Burlington (NYSE:BURL) Posts Better-Than-Expected Sales In Q2

Off-price retail company Burlington Stores (NYSE:BURL) reported Q2 CY2024 results exceeding Wall Street analysts’ expectations, with revenue up 13.4% year on year to $2.47 billion. It made a non-GAAP profit of $1.20 per share, improving from its profit of $0.60 per share in the same quarter last year.

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Michael O’Sullivan, CEO, stated, “We are pleased with our results from the second quarter. Comparable store sales increased 5%, while total sales increased 13%. Both of these metrics were well ahead of our expectations.”

Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.

Discount Retailer

Discount retailers understand that many shoppers love a good deal, and they focus on providing excellent value to shoppers by selling general merchandise at major discounts. They can do this because of unique purchasing, procurement, and pricing strategies that involve scouring the market for trendy goods or buying excess inventory from manufacturers and other retailers. They then turn around and sell these snacks, paper towels, toys, clothes, and myriad other products at highly enticing prices. Despite the unique draw and lure of discounts, these discount retailers must also contend with the secular headwinds of online shopping and challenged retail foot traffic in places like suburban strip malls.

Sales Growth

Burlington is larger than most consumer retail companies and benefits from economies of scale, giving it an edge over its competitors.

As you can see below, the company’s annualized revenue growth rate of 8.1% over the last five years was mediocre as it opened new stores and grew sales at existing, established stores.

This quarter, Burlington reported robust year-on-year revenue growth of 13.4%, and its $2.47 billion in revenue exceeded Wall Street’s estimates by 2%. Looking ahead, Wall Street expects sales to grow 8.4% over the next 12 months, a deceleration from this quarter.

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Same-Store Sales

Burlington’s demand within its existing stores has barely increased over the last eight quarters. On average, the company’s same-store sales growth has been flat.

In the latest quarter, Burlington’s same-store sales rose 5% year on year. This growth was an acceleration from the 4% year-on-year increase it posted 12 months ago, which is always an encouraging sign.

Key Takeaways from Burlington’s Q2 Results

We were impressed by Burlington’s optimistic earnings forecast for next quarter, which blew past analysts’ expectations. We were also excited its revenue and EPS outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 2.6% to $280 immediately after reporting.

Burlington may have had a good quarter, but does that mean you should invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.