Burlington Stores raises full year outlook on strong Q3

For its third quarter to November 3, 2018, Burlington Stores, Inc. reported total sales increase of 13.7 percent to 1,634 million dollars. The company said, new and non-comparable stores contributed an incremental 128 million dollars in sales during the quarter, while comparable store sales increased 4.4 percent, on top of last year’s 3.1 percent comparable store sales increase. Net income increased 71 percent over the prior year period to 77 million dollars or 1.12 dollars per diluted share, while adjusted net income increased 70 percent to 83 million dollars or 1.21 dollars per diluted share.

Commenting on the third quarter trading, Tom Kingsbury, the company’s CEO, said in a statement: “We are very pleased with our third quarter results, driven by our 4.4 percent comparable sales increase, 13.7 percent overall sales growth, and an 80 basis point Adjusted EBIT margin improvement. These sales and margin results drove a 73 percent increase in Adjusted EPS in the third quarter, well ahead of our guidance.”

Highlights of third quarter operating results

Gross margin expanded by approximately 20 basis points over last year’s levels to 42.4 percent, on top of a 100 basis point increase in the prior year. The company added that a 40 basis point increase in merchandise margin more than offset a negative 20 basis point impact from higher freight costs.

Adjusted EBIT for the quarter increased 29 percent or 26 million dollars above the prior year period, to 115 million dollars. The 80 basis point expansion in Adjusted EBIT margin, the company said, was primarily driven by strong sales growth, disciplined expense management, and increased merchandise margins.

For the first nine months, total sales increased 12.1 percent, which included a comparable store sales increase on a shifted basis of 4 percent, on top of last year’s 2.4 percent comparable store sales increase. Adjusted EBIT increased by 26 percent or 71 million dollars above last year to 339 million dollars, representing an 80 basis point increase vs. the prior year period, while adjusted net income of 249 million dollars was up 59 percent and adjusted diluted EPS was 3.62 dollars against 2.22 dollars in the prior year period.

Burlington Stores expects FY18 sales to rise between 10.9 to 11.2 percent

For fiscal 2018, the company expects total sales to increase in the range of 10.9 percent to 11.2 percent, excluding the 53rd week impact in 2017; which assumes shifted comparable store sales to increase in the range of 2 percent to 3 percent for the fourth quarter of fiscal 2018, resulting in a full year shifted comparable store sales increase of 3.4 percent to 3.7 percent on top of the 3.4 percent increase during fiscal 2017.

Adjusted EBIT margin is expected to increase 40 to 50 basis points and adjusted EPS in the range of 6.33 dollars to 6.37 dollars, utilizing a fully diluted share count of approximately 68.7 million compared to the previous outlook for adjusted EPS of 6.13 dollars-6.20 dollars. Adjusted EPS, excluding the estimated impact of the Tax Cuts and Jobs Act, enacted in December 2017 is expected to be in the range of 5.01 dollars to 5.05 dollars compared with 4.14 dollars in fiscal 2017, a growth of 21 percent to 22 percent. The company plans to open 46 net new stores during the year.

For the fourth quarter, the company expects total sales to increase in the range of 8 percent to 9 percent; shifted comparable store sales to increase in the range of 2 percent to 3 percent on top of a 5.9 percent increase during the fourth quarter of fiscal 2017; adjusted EPS in the range of 2.71 dollars to 2.75 dollars, which assumes a fully diluted share count of approximately 68.5 million shares, as compared to 2.14 dollars last year.

Picture:Facebook/Burlington