Burlington Stores (BURL) Q1 Earnings & Revenues Beat Estimates
Burlington Stores, Inc. BURL has reported impressive first-quarter fiscal 2024 results, wherein sales and earnings beat the Zacks Consensus Estimate. Also, both top and bottom lines grew year over year.
Insight Into the Headlines
Burlington Stores has reported adjusted earnings of $1.42 per share, surpassing the Zacks Consensus Estimate of earnings of $1.04. The bottom line rose 69% from 84 cents in the year-ago quarter.
Total revenues of $2,361.6 million beat the Zacks Consensus Estimate of $2,343 million and increased 10.5% from the prior-year quarter. The company’s comparable store sales jumped 2% from the year-ago period.
Burlington Stores, Inc. Price, Consensus and EPS Surprise
Burlington Stores, Inc. price-consensus-eps-surprise-chart | Burlington Stores, Inc. Quote
Margins
The gross margin was 43.5% in the reported quarter, up 120 basis points (bps) from first-quarter fiscal 2023. Notably, we expected the gross margin to increase 90 bps year over year in the quarter under review. The merchandise margin expanded 90 bps due to lower markdowns. Freight expenses improved 30 bps year over year.
Adjusted selling, general and administrative (SG&A) expenses rose 13.2% year over year to $638.9 million in the fiscal first quarter. Adjusted SG&A expenses, as a rate of sales, was 27.1%, increasing 50 bps from first-quarter fiscal 2023. We estimated adjusted SG&A expenses to grow 10.3% year over year in the first quarter.
Product sourcing costs came in at $183 million, up from $187 million in the year-ago quarter.
Adjusted EBITDA increased 34.4% from the first quarter of fiscal 2023 to $211.4 million. The adjusted EBITDA margin increased 160 bps to 9% in the quarter under review. Adjusted EBIT was $129.4 million, up 49.1% from $86.8 million in the year-ago quarter. The adjusted EBIT margin was 5.5%, increasing 140 bps from the year-ago quarter.
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Other Financial Aspects
The company ended the reported quarter with cash and cash equivalents of $742.3 million, long-term debt of $1,236.7 million, and stockholders’ equity of $1,031.4 million. BURL exited the fiscal first quarter with $1,521 million of liquidity, including $742 million of unrestricted cash and $779 million available under its ABL facility.
Burlington Stores ended the quarter with $1,405 million of outstanding total debt, comprising $931 million under its term-loan facility, $453 million of convertible notes and no borrowings under its ABL facility.
The company bought back 312,238 shares for $63 million under its share repurchase plan in the fiscal first quarter. As of May 4, 2024, BURL had $442 million remaining under its current share repurchase authorization.
Outlook
For the second quarter of fiscal 2024, the company anticipates total sales to increase 9-11%, assuming comparable store sales will increase 0-2% from that reported in the second quarter of fiscal 2023. The adjusted EBIT margin is expected to grow 30-50 basis points from that reported in the second quarter of fiscal 2023.
The adjusted effective tax rate is anticipated to be 26%. The adjusted EPS is projected to be 83-93 cents, whereas it reported 63 cents last year; both periods exclude 3 cents, net of tax, of expenses related to the acquired Bed Bath & Beyond leases.
For fiscal 2024, the company expects total sales to increase 8-10%, on top of the 10% increase for the 52 weeks ended Jan 27, 2024. Comparable sales are anticipated to grow 0-2%, whereas it reported a 4% increase in fiscal 2023.
The adjusted EBIT margin (excluding the impacts of expected incremental expenses of 9 million related to the recently acquired Bed Bath & Beyond leases) is expected to increase 40-60 bps for the fiscal year. The adjusted EPS is forecast to be $7.35-$7.75, excluding 10 cents, net of tax, of expenses associated with the acquired Bed Bath & Beyond leases.
In fiscal 2024, management intends to open 100 stores and projects a capital expenditure, net of landlord allowances, of $750 million. Net interest expenses are expected to be $43 million, whereas the adjusted effective tax rate is likely to be 26.5%.
Over the past three months, this Zacks Rank #4 (Sell) stock has lost 2.6% compared with the industry's growth of 1.9%.
Stocks to Consider
Some better-ranked stocks are Canada Goose GOOS, Bath & Body Works BBWI and Casey's General Stores, Inc. CASY.
Canada Goose is a global outerwear brand. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Canada Goose’s current fiscal-year earnings indicates growth of 13.7% from the year-ago period’s reported figures. GOOS has a trailing four-quarter average earnings surprise of 70.9%.
Bath & Body Works is a specialty retailer. It has a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Bath & Body Works’ current fiscal-year sales and earnings indicates a decline of 0.4% and growth of 1.8%, respectively, from the year-ago reported figures. BBWI has a trailing four-quarter average earnings surprise of 23.2%.
Casey's offers a comprehensive range of products and services to meet the needs of its customers. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Casey's current financial-year earnings indicates growth of 10.4% from the year-earlier reported levels. CASY has a trailing four-quarter average earnings surprise of 12%.
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Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report
Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
Bath & Body Works, Inc. (BBWI) : Free Stock Analysis Report
