Why Off-Price Retailer Burlington Stores Shares Are Higher Today

Burlington Stores BURL shares are trading higher after the company reported better-than-expected fourth-quarter financial results and issued FY24 guidance.

Revenue growth of 14% Y/Y to $3.126 billion, beating the consensus of $3.07 billion. Comparable store sales increased by 2%, ahead of management guidance of -2% to 0%.

On a 13-week basis, Adjusted EPS rose 25% Y/Y to $3.69, above guidance of $3.10-$3.25, and surpassed the consensus of $3.30.

Gross margin was 42.6% vs. 40.7% for the fourth quarter, an increase of 190 basis points. At the end of FY23, merchandise inventories were $1.088 billion vs. $1.182 billion last year.

Adjusted EBITDA (excluding expenses related to the buyout of Bed Bath & Beyond leases) stood at $412 million vs. $342 million last year, with the margin expanding 130 basis points Y/Y.

The company ended the year with $925 million in unrestricted cash and $709 million in availability on its ABL facility. 

Outlook: Burlington expects adjusted EPS of $7.00-$7.60 (vs. consensus of $7.08) and sales growth of 9% to 11%, with comparable store sales to increase approximately 0% to 2% for FY24.

For the first quarter, the company expects comparable store sales to increase 0% to 2% and adjusted EPS of $0.95 to $1.10 (vs. street view of $1.09).

Michael O’Sullivan, CEO, said, “Looking ahead to 2024, we remain confident in the comparable store sales and margin assumptions we shared in November. There is a lot of uncertainty in the external environment, so we are planning our business flexibly, and we are ready to chase if the sales trend is stronger.”

Also Read: Burlington Stores Has Potential For Significant Margin Expansion – Piper Analyst Upgrades Stock

Price Action: BURL shares are up 6.40% at $219.04 on the last check Thursday.

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