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Burlington Stores, Inc. BURL reported impressive fourth-quarter fiscal 2025 results, wherein both revenues and earnings grew year over year. Also, both top and bottom lines surpassed the Zacks Consensus Estimate. The company’s performance was supported by solid execution during the peak holiday season and continued progress in its merchandising and operational strategies.
During the quarter, the retailer focused on enhancing its product assortment through the elevation strategy, which emphasizes offering better-known brands, improved quality and more fashionable merchandise while maintaining strong value for customers. The company also benefited from effective execution across merchandising, supply chain and store operations, which helped support customer demand during the important holiday shopping period.
Additionally, management expressed optimism about the company’s outlook, highlighting opportunities to drive sales through improved assortments, continued progress in its Burlington 2.0 initiatives and a favorable merchandise sourcing environment. A positive outlook for sales growth and margin opportunities in 2026 further strengthened investor confidence. As a result, BURL’s shares rose 6.9% yesterday.
Burlington Stores, Inc. price-consensus-eps-surprise-chart | Burlington Stores, Inc. Quote
Burlington Stores reported adjusted earnings of $4.89 per share, which surpassed the Zacks Consensus Estimate of $4.70. The bottom line rose 20.1% from the year-ago quarter.
Total revenues of $3,647.4 million rose 11.3% from the prior-year quarter and beat the Zacks Consensus Estimate of $3,585 million. Net revenues increased nearly 11.3% to $3,642.5 million, while other revenues declined 2.5% to $4.9 million. The company’s comparable store sales increased 4% year over year. Our model anticipated a 2% rise in comparable store sales for the fiscal fourth quarter.
The gross margin was 43.7%, up 80 basis points from 42.9% in the fourth quarter of fiscal 2024. This also surpassed our estimate of gross margin of 43.1%. Merchandise margin increased 60 basis points, while freight expense improved 20 basis points.
Adjusted selling, general and administrative (SG&A) expenses rose 9.7% year over year to $818 million. Adjusted SG&A, excluding $8 million in costs related to bankruptcy-acquired leases in the fourth quarter of fiscal 2025, represented 22.2% of net sales compared with 22.6% in the fourth quarter of fiscal 2024, a 40-basis-point improvement. This is primarily benefiting from leverage in store payroll and occupancy costs on higher sales during the quarter. We estimated adjusted SG&A expenses, as a percentage of net sales, to be 23%.
Product sourcing costs were $232 million, up from $217 million in the year-ago quarter. As a percentage of net sales, this represents a 30-basis-point decline, supported by improved supply-chain productivity and ongoing cost-saving initiatives. Such costs comprise the processing goods costs via the supply chain and buying expenses.
Adjusted EBITDA increased 22.9% from the fourth quarter of fiscal 2024 to $562 million, excluding $8 million of expenses related to the bankruptcy-acquired leases. Adjusted EBITDA margin increased 150 basis points year over year. Adjusted EBIT was $442 million, up 21.4% from the year-ago quarter. Adjusted EBIT margin increased 100 basis points year over year.
The company ended the reported quarter with cash and cash equivalents of $1.23 billion, long-term debt of $2.01 billion and stockholders’ equity of $1.81 billion. BURL exited the fiscal fourth quarter with total liquidity of $2.16 billion, consisting of $1.23 billion in unrestricted cash and $926 million of availability under its ABL facility.
Total outstanding debt at quarter-end was $2.08 billion, including $1.72 billion under the Term Loan facility, $297 million in Convertible Notes and no borrowings on the ABL facility.
During the fourth quarter of fiscal 2025, the company repurchased 223,863 shares of its common stock for $59 million under the share repurchase program. At the end of the fiscal fourth quarter, $385 million remained authorized under the current repurchase program.
In the fiscal fourth quarter, the company opened two new stores and closed one, resulting in one net new store during the period. This brought the total store count to 1,212 at the end of the year.
For the first quarter of fiscal 2026, the company expects total sales to increase 9% to 11%, indicating comparable store sales growth of 2% to 4% compared with the first quarter of fiscal 2025.
The company expects the adjusted EBIT margin to decrease 60-100 basis points from the year-ago quarter, excluding approximately $6 million of anticipated expenses related to bankruptcy-acquired leases in the first quarter of fiscal 2026 and $6 million incurred in the prior period.
Adjusted EPS is currently expected to range from $1.60 to $1.75 compared with $1.67 reported in the first quarter of fiscal 2025. The outlook excludes $5 million, net of tax, of anticipated expenses related to bankruptcy-acquired leases in the first quarter of fiscal 2026 and $4 million incurred in the prior period.
For fiscal 2026 (the 52 weeks ending Jan. 30, 2027), the company expects total sales to increase 8% to 10%, following the 9% growth recorded in fiscal 2025.
This outlook assumes comparable store sales growth of 1% to 3%, following a 2% increase in fiscal 2025. Capital expenditures, net of landlord allowances, are projected to be approximately $875 million, and the company plans to open 110 net new stores, along with a new distribution center in Savannah, GA. Approximately 60% of these stores are expected to open in the first half, with the remaining locations scheduled for the fall season.
Adjusted EBIT margin is expected to increase 0-20 basis points year over year, excluding $8 million of anticipated expenses related to bankruptcy-acquired leases in fiscal 2026 compared with $35 million incurred in fiscal 2025.
Adjusted EPS is projected to be between $10.95 and $11.45, compared with $10.17 reported in fiscal 2025. The outlook excludes $6 million, net of tax, of anticipated expenses related to bankruptcy-acquired leases and assumes a share count of approximately 64 million shares.
BURL Stock Past Three-Month Performance
In the past three months, this Zacks Rank #4 (Sell) company has gained 22.2% compared with the industry’s 13.2% growth.
We have highlighted three better-ranked stocks, namely, Deckers Outdoor Corporation DECK, Zumiez Inc. ZUMZ and Ollie's Bargain Outlet Holdings, Inc. OLLI.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It flaunts 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 Deckers’ current fiscal-year earnings and sales indicates growth of 8.5% and 8.9%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.9%.
Zumiez is one of the leading global lifestyle retailers. It currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for Zumiez’s current fiscal-year earnings and sales implies growth of 955.6% and 4.4%, respectively, from the year-ago actuals. ZUMZ delivered a trailing four-quarter average earnings surprise of 28%.
Ollie's Bargain is a leading off-price retailer of brand-name household products, currently carries a Zacks Rank #2 (Buy). OLLI delivered a trailing four-quarter earnings surprise of 5.2%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and EPS indicates growth of 16.8% and 17.7%, respectively, from the year-ago reported numbers.
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This article originally published on Zacks Investment Research (zacks.com).
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