Burlington Stores Q2 net sales jump 9.7 percent, raises outlook

Burlington Stores reported net sales increase of 9.7 percent or 110.8 million dollars, to 1,255.1 million dollars. This increase includes a 5.4 percent increase in comparable store sales, as well as an increase of 51.8 million dollars from new and non-comparable stores.

Commenting on the company’s results, Tom Kingsbury, CEO said, “We are very pleased to report second quarter results that included a 9.7 percent increase in net sales, a 5.4 percent increase in comparable store sales and a 130 basis point expansion in Adjusted EBITDA margin. These results were driven by the continued improvement in the execution of our off-price operating model.”

Second quarter operating results

The company’s 5.4 percent comparable store sales increase is on top of a 5.6 percent increase in the second quarter of fiscal 2015. Gross margin improved 40 basis points to 39.6 percent. Net income increased 87.1 percent to 20.4 million dollars, or 0.28 dollar per diluted share. Adjusted net Income increased 90.1% to 28.2 million dollars, or 0.39 dollar per share against 0.19 dollar per share last year.

Adjusted EBITDA increased 31.4 percent, or 23.7 million dollars, to 99.1 million dollars. Sales growth, SG&A leverage and gross margin expansion led to a 130 basis point expansion in Adjusted EBITDA as a percentage of net sales.

First half operating results

Net sales increased 9 percent, or 210.4 million dollars, to 2,537.7 million dollars. This increase includes a 4.9 percent increase in comparable store sales, as well as an increase of 104.4 million dollars from new and non-comparable stores. The 4.9 percent comparable store sales increase is on top of a 3.1percent increase in the first half of fiscal 2015.

Gross margin expanded by 40 basis points to 39.9 percent from 39.5 percent. Net income increased 58.2 percent to 57.9 million dollars, or 0.80 dollar per diluted share. Adjusted net Income was 69.9 million dollars compared to 46.1 million dollars, or 0.97 dollar per diluted share against 0.60 dollar last year. Adjusted EBITDA increased 24.4 percent, or 43.2 million dollars, to 220.1 million dollars. The 110 basis point expansion in Adjusted EBITDA as a percent of net sales was driven by sales growth coupled with SG&A leverage and gross margin expansion.

Raises full year and third quarter outlook

The company is raising its full year outlook based on its strong first half performance and positive outlook for the remainder of the year. For the full year, the company expects net sales to increase in the range of 7.8 percent to 8.3percent; comparable store sales to increase between 3.6 percent to 4.1percent.

Adjusted net income per share in the range of 2.92 dollars to 2.96 dollars, which reflects an increase in incentive compensation expense of $0.02 per share driven by operating performance above the company’s expectations in the first half of the year, compared to the company’s prior guidance of 2.68 dollars to 2.78 dollars. Adjusted EBITDA margin expansion is expected to increase 50 to 60 basis points; and to open 25 net new stores.

For the third quarter, the company expects net sales to increase in the range of 7.1 percent to 8.1percent; comparable store sales to increase in the range of 2.5 percent to 3.5 percent; and adjusted net income per share in the range of 0.30 dollar to 0.32 dollar.

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