Burlington Stores, Inc. (BURL): Results of Operations and Financial Condition
Burlington Stores, Inc. (BURL) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 BURLINGTON STORES REPORTS STRONG SECOND QUARTER SALES AND EARNINGS GROWTH. THIS REPRESENTS THE 15TH CONSECUTIVE QUARTER OF DOUBLE DIGIT EPS GROWTH. o Total sales increased 11%, on top of 10% last year o Comparable store sales increased 2%, on top of 5% last year o Ne
How this was made
The 30-second read
Why it matters
The earnings beat and guidance raise provide a fresh catalyst for traders, likely supporting a short‑term rally.
Market read
BURL's strong performance may lift the broader off‑price retail segment and attract momentum traders.
What to watch
Rising inventory levels and exposure to tariff refund reinvestment could pressure margins later.
BURLINGTON STORES REPORTS STRONG SECOND QUARTER SALES AND EARNINGS GROWTH. THIS REPRESENTS THE 15TH CONSECUTIVE QUARTER OF DOUBLE DIGIT EPS GROWTH.
Total sales increased 11%, comparable store sales increased 2%, gross margin rate increased 250 basis points, and adjusted EPS excluding tariff refunds and certain bankruptcy acquired lease expenses increased 38% to $2.37. The Company also raised full-year Adjusted EPS guidance to $11.77 to $11.97.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total salesGAAP | $2,998 million | – | increased 11% |
| Net sales (in thousands)GAAP | $2,997,778 | – | – |
| Other revenue (in thousands)GAAP | 4,485 | – | – |
| Total revenue (in thousands)GAAP | 3,002,263 | – | – |
| Comparable store salesother | 2% | – | increased 2% |
| Gross margin rate as a percentage of net salesGAAP | 46.2% | – | an increase of 250 basis points |
| Product sourcing costsGAAP | $226 million | – | – |
| Selling, general and administrative expenses (in thousands)GAAP | 1,019,173 | – | – |
| SG&A as a percentage of net salesGAAP | 34.0% | – | – |
| Adjusted SG&A as a percentage of net salesnon-GAAP | 26.2% | – | – |
| Adjusted SG&A (in thousands)non-GAAP | 791,240 | – | – |
| Effective tax rateGAAP | 23.9% | – | – |
| Adjusted Effective Tax Ratenon-GAAP | 23.6% | – | – |
| Net incomeGAAP | $184 million | – | – |
| Net income (in thousands)GAAP | 184,304 | – | – |
| Diluted net income per common shareGAAP | $2.88 | – | – |
| Adjusted Net Income excluding tariff refunds and certain expenses associated with bankruptcy acquired leasesnon-GAAP | $151 million | – | – |
| Adjusted EPS excluding tariff refunds and certain expenses associated with bankruptcy acquired leasesnon-GAAP | $2.37 | – | increased 38% |
| Adjusted Net Income (in thousands)non-GAAP | 189,273 | – | – |
| Adjusted Earnings per Sharenon-GAAP | $2.96 | – | – |
| Diluted weighted average shares outstandingGAAP | 63.9 million | – | – |
| Adjusted EBITDAnon-GAAP | $324 million | – | an increase of 130 basis points as a percentage of sales |
| Adjusted EBITDA (in thousands)non-GAAP | 375,282 | – | – |
| Adjusted EBIT excluding tariff refunds and certain expenses associated with bankruptcy acquired leasesnon-GAAP | $210 million | – | an increase of 100 basis points as a percentage of sales |
| Adjusted EBIT (in thousands)non-GAAP | 261,260 | – | – |
| Merchandise inventoriesGAAP | $1,541 million | – | a 9% increase |
| Comparable store inventory increaseother | 11% | – | compared to the second quarter of Fiscal 2025 |
| Reserve inventory as a percentage of total inventoryother | 43% | – | – |
| Net cash provided by operating activities for the six months ended August 1, 2026 (in thousands)GAAP | 334,624 | – | – |
| Cash paid for property and equipment for the six months ended August 1, 2026 (in thousands)GAAP | (532,384) | – | – |
Fiscal Year 2026 (the 52-weeks ending January 30, 2027) and third quarter of Fiscal 2026 (the 13-weeks ending October 31, 2026) outlook
- RevenueFiscal Year 2026: Total sales to increase in the range of 10% to 11%; comparable store sales will increase in the range of 3% to 4%. Third quarter of Fiscal 2026: Total sales to increase in the range of 9% to 11%; comparable store sales will increase in the range of 1% to 3% versus the third quarter of Fiscal 2025.
- Tax rateFiscal Year 2026: An Adjusted Effective Tax Rate of approximately 25%. Third quarter of Fiscal 2026: An Adjusted Effective Tax Rate of approximately 26%.
- NoteFiscal Year 2026: Capital expenditures, net of landlord allowances, to be approximately $875 million.
- NoteFiscal Year 2026: To open approximately 115 net new stores.
- NoteFiscal Year 2026: Depreciation and amortization to be approximately $460 million.
- NoteFiscal Year 2026: Adjusted EBIT margin to increase in the range of 20 to 40 basis points versus Fiscal 2025, excluding $16 million of anticipated expenses associated with bankruptcy acquired leases in Fiscal 2026 and $35 million in Fiscal 2025.
- NoteFiscal Year 2026: Net interest expense to be approximately $55 million.
- NoteFiscal Year 2026: Adjusted EPS in the range of $11.77 to $11.97, as compared to $10.17 of Adjusted EPS last year, excluding $12 million, net of tax, of anticipated expenses associated with bankruptcy acquired leases in Fiscal 2026 and $26 million in Fiscal 2025. This assumes a fully diluted share count of approximately 64 million shares.
- NoteThird quarter of Fiscal 2026: Adjusted EBIT margin to decrease 80 to 60 basis points versus the third quarter of Fiscal 2025, excluding approximately $2 million of anticipated expenses associated with bankruptcy acquired leases in the third quarter of Fiscal 2026 and $11 million in the third quarter of Fiscal 2025.
- NoteThird quarter of Fiscal 2026: Adjusted EPS in the range of $1.60 to $1.70, as compared to $1.80 in Adjusted EPS last year, excluding $2 million, net of tax, of anticipated expenses associated with bankruptcy acquired leases in the third quarter of Fiscal 2026 and $8 million in the third quarter of Fiscal 2025.
- NoteGuidance includes the benefit of $55 million in tariff refunds, recognized in the second quarter of fiscal 2026, and reinvestment of approximately 40% of such refunds in the third quarter and approximately 60% in the fourth quarter of fiscal 2026.
- NoteExcluding the $55 million planned tariff refund reinvestment, underlying Fall guidance assumptions are unchanged versus prior guidance: estimated EBIT margin improvement of 10 to 30 basis points and EPS growth of 7% to 10%.
Capital returns
- During the second quarter of Fiscal 2026, the Company repurchased 270,279 shares of its common stock under its share repurchase program for $87 million.
- As of the end of the second quarter of Fiscal 2026, the Company had $218 million remaining on its current share repurchase program authorization.
- Purchase of treasury shares for the six months ended August 1, 2026 was $(222,295) (in thousands), compared with $(154,883) (in thousands) for the six months ended August 2, 2025.
What drove it
- Total sales increased 11% on top of a 10% increase last year, while comparable store sales increased 2% on top of 5% last year.
- Gross margin rate increased 250 basis points. Excluding the benefit of $55 million in tariff refunds, merchandise margin expanded 70 basis points, while freight expense increased 10 basis points as a percentage of net sales.
- The Company received $55 million in tariff refunds during the second quarter and intends to fully invest the refunds back into the business in the back-half of the year to deliver sharper values.
- The inventory increase was driven by 149 net new stores and a comparable store inventory increase of 11% compared to the second quarter of Fiscal 2025.
- The Company operated 1,287 stores as of the end of the second quarter of Fiscal 2026.
Concerns
- Third-quarter Adjusted EBIT margin is expected to decrease 80 to 60 basis points versus the third quarter of Fiscal 2025.
- Third-quarter Adjusted EPS is expected to be in the range of $1.60 to $1.70, as compared to $1.80 in Adjusted EPS last year.
- The Company plans to reinvest approximately 40% of tariff refunds in the third quarter and approximately 60% in the fourth quarter of fiscal 2026.
- Capital expenditures, net of landlord allowances, are expected to be approximately $875 million, excluding potential costs related to a corporate headquarters relocation whose timing and amount remain uncertain.
What to watch
- Comparable store sales performance against Fiscal 2026 guidance of 3% to 4% and third-quarter guidance of 1% to 3%.
- Execution of the planned tariff-refund reinvestment and its stated neutral impact on full fiscal year 2026 earnings guidance.
- Whether Fiscal 2026 Adjusted EBIT margin reaches the guided increase of 20 to 40 basis points versus Fiscal 2025.
- Delivery of approximately 115 net new stores and management of inventory following the 9% year-over-year increase in merchandise inventories.
- Cash generation and capital spending relative to approximately $875 million of planned Fiscal 2026 capital expenditures, net of landlord allowances.
Balance sheet and cash flow
- The Company ended the second quarter of Fiscal 2026 with $1,646 million in liquidity, comprised of $704 million in unrestricted cash and $942 million in availability on its ABL facility.
- The Company ended the second quarter with $1,914 million in outstanding total debt, including $1,712 million on its Term Loan facility, $186 million in Convertible Notes, and no borrowings on its ABL facility.
- Cash and cash equivalents were $703,686 (in thousands) at August 1, 2026, compared with $1,232,525 (in thousands) at January 31, 2026 and $747,619 (in thousands) at August 2, 2025.
- Net cash provided by operating activities was $334,624 (in thousands) for the six months ended August 1, 2026, compared with $150,532 (in thousands) for the six months ended August 2, 2025.
- Net cash used in investing activities was $(537,714) (in thousands) for the six months ended August 1, 2026, compared with $(581,414) (in thousands) for the six months ended August 2, 2025.
- Net cash used in financing activities was $(325,749) (in thousands) for the six months ended August 1, 2026, compared with $183,803 (in thousands) for the six months ended August 2, 2025.
Analysis
Burlington reported strong second-quarter operating results, led by 11% total sales growth to $2,998 million and a 2% comparable-store-sales increase. The comparable result followed 5% growth last year, which management characterized as a 7% two-year stack. The Company also reported 149 net new stores as a driver of inventory growth, underscoring that unit expansion remained an important source of sales growth alongside comparable-store performance.
Profitability improved substantially in the reported quarter. Gross margin rate rose to 46.2% from 43.7%, an increase of 250 basis points. The Company identified $55 million of tariff refunds as a significant contributor, while stating that excluding the refunds, merchandise margin expanded 70 basis points and freight expense increased 10 basis points as a percentage of net sales. GAAP net income was $184 million, or $2.88 per share, versus $94 million, or $1.47 per share. On the Company’s tariff-refund and bankruptcy-acquired-lease adjusted presentation, Adjusted EPS increased 38% to $2.37 from $1.72.
The filing presents additional non-GAAP reconciliations with different adjustment sets. The reconciliation table reports Adjusted Earnings per Share of $2.96 versus $1.59 and Adjusted EBIT of $261,260 (in thousands) versus $150,889 (in thousands). Separately, the release reports Adjusted EBIT excluding tariff refunds and certain expenses associated with bankruptcy acquired leases of $210 million versus $162 million. Investors should distinguish these measures because the stated exclusions differ. SG&A was 34.0% of net sales versus 35.2%, while the stated adjusted SG&A rate was 26.2% versus 26.7%.
Cash flow from operations for the first six months was $334,624 (in thousands), compared with $150,532 (in thousands) a year earlier. The Company spent $(532,384) (in thousands) on property and equipment over the same period and repurchased 270,279 shares for $87 million in the second quarter. It ended the quarter with $1,646 million in liquidity, including $704 million in unrestricted cash, and $1,914 million in outstanding total debt.
Management raised Fiscal 2026 Adjusted EPS guidance to $11.77 to $11.97 and expects total sales growth of 10% to 11% with comparable-store-sales growth of 3% to 4%. Guidance incorporates the $55 million tariff refunds and planned reinvestment of approximately 40% in the third quarter and approximately 60% in the fourth quarter, which management says makes the refunds neutral to full-year earnings. The near-term outlook is more restrained: third-quarter Adjusted EBIT margin is expected to decrease 80 to 60 basis points and Adjusted EPS is expected to be $1.60 to $1.70, compared with $1.80 last year.
Management, verbatim
We are pleased with our strong financial performance in the second quarter, Total sales grew 11% on top of a strong 10% increase last year. Comp store sales increased 2% on top of 5% last year, for a solid 7% two-year stack.
Michael O’Sullivan, CEO
During the second quarter, we received $55 million in tariff refunds. Rather than taking a one-time boost to earnings, we intend to fully invest these refunds back into the business in the back-half of the year, to deliver even sharper values to our shoppers.
Michael O’Sullivan, CEO
Given our intent to invest the refunds in sharper values, we expect the direct impact of tariff refunds to be neutral to full year earnings. That said, we are raising guidance for the full year, passing through our underlying performance beat from Q2.
Michael O’Sullivan, CEO
Not in the filing
stated, not guessed- Prior-quarter comparisons for quarterly revenue, comparable store sales, margins, earnings, EPS, EBITDA, EBIT, inventory, and cash flow were not reported for those respective line items.
- GAAP operating income was not reported as a labeled line item.
- Free cash flow was not reported.
- Dividend declarations or dividend payments were not reported.
- Segment revenue and segment profitability were not reported because the filing does not provide reportable operating segments.
- Prior-quarter outlook was not provided; therefore, a metric-by-metric comparison of actual results versus prior guidance cannot be made.
- Forward-looking GAAP reconciliations for non-GAAP guidance were not provided.
- Fiscal 2026 gross-margin guidance and operating-expense guidance were not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Burlington Stores filed a Form 8‑K reporting its Q2 2026 results, highlighting double‑digit EPS growth and an upgraded full‑year outlook.
Ticker impact
Burlington Stores reported Q2 2026 sales up 11% and raised full-year EPS guidance to $11.77‑$11.97.
upward pressure on BURL stock in the near term
Quarterly earnings exceed prior year, margins improved, and guidance raised, providing clear catalyst for price appreciation.
Market effects
Off‑price retail sector may see broader optimism as Burlington outperforms expectations.
U.S. retail investors could re‑allocate toward discount apparel retailers.
Limited; primarily impacts U.S. consumer discretionary market.
Counterpoint
The stock may already be priced in for the earnings beat, limiting upside.
Key entities
- ExecutiveMichael O’Sullivan
CEO of Burlington Stores who delivered the earnings commentary.
