cash lease expense | (3,885 | ) | (970 | ) | ||||
Cash received from landlord allowances | 2,830 | 4,349 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (26,397 | ) | (7,418 | ) | ||||
Merchandise inventories | (52,958 | ) | (49,110 | ) | ||||
Accounts payable | (25,211 | ) | (125,241 | ) | ||||
Other current assets and liabilities | (41,061 | ) | (59,003 | ) | ||||
Long term assets and liabilities | (631 | ) | 723 | |||||
Other operating activities | 5,579 | (624 | ) | |||||
Net cash provided by (used in) operating activities | 49,372 | (77,952 | ) | |||||
INVESTING ACTIVITIES | ||||||||
Cash paid for property and equipment | (164,837 | ) | (95,688 | ) | ||||
Lease acquisition costs | (233 | ) | (4,549 | ) | ||||
Net (removal costs) proceeds from sale of property and equipment and assets held for sale | (462 | ) | 14,080 | |||||
Net cash used in investing activities | (165,532 | ) | (86,157 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Principal payments on long term debt—Term B-6 Loans | (2,404 | ) | (2,404 | ) | ||||
Principal payment on long term debt—2025 Convertible Notes | — | (133,656 | ) | |||||
Purchase of treasury shares | (75,622 | ) | (53,393 | ) | ||||
Other financing activities | 11,159 | 13,382 | ||||||
Net cash used in financing activities | (66,867 | ) | (176,071 | ) | ||||
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (183,027 | ) | (340,180 | ) | ||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 925,359 | 879,205 | ||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | $ | 742,332 | $ | 539,025 |
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Amounts in thousands, except per share data)
The following tables calculate the Company’s Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBIT, Adjusted SG&A and Adjusted Effective Tax Rate, all of which are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.
Adjusted Net Income is defined as net income, exclusive of the following items, if applicable: (i) net favorable lease costs; (ii) loss on extinguishment of debt; (iii) impairment charges; and (iv) other unusual, non-recurring or extraordinary expenses, losses, charges or gains, all of which are tax effected to arrive at Adjusted Net Income.
Adjusted EPS is defined as Adjusted Net Income divided by the diluted weighted average shares outstanding, as defined in the table below.
Adjusted EBITDA is defined as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) income tax expense; (v) depreciation and amortization; (vi) net favorable lease costs (vii) impairment charges; and (viii) other unusual, non-recurring or extraordinary expenses, losses, charges or gains.
Adjusted EBIT (or Adjusted Operating Margin) is defined as net income, exclusive of the following items, if applicable: (i) interest expense; (ii) interest income; (iii) loss on extinguishment of debt; (iv) income tax expense; (v) impairment charges; (vi) net favorable lease costs; and (vii) other unusual, non-recurring or extraordinary expenses, losses, charges or gains.
Adjusted SG&A is defined as SG&A less product sourcing costs, favorable lease costs and amounts related to certain litigation matters.
Adjusted Effective Tax Rate is defined as the GAAP effective tax rate less the tax effect of the reconciling items to arrive at Adjusted Net Income (footnote (e) in the table below).
The Company presents Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBIT, Adjusted SG&A and Adjusted Effective Tax Rate, because it believes they are useful supplemental measures in evaluating the performance of the Company’s business and provide greater transparency into the results of operations. In particular, the Company believes that excluding certain items that may vary substantially in frequency and magnitude from what the Company considers to be its core operating results are useful supplemental measures that assist in evaluating the Company’s ability to generate earnings and leverage sales, and to more readily compare core operating results between past and future periods.
The Company believes that these non-GAAP measures provide investors helpful information with respect to the Company’s operations and financial condition. Other companies in the retail industry may calculate these non-GAAP measures differently such that the Company’s calculation may not be directly comparable.
The following table shows the Company’s reconciliation of net income to Adjusted Net Income and Adjusted EPS for the periods indicated:
(in thousands, except per share data) | ||||||||
Three Months Ended | ||||||||
May 4, | April 29, | |||||||
2024 | 2023 | |||||||
Reconciliation of net income to Adjusted Net Income: | ||||||||
Net income | $ | 78,514 | $ | 32,748 | ||||
Net favorable lease costs (a) | 2,970 | 4,064 | ||||||
Loss on extinguishment of debt (b) | — | 24,644 | ||||||
Impairment charges - long-lived assets | 8,210 | 844 | ||||||
Tax effect (e) | (2,881 | ) | (7,302 | ) | ||||
Adjusted Net Income | $ | 86,813 | $ | 54,998 | ||||
Diluted weighted average shares outstanding (f) | 64,267 | 65,291 | ||||||
Adjusted Earnings per Share | $ | 1.35 | $ | 0.84 | ||||
The following table shows the Company’s reconciliation of net income to Adjusted EBIT and Adjusted EBITDA for the periods indicated:
(unaudited) | ||||||||||
(in thousands) | ||||||||||
Three Months Ended | ||||||||||
May 4, | April 29, | |||||||||
2024 | 2023 | |||||||||
Reconciliation of net income to Adjusted EBIT and Adjusted EBITDA: | ||||||||||
Net income | $ | 78,514 | $ | 32,748 | ||||||
Interest expense | 16,649 | 19,345 | ||||||||
Interest income | (8,072 | ) | (5,459 | ) | ||||||
Net favorable lease costs (a) | 2,970 | 4,064 | ||||||||
Loss on extinguishment of debt (b) | — | 24,644 | ||||||||
Impairment charges - long-lived assets | 8,210 | 844 | ||||||||
Income tax expense | 31,125 | 10,570 | ||||||||
Adjusted EBIT | 129,396 | 86,756 | ||||||||
Depreciation and amortization | 81,965 | 70,529 | ||||||||
Adjusted EBITDA | $ | 211,361 | $ | 157,285 | ||||||
The following table shows the Company’s reconciliation of SG&A to Adjusted SG&A for the periods indicated:
(unaudited) | ||||||||
(in thousands) | ||||||||
Three Months Ended | ||||||||
May 4, | April 29, | |||||||
2024 | 2023 | |||||||
Reconciliation of SG&A to Adjusted SG&A: | ||||||||
SG&A | $ | 825,226 | $ | 755,628 | ||||
Net favorable lease costs (a) | (2,970 | ) | (4,064 | ) | ||||
Product sourcing costs | (183,314 | ) | (186,926 | ) | ||||
Adjusted SG&A | $ | 638,942 | $ | 564,638 | ||||
The following table shows the reconciliation of the Company’s effective tax rates on a GAAP basis to the Adjusted Effective Tax Rates for the periods indicated:
(unaudited) | ||||||||
Three Months Ended | ||||||||
May 4, | April 29, | |||||||
2024 | 2023 | |||||||
Effective tax rate on a GAAP basis | 28.4 | % | 24.4 | % | ||||
Adjustments to arrive at Adjusted Effective Tax Rate (g) | (0.3 | ) | 0.1 | |||||
Adjusted Effective Tax Rate | 28.1 | % | 24.5 | % | ||||
The following table shows the Company’s reconciliation of net income to Adjusted Net Income for the prior period Adjusted EPS amounts used in this press release for the periods indicated:
(in thousands, except per share data) | ||||||||
Three Months Ended | Fiscal Year Ended | |||||||
July 29, 2023 | February 3, 2024 | |||||||
(53 Weeks) | ||||||||
Reconciliation of net income to Adjusted Net Income: | ||||||||
Net income | $ | 30,892 | $ | 339,649 | ||||
Net favorable lease costs (a) | 3,979 | 15,263 | ||||||
Loss on extinguishment of debt (b) | — | 38,274 | ||||||
Costs related to debt amendments (c) | 97 | 97 | ||||||
Impairment charges | 4,709 | 6,367 | ||||||
Litigation matters (d) | 1,500 | 1,500 | ||||||
Tax effect (e) | (2,305 | ) | (7,770 | ) | ||||
Adjusted Net Income | $ | 38,872 | $ | 393,380 | ||||
Diluted weighted average shares outstanding (f) | 65,039 | 64,917 | ||||||
Adjusted Earnings per Share | $ | 0.60 | $ | 6.06 | ||||
(a) Net favorable lease costs represent the non-cash expense associated with favorable and unfavorable leases that were recorded as a result of purchase accounting related to the April 13, 2006 Bain Capital acquisition of Burlington Coat Factory Warehouse Corporation. These expenses are recorded in the line item “Selling, general and administrative expenses” in our Condensed Consolidated Statements of Income.
(b) Fiscal 2023 amounts relate to the partial repurchases of the 2025 Convertible Notes.
(c) Amounts relate to the Term Loan Credit Agreement amendment in the second quarter of Fiscal 2023 changing from Adjusted LIBOR Rate to the Adjusted Term SOFR Rate.
(d) Represents amounts charged for certain litigation matters.
(e) Tax effect is calculated based on the effective tax rates (before discrete items) for the respective periods, adjusted for the tax effect for the impact of items (a) through (d).
(f) Diluted weighted average shares outstanding starts with basic shares outstanding and adds back any potentially dilutive securities outstanding during the period.
(g) Adjustments for items excluded from Adjusted Net Income. These items have been described in the table above reconciling GAAP net income to Adjusted Net Income.
![](https://ml.globenewswire.com/media/OWZkZjlhNTMtMDVkYi00ZWRjLWFkZmYtNjJiODk2YjQ3NDQxLTEwMjAxMTc=/tiny/Burlington-Coat-Factory-Wareho.png)
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