While announcing substantial growth intentions, Burlington Stores posted third-quarter earnings and revenues just shy of a Wall Street estimate but with strong comparable sales growth.
A Zacks Investment Research-published analyst consensus estimate called for earnings per adjusted diluted sales of 99 cents and revenues of $2.31 billion.
Comparable sales advanced 6% in the quarter year over year, Burlington stated. Net sales were $2.28 billion and net revenue was $2.29 billion versus $2.04 billion and $2.04 billion respectively, in the year-prior period. Other revenue in the year-before period was $4.8 billion, which is the amount of revenue that exceeded sales, although this was hidden in the rounding process.
In looking forward, Burlington noted that corporate plans call for opening about 80 net new stores by the end of the current fiscal year. Earlier this year, Burlington acquired 62 leases from bankrupt Bed Bath & Beyond.
Michael O’Sullivan, Burlington CEO, said in a conference call that the third quarter benefited from a strong back-to-school selling season but was pressured by warm temperatures in much of the United States during October, which cut into Burlington’s traditionally and proportionally large outerwear business.
In looking ahead, O’Sullivan said that Burlington’s plans include increasing total sales to about $16 billion over the next five years with an average annual growth rate in the low double digits. New stores, comp sales and improved operating margins would contribute to ongoing growth. Over the next five years, O’Sullivan said, Burlington expects to open 500 net new stores on its base of more than 1,000.
“These will be comprised mostly of our 25,000 square foot prototype located in busy strip malls,” he said.
The company also anticipates relocating and downsizing older and larger stores. O’Sullivan said Burlington would relocate or downsize two to three dozen stores each year.
In announcing the financial results, O’Sullivan said, “We were pleased with our performance during the third quarter. We had a strong trend in August and September, and this drove 6% comparable store sales growth for the full quarter despite the negative impact of unseasonably warm weather in October. This trend, together with strong merchandise margins, delivered earnings at the high end of expectations.”
O’Sullivan added that November has begun well “helped by cooler weather at the beginning of the month. We feel very good about how we are set up for holiday. That said, the critical high-volume weeks are still ahead of us, and we recognize that there is a lot of uncertainty in the external environment, so we are maintaining our previously issued Q4 guidance.”
