Burlington Stores (BURL) Q3 2025 earnings summary

Executive summary

• Q3 total sales grew 11% year-over-year to $2.53 billion, driven by new store openings and a 1% comparable store sales increase, with underlying comp growth of 4% after adjusting for weather impacts.

• Net income for Q3 rose to $91 million, with adjusted EPS up 41% to $1.55, reflecting higher sales and improved gross margin.

• Margin performance was strong, with 80 basis points of EBIT margin expansion and gross margin rate up 70 basis points to 43.9%, driven by higher merchandise margin and supply chain savings.

• Inventory was tightly managed, with comparable store inventories down 2% and reserve inventory rising to 32% of total inventory.

• Management remains optimistic for the holiday season but cautious due to macroeconomic and weather-related risks.

Financial highlights

• Q3 adjusted EBIT margin expanded by 80 basis points to 5.6%, and adjusted EBITDA rose to $229 million, up from $185 million year-over-year.

• Gross margin rate for Q3 was 43.9%, up 70 basis points year-over-year, driven by higher merchandise margin and lower freight expenses.

• Adjusted earnings per share for Q3 was $1.55, a 41% increase from the prior year.

• Operating cash flow for the first nine months was $320.2 million, up from $270.2 million in the prior year.

• $56 million in common stock was repurchased during the quarter, with $325 million remaining on the repurchase authorization.

Outlook and guidance

• FY24 adjusted EPS guidance raised to $7.76–$7.96, assuming a 2% comparable store sales increase and 9–10% total sales growth.

• Q4 comp store sales guidance is flat to up 2%, with total sales expected to increase 5%-7%; adjusted EBIT margin to decrease 50–80 basis points.

• Plans to open 101 net new stores and invest $750 million in capital expenditures for FY24.

• For 2025, high single-digit total sales growth is expected, driven by 100 net new stores and flat to 2% comp sales growth, with modest operating margin expansion.

• Management expects cash from operations, cash on hand, and credit facilities to cover capital needs for at least the next twelve months.