Burlington Stores, Inc. Reports Second Quarter 2024 Earnings
Burlington Stores (NYSE: BURL) reported strong Q2 2024 results, with total sales up 13% and comparable store sales growing 5%. Net income reached $74 million, with diluted EPS of $1.15. Excluding expenses related to acquired BBBY leases, Adjusted EBIT margin increased 160 basis points, and Adjusted EPS rose 98% to $1.24. The company raised its FY24 Adjusted EPS guidance to $7.66-$7.96. Gross margin improved by 110 basis points to 42.8%, driven by lower markdowns and improved freight expenses. Burlington plans to open approximately 100 net new stores and expects total sales growth of 9-10% for FY24.
Burlington Stores (NYSE: BURL) ha riportato risultati forti per il secondo trimestre del 2024, con vendite totali in aumento del 13% e vendite nei negozi comparabili in crescita del 5%. Il reddito netto ha raggiunto 74 milioni di dollari, con un utile per azione diluito di $1.15. Escludendo le spese relative ai contratti di locazione BBBY acquisiti, il margine EBIT rettificato è aumentato di 160 punti base, e l'utile per azione rettificato è aumentato del 98% a $1.24. L'azienda ha alzato le previsioni di utile per azione rettificato per l'anno fiscale 2024 a $7.66-$7.96. Il margine lordo è migliorato di 110 punti base fino al 42.8%, grazie a minori riduzioni di prezzo e spese di trasporto migliorate. Burlington prevede di aprire circa 100 nuovi negozi netti e si aspetta una crescita delle vendite totali del 9-10% per l'anno fiscale 2024.
Burlington Stores (NYSE: BURL) reportó resultados sólidos para el segundo trimestre de 2024, con ventas totales aumentadas en un 13% y ventas en tiendas comparables creciendo un 5%. El ingreso neto alcanzó $74 millones, con un EPS diluido de $1.15. Excluyendo los gastos relacionados con los contratos de arrendamiento adquiridos de BBBY, el margen EBIT ajustado aumentó 160 puntos base, y el EPS ajustado creció un 98% a $1.24. La compañía elevó su pronóstico de EPS ajustado para el año fiscal 2024 a $7.66-$7.96. El margen bruto mejoró en 110 puntos base hasta el 42.8%, impulsado por menores descuentos y mejoras en los gastos de flete. Burlington planea abrir aproximadamente 100 nuevas tiendas netas y espera un crecimiento de las ventas totales del 9-10% para el año fiscal 2024.
벌링턴 스토어즈(Burlington Stores, NYSE: BURL)는 2024년 2분기에 총 매출이 13% 상승하고 비교 가능한 매장 매출이 5% 성장했다고 보고했습니다. 순이익은 7400만 달러에 도달했으며, 희석 주당 순이익(EPS)은 $1.15입니다. BBBY 임대와 관련된 비용을 제외하면, 조정된 EBIT 마진이 160 베이시스 포인트 증가했으며, 조정 EPS는 98% 증가하여 $1.24에 달했습니다. 회사는 FY24 조정 EPS 가이던스를 $7.66-$7.96으로 상향 조정했습니다. 총 매출 총이익률은 할인 폭 감소 및 운송 비용 개선으로 인해 110 베이시스 포인트 증가하여 42.8%를 기록했습니다. 벌링턴은 약 100개의 신규 매장을 열 계획이며 FY24 동안 총 매출 성장률이 9-10%에 이를 것으로 예상하고 있습니다.
Burlington Stores (NYSE: BURL) a rapporté de solides résultats pour le deuxième trimestre 2024, avec un chiffre d'affaires total en hausse de 13% et une croissance des ventes dans les magasins comparables de 5%. Le bénéfice net a atteint 74 millions de dollars, avec un BPA dilué de 1,15 $. En excluant les dépenses liées aux baux BBBY acquis, la marge EBIT ajustée a augmenté de 160 points de base, et le BPA ajusté a augmenté de 98% pour atteindre 1,24 $. L'entreprise a relevé ses prévisions de BPA ajusté pour l'exercice 2024 à 7,66 $ - 7,96 $. La marge brute s'est améliorée de 110 points de base pour atteindre 42,8%, grâce à des réductions de prix plus faibles et à des frais de transport améliorés. Burlington prévoit d'ouvrir environ 100 nouveaux magasins nets et s'attend à une croissance du chiffre d'affaires total de 9-10% pour l'exercice 2024.
Burlington Stores (NYSE: BURL) berichtete starke Ergebnisse für das zweite Quartal 2024, mit einem Anstieg des Gesamtumsatzes um 13% und einem Wachstum der vergleichbaren Filialumsätze von 5%. Der Nettogewinn erreichte 74 Millionen Dollar, mit einem verwässerten EPS von $1,15. Ohne die Kosten, die mit den erworbenen BBBY-Leasingverträgen verbunden sind, stieg die Adjusted EBIT-Marge um 160 Basispunkte, und Adjusted EPS erhöhte sich um 98% auf $1,24. Das Unternehmen erhöhte seine Prognose für das bereinigte EPS im Geschäftsjahr 2024 auf $7,66-$7,96. Die Bruttomarge verbesserte sich um 110 Basispunkte auf 42,8%, angetrieben durch niedrigere Preisreduzierungen und verbesserte Transportkosten. Burlington plant die Eröffnung von etwa 100 neuen Filialen netto und erwartet für das Geschäftsjahr 2024 ein Umsatzwachstum von 9-10%.
- Total sales increased 13% and comparable store sales grew 5% in Q2 2024
- Adjusted EBIT margin improved by 160 basis points
- Adjusted EPS increased 98% to $1.24
- Gross margin expanded by 110 basis points to 42.8%
- FY24 Adjusted EPS guidance raised to $7.66-$7.96
- Plans to open approximately 100 net new stores
- Incremental cost pressure from ocean freight noted
- Cautious planning for the second half of 2024 with comparable store sales guidance of 0% to 2% growth
Insights
Burlington Stores' Q2 2024 results showcase robust performance, with total sales growth of 13% and comparable store sales growth of 5%, surpassing expectations. The company's Adjusted EBIT margin increased by 160 basis points, while Adjusted EPS nearly doubled to $1.24, indicating significant operational efficiency.
Key drivers include gross margin expansion of 110 basis points, primarily due to lower markdowns and improved freight expenses. The company's supply chain efficiency initiatives are progressing faster than anticipated, contributing to the strong performance.
Burlington has raised its FY24 Adjusted EPS guidance to $7.66-$7.96, reflecting confidence in its business outlook. However, management remains cautious, maintaining a 0% to 2% comparable store sales growth guidance for H2 due to potential risks.
Investors should note the company's strong liquidity position of
Burlington's Q2 results demonstrate the resilience of the off-price retail model in the current economic environment. The 5% comparable store sales growth outperforms many traditional retailers, highlighting consumers' continued preference for value-oriented shopping.
The company's expansion plans, with 100 net new stores expected to open this fiscal year, indicate confidence in the long-term growth potential of the off-price sector. This aggressive expansion strategy could lead to increased market share gains.
Burlington's inventory management appears effective, with only a
While the outlook is positive, investors should monitor potential headwinds such as increased ocean freight costs and the broader economic environment that could impact consumer spending patterns.
Burlington's Q2 results highlight significant improvements in supply chain efficiency. The 60 basis point decrease in product sourcing costs as a percentage of net sales indicates successful optimization of processing and buying operations.
The company's ability to expand merchandise margins by 90 basis points, primarily through lower markdowns, suggests effective inventory management and allocation strategies. This improvement, coupled with a 20 basis point reduction in freight expenses, demonstrates a well-executed supply chain strategy.
The faster-than-expected progress in supply chain efficiency initiatives is a key driver of the strong margin and earnings growth. However, management's mention of incremental cost pressure from ocean freight in the outlook warrants attention, as it could potentially offset some of the gains achieved.
Investors should view these supply chain improvements positively, as they contribute directly to profitability and competitive advantage in the off-price retail sector.
- Total sales growth of
13% ; comparable store sales growth of5% - Net income was
$74 million , and diluted EPS was$1.15 - Excluding certain expenses associated with acquired BBBY leases:
- Adjusted EBIT margin increased 160 basis points
- Adjusted EPS increased
98% to$1.24 - Adjusted EPS guidance for FY24 raised to
$7.66 -$7.96
BURLINGTON, N.J., Aug. 29, 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 second quarter ended August 3, 2024.
Michael O’Sullivan, CEO, stated, “We are pleased with our results from the second quarter. Comparable store sales increased
Mr. O’Sullivan continued, “We saw very strong margin improvement and earnings growth during the second quarter. Our Adjusted EBIT Margin and Adjusted EPS increased 160 basis points and
Mr. O’Sullivan concluded, “We remain confident in the outlook for our business for the balance of fiscal 2024. Based on our year-to-date performance, we are increasing our margin and earnings guidance for the full year, despite some incremental cost pressure from ocean freight. That said, there are some risks, so we are planning our business cautiously, and maintaining our comparable store sales guidance of
Fiscal 2024 Second Quarter Operating Results (for the 13-week period ended August 3, 2024, compared with the 13-week period ended July 29, 2023)
- Total sales increased
13% compared to the second quarter of Fiscal 2023 to$2,461 million , while comparable store sales increased5% compared to the second quarter of Fiscal 2023. - Gross margin rate as a percentage of net sales was
42.8% vs.41.7% for the second quarter of Fiscal 2023, an increase of 110 basis points. Merchandise margin expanded by 90 basis points, primarily driven by lower markdowns, while freight expense improved 20 basis points. - Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were
$192 million vs.$183 million in the second quarter of Fiscal 2023, decreasing 60 basis points as a percentage of net sales. Product sourcing costs include the costs of processing goods through our supply chain and buying costs. - SG&A was
35.1% as a percentage of net sales vs.35.7% in the second quarter of Fiscal 2023, improving by 60 basis points. Adjusted SG&A was27.1% as a percentage of net sales vs.27.0% in the second quarter of Fiscal 2023, an increase of 10 basis points. - The effective tax rate was
26.0% vs.26.4% in the second quarter of Fiscal 2023. The Adjusted Effective Tax Rate was26.0% vs.25.6% in the second quarter of Fiscal 2023. - Net income was
$74 million , or$1.15 per share vs.$31 million , or$0.47 per share for the second quarter of Fiscal 2023. Adjusted Net Income, excluding, in both periods,$2 million of expenses, net of tax, associated with the acquisition of Bed Bath & Beyond leases, was$80 million , or$1.24 per share, vs.$41 million , or$0.63 per share for the second quarter of Fiscal 2023. - Diluted weighted average shares outstanding amounted to 64.3 million during the quarter compared with 65.0 million during the second quarter of Fiscal 2023.
- Adjusted EBITDA, excluding, in both periods,
$3 million of expenses associated with the acquisition of Bed Bath & Beyond leases, was$205 million vs.$143 million in the second quarter of Fiscal 2023, an increase of 170 basis points as a percentage of sales. Adjusted EBIT, excluding, in both periods,$3 million of expenses associated with the acquisition of Bed Bath & Beyond leases, was$118 million vs.$70 million in the second quarter of Fiscal 2023, an increase of 160 basis points as a percentage of sales.
First Six Months of Fiscal 2024 Results
- Total sales increased
12% compared to the first six months of Fiscal 2023. Net income increased139% compared to the same period in Fiscal 2023 to$152 million , or$2.37 per share vs.$0.98 per share in the prior period. Adjusted EBIT, excluding$9 million and$3 million , respectively, of expenses associated with the acquisition of Bed Bath & Beyond leases, was$254 million vs.$157 million in the first six months of Fiscal 2023, an increase of 160 basis points as a percentage of sales. Adjusted Net Income, excluding$7 million and$2 million , respectively, of expenses, net of tax, associated with the acquisition of Bed Bath & Beyond leases, was$171 million , or$2.66 per share, vs.$96 million , or$1.47 per share for the first six months of Fiscal 2023.
Inventory
- Merchandise inventories were
$1,223 million vs.$1,162 million at the end of the second quarter of Fiscal 2023, a5% increase, while comparable store inventories increased4% compared to the second quarter of Fiscal 2023. Reserve inventory was41% of total inventory at the end of the second quarter of Fiscal 2024 compared to45% at the end of the second 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 second quarter of Fiscal 2024 with
$1,476 million in liquidity, comprised of$660 million in unrestricted cash and$816 million in availability on its ABL facility. - The Company ended the second quarter with
$1,402 million in outstanding total debt, including$929 million on its Term Loan facility,$453 million in Convertible Notes, and no borrowings on its ABL facility.
Common Stock Repurchases
- During the second quarter of Fiscal 2024 the Company repurchased 269,508 shares of its common stock under its share repurchase program for
$61 million . As of the end of the second quarter of Fiscal 2024, the Company had$380 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
9% to10% on top of the10% increase for the 52-weeks ended January 27, 2024; this assumes comparable store sales will increase in the range of2% to3% , 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 50 to 70 basis points versus the 52 weeks ended January 27, 2024; this Adjusted EBIT margin increase excludes approximately
$9 million of 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
$40 million ; - Adjusted Effective Tax Rate to be approximately
26% ; and - Adjusted EPS in the range of
$7.66 t o$7.96 , which excludes$0.11 , 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.
For the third quarter of Fiscal 2024 (the 13 weeks ending November 2, 2024), the Company expects:
- Total sales to increase in the range of
10% to12% ; this assumes comparable store sales will increase in the range of0% to2% versus the third quarter of Fiscal 2023; - Adjusted EBIT margin to increase in the range of 60 to 80 basis points versus the third quarter of Fiscal 2023;
- Adjusted Effective Tax Rate to be approximately
25% ; and - Adjusted EPS in the range of
$1.45 t o$1.55 , as compared to$1.10 in Adjusted EPS last year; prior year period excludes$7 million , 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.
Second Quarter 2024 Conference Call
The Company will hold a conference call on August 29, 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: 8773565) 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 August 29, 2024 beginning at 11:30 a.m. ET through September 5, 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 8773565.
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 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 | Six Months Ended | ||||||||||||||
| August 3, | July 29, | August 3, | July 29, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| REVENUES: | |||||||||||||||
| Net sales | $ | 2,461,193 | $ | 2,170,445 | $ | 4,818,510 | $ | 4,303,239 | |||||||
| Other revenue | 4,324 | 4,362 | 8,560 | 8,524 | |||||||||||
| Total revenue | 2,465,517 | 2,174,807 | 4,827,070 | 4,311,763 | |||||||||||
| COSTS AND EXPENSES: | |||||||||||||||
| Cost of sales | 1,408,120 | 1,266,210 | 2,738,846 | 2,497,856 | |||||||||||
| Selling, general and administrative expenses | 863,981 | 775,285 | 1,689,207 | 1,530,913 | |||||||||||
| Costs related to debt amendments | — | 97 | — | 97 | |||||||||||
| Depreciation and amortization | 86,659 | 73,133 | 168,624 | 143,662 | |||||||||||
| Impairment charges - long-lived assets | — | 4,709 | 8,210 | 5,552 | |||||||||||
| Other income - net | (9,492 | ) | (6,165 | ) | (20,354 | ) | (15,163 | ) | |||||||
| Loss on extinguishment of debt | — | — | — | 24,644 | |||||||||||
| Interest expense | 16,582 | 19,545 | 33,231 | 38,890 | |||||||||||
| Total costs and expenses | 2,365,850 | 2,132,814 | 4,617,764 | 4,226,451 | |||||||||||
| Income before income tax expense | 99,667 | 41,993 | 209,306 | 85,312 | |||||||||||
| Income tax expense | 25,907 | 11,101 | 57,032 | 21,672 | |||||||||||
| Net income | $ | 73,760 | $ | 30,892 | $ | 152,274 | $ | 63,640 | |||||||
| Diluted net income per common share | $ | 1.15 | $ | 0.47 | $ | 2.37 | $ | 0.98 | |||||||
| Weighted average common shares - diluted | 64,328 | 65,039 | 64,284 | 65,141 | |||||||||||
| BURLINGTON STORES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (All amounts in thousands) | |||||||||||
| August 3, | February 3, | July 29, | |||||||||
| 2024 | 2024 | 2023 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 659,910 | $ | 925,359 | $ | 520,974 | |||||
| Accounts receivable—net | 99,659 | 74,361 | 80,742 | ||||||||
| Merchandise inventories | 1,222,714 | 1,087,841 | 1,161,523 | ||||||||
| Assets held for disposal | 27,963 | 23,299 | 5,120 | ||||||||
| Prepaid and other current assets | 247,678 | 216,164 | 148,711 | ||||||||
| Total current assets | 2,257,924 | 2,327,024 | 1,917,070 | ||||||||
| Property and equipment—net | 2,063,818 | 1,880,325 | 1,699,469 | ||||||||
| Operating lease assets | 3,144,169 | 3,132,768 | 2,925,595 | ||||||||
| Goodwill and intangible assets—net | 285,064 | 285,064 | 285,064 | ||||||||
| Deferred tax assets | 2,190 | 2,436 | 2,925 | ||||||||
| Other assets | 68,271 | 79,223 | 85,415 | ||||||||
| Total assets | $ | 7,821,436 | $ | 7,706,840 | $ | 6,915,538 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 1,017,449 | $ | 956,350 | $ | 773,494 | |||||
| Current operating lease liabilities | 388,849 | 411,395 | 400,266 | ||||||||
| Other current liabilities | 604,465 | 647,338 | 456,075 | ||||||||
| Current maturities of long term debt | 167,892 | 13,703 | 13,867 | ||||||||
| Total current liabilities | 2,178,655 | 2,028,786 | 1,643,702 | ||||||||
| Long term debt | 1,234,521 | 1,394,942 | 1,347,727 | ||||||||
| Long term operating lease liabilities | 3,020,557 | 2,984,794 | 2,801,058 | ||||||||
| Other liabilities | 74,092 | 73,793 | 70,771 | ||||||||
| Deferred tax liabilities | 243,274 | 227,593 | 226,421 | ||||||||
| Stockholders' equity | 1,070,337 | 996,932 | 825,859 | ||||||||
| Total liabilities and stockholders' equity | $ | 7,821,436 | $ | 7,706,840 | $ | 6,915,538 | |||||
| BURLINGTON STORES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (All amounts in thousands) | |||||||
| Six Months Ended | |||||||
| August 3, | July 29, | ||||||
| 2024 | 2023 | ||||||
| OPERATING ACTIVITIES | |||||||
| Net income | $ | 152,274 | $ | 63,640 | |||
| Adjustments to reconcile net income to net cash provided by operating activities | |||||||
| Depreciation and amortization | 168,624 | 143,662 | |||||
| Deferred income taxes | 18,831 | 18,001 | |||||
| Loss on extinguishment of debt | — | 24,644 | |||||
| Non-cash stock compensation expense | 43,885 | 36,147 | |||||
| Non-cash lease expense | (3,084 | ) | (2,993 | ) | |||
| Cash received from landlord allowances | 4,491 | 4,540 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (26,304 | ) | (9,774 | ) | |||
| Merchandise inventories | (134,872 | ) | 20,460 | ||||
| Accounts payable | 76,011 | (183,775 | ) | ||||
| Other current assets and liabilities | (93,564 | ) | (89,853 | ) | |||
| Long term assets and liabilities | 323 | 1,368 | |||||
| Other operating activities | 3,191 | 3,759 | |||||
| Net cash provided by operating activities | 209,806 | 29,826 | |||||
| INVESTING ACTIVITIES | |||||||
| Cash paid for property and equipment | (360,438 | ) | (184,752 | ) | |||
| Lease acquisition costs | (575 | ) | (6,737 | ) | |||
| Net (removal costs) proceeds from sale of property and equipment and assets held for sale | (1,259 | ) | 13,831 | ||||
| Net cash used in investing activities | (362,272 | ) | (177,658 | ) | |||
| FINANCING ACTIVITIES | |||||||
| Principal payments on long term debt—Term B-6 Loans | (4,807 | ) | (4,807 | ) | |||
| Principal payment on long term debt—2025 Convertible Notes | — | (133,724 | ) | ||||
| Purchase of treasury shares | (137,739 | ) | (88,056 | ) | |||
| Other financing activities | 29,563 | 16,188 | |||||
| Net cash used in financing activities | (112,983 | ) | (210,399 | ) | |||
| Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (265,449 | ) | (358,231 | ) | |||
| 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 | $ | 659,910 | $ | 520,974 | |||
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) costs related to debt amendments; (iv) impairment charges; (v) amounts related to certain litigation matters; and (vi) 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) costs related to debt amendments; (v) income tax expense; (vi) depreciation and amortization; (vii) net favorable lease costs; (viii) impairment charges; (ix) amounts related to certain litigation matters; and (x) 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) costs related to debt amendments; (v) income tax expense; (vi) impairment charges; (vii) net favorable lease costs; (viii) amounts related to certain litigation matters; and (ix) 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 tables 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:
| (inthousands, except per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| August 3, | July 29, | August 3, | July 29, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Reconciliation of net income to Adjusted Net Income: | |||||||||||||||
| Net income | $ | 73,760 | $ | 30,892 | $ | 152,274 | $ | 63,640 | |||||||
| Net favorable lease costs (a) | 3,138 | 3,979 | 6,108 | 8,042 | |||||||||||
| Loss on extinguishment of debt (b) | — | — | — | 24,644 | |||||||||||
| Costs related to debt amendments (c) | — | 97 | — | 97 | |||||||||||
| Impairment charges - long-lived assets | — | 4,709 | 8,210 | 5,552 | |||||||||||
| Litigation matters (d) | 1,925 | 1,500 | 1,925 | 1,500 | |||||||||||
| Tax effect (e) | (1,336 | ) | (2,305 | ) | (4,217 | ) | (9,605 | ) | |||||||
| Adjusted Net Income | $ | 77,487 | $ | 38,872 | $ | 164,300 | $ | 93,870 | |||||||
| Diluted weighted average shares outstanding (f) | 64,328 | 65,039 | 64,284 | 65,141 | |||||||||||
| Adjusted Earnings per Share | $ | 1.20 | $ | 0.60 | $ | 2.56 | $ | 1.44 | |||||||
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 | Six Months Ended | ||||||||||||||
| August 3, | July 29, | August 3, | July 29, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Reconciliation of net income to Adjusted EBIT and Adjusted EBITDA: | |||||||||||||||
| Net income | $ | 73,760 | $ | 30,892 | $ | 152,274 | $ | 63,640 | |||||||
| Interest expense | 16,582 | 19,545 | 33,231 | 38,890 | |||||||||||
| Interest income | (6,128 | ) | (4,115 | ) | (14,200 | ) | (9,573 | ) | |||||||
| Net favorable lease costs (a) | 3,138 | 3,979 | 6,108 | 8,042 | |||||||||||
| Loss on extinguishment of debt (b) | — | — | — | 24,644 | |||||||||||
| Costs related to debt amendments (c) | — | 97 | — | 97 | |||||||||||
| Impairment charges - long-lived assets | — | 4,709 | 8,210 | 5,552 | |||||||||||
| Litigation matters (d) | 1,925 | 1,500 | 1,925 | 1,500 | |||||||||||
| Income tax expense | 25,907 | 11,101 | 57,032 | 21,672 | |||||||||||
| Adjusted EBIT | 115,184 | 67,708 | 244,580 | 154,464 | |||||||||||
| Depreciation and amortization | 86,659 | 73,133 | 168,624 | 143,662 | |||||||||||
| Adjusted EBITDA | $ | 201,843 | $ | 140,841 | $ | 413,204 | $ | 298,126 | |||||||
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 | Six Months Ended | ||||||||||||||
| August 3, | July 29, | August 3, | July 29, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Reconciliation of SG&A to Adjusted SG&A: | |||||||||||||||
| SG&A | $ | 863,981 | $ | 775,285 | $ | 1,689,207 | $ | 1,530,913 | |||||||
| Net favorable lease costs (a) | (3,138 | ) | (3,979 | ) | (6,108 | ) | (8,042 | ) | |||||||
| Product sourcing costs | (191,779 | ) | (182,867 | ) | (375,015 | ) | (369,793 | ) | |||||||
| Litigation matters (d) | (1,925 | ) | (1,500 | ) | (1,925 | ) | (1,500 | ) | |||||||
| Adjusted SG&A | $ | 667,139 | $ | 586,939 | $ | 1,306,159 | $ | 1,151,578 | |||||||
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 | Six Months Ended | ||||||||||||||
| August 3, | July 29, | August 3, | July 29, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Effective tax rate on a GAAP basis | 26.0 | % | 26.4 | % | 27.2 | % | 25.4 | % | |||||||
| Adjustments to arrive at Adjusted Effective Tax Rate (g) | — | (0.8 | ) | — | (0.4 | ) | |||||||||
| Adjusted Effective Tax Rate | 26.0 | % | 25.6 | % | 27.2 | % | 25.0 | % | |||||||
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 | ||||||
| October 28, 2023 | February 3, 2024 | ||||||
| (53 Weeks) | |||||||
| Reconciliation of net income to Adjusted Net Income: | |||||||
| Net income | $ | 48,551 | $ | 339,649 | |||
| Net favorable lease costs (a) | 3,788 | 15,263 | |||||
| Loss on extinguishment of debt (b) | 13,630 | 38,274 | |||||
| Costs related to debt amendments (c) | — | 97 | |||||
| Impairment charges | 814 | 6,367 | |||||
| Litigation matters (d) | — | 1,500 | |||||
| Tax effect (e) | (2,955 | ) | (7,770 | ) | |||
| Adjusted Net Income | $ | 63,828 | $ | 393,380 | |||
| Diluted weighted average shares outstanding (f) | 64,802 | 64,917 | |||||
| Adjusted Earnings per Share | $ | 0.98 | $ | 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.
FAQ
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