Advertisement
Australia markets closed
  • ALL ORDS

    8,209.20
    -63.50 (-0.77%)
     
  • ASX 200

    7,971.60
    -64.90 (-0.81%)
     
  • AUD/USD

    0.6692
    -0.0020 (-0.29%)
     
  • OIL

    82.33
    -0.49 (-0.59%)
     
  • GOLD

    2,402.00
    -54.40 (-2.21%)
     
  • Bitcoin AUD

    97,542.70
    +1,096.04 (+1.14%)
     
  • CMC Crypto 200

    1,349.22
    +18.32 (+1.38%)
     
  • AUD/EUR

    0.6145
    -0.0004 (-0.07%)
     
  • AUD/NZD

    1.1114
    +0.0027 (+0.24%)
     
  • NZX 50

    12,325.60
    -3.84 (-0.03%)
     
  • NASDAQ

    19,677.62
    -27.48 (-0.14%)
     
  • FTSE

    8,161.28
    -43.61 (-0.53%)
     
  • Dow Jones

    40,463.99
    -201.03 (-0.49%)
     
  • DAX

    18,231.73
    -123.03 (-0.67%)
     
  • Hang Seng

    17,417.68
    -360.73 (-2.03%)
     
  • NIKKEI 225

    40,063.79
    -62.56 (-0.16%)
     

Burlington Stores (BURL) Tops Q4 Estimates, Sales Rise Y/Y

Burlington Stores, Inc. BURL reported results for fourth-quarter fiscal 2022, wherein sales and earnings beat the Zacks Consensus Estimate. Both the top line and bottom line increased year over year. This performance was driven by improved conversion and basket size and also by improved traffic.

Management also announced its future outlook for fiscal 2023 which was better than analysts’ expectations, which led the share price to increase by approximately 5.1% during the pre-market session on Mar 3. Over the past three months, the stock has increased 8.4% against the industry's decline of 2.3%.

Insight Into the Headlines

Burlington Stores delivered adjusted earnings of $2.96 per share, beating the Zacks Consensus Estimate of $2.72. Also, the bottom line increased from $2.53 a share recorded in the year-ago fiscal period.

Total sales of $2,739 million topped the Zacks Consensus Estimate of $2,600 and increased 5% from the last fiscal year’s quarterly reported figure. Although the company’s Comparable sales decreased 2% from the year-ago period.

Burlington Stores, Inc. Price, Consensus and EPS Surprise

Burlington Stores, Inc. Price, Consensus and EPS Surprise
Burlington Stores, Inc. Price, Consensus and EPS Surprise

Burlington Stores, Inc. price-consensus-eps-surprise-chart | Burlington Stores, Inc. Quote

Margins

Gross margin was 40.7% in the reported quarter, up 90 basis points (bps) from the fourth-quarter fiscal 2021 actuals. Merchandise margins declined 40 bps, partly offsetting the 130 bps improvement in freight expenses.

Adjusted Selling, general and administrative (SG&A), as a rate of sales, was 21.7%, improving 50 bps from the fourth quarter fiscal 2021 actuals. Product sourcing costs included in SG&A came in at $187 million, up from $159 million recorded in the fourth quarter of fiscal 2021. Product sourcing costs represent the processing goods expenses via supply-chain and buying costs.

Adjusted EBITDA increased 70 bps from the fourth quarter of fiscal 2021 to $342 million. Adjusted EBIT was $274 million, up from $241 million in fourth-quarter fiscal 2021. Adjusted EBIT margin increased 80 bps from the fourth quarter of fiscal 2021 finals.

Other Financial Aspects

This Zacks Rank #2 (Buy) company ended the reported quarter with cash and cash equivalents of $872.6 million, long-term debt of $1,462 million and a stockholders’ equity of $794.9 million. BURL exited the fiscal fourth quarter with $1,669 million of liquidity, including $873 million of unrestricted cash and $796 million available under its ABL facility.

Burlington Stores ended the quarter with $1,476 million of outstanding total debt comprising $942 million under its Term Loan Facility, $508 million of Convertible Notes and no borrowings under its ABL Facility.

Merchandise inventories were $1,182 million, up from $1,021 million reported in the fourth-quarter fiscal 2021. Comparable store inventories grew 32% from the level recorded in the same quarter of fiscal 2021. Reserve inventory accounted for 48% of the total inventory at the end of the reported quarter.

Burlington Stores bought back 275,029 shares for $51 million under its share repurchase plan in the fiscal fourth quarter. As of Jan 28, 2023, BURL had $347 million remaining under the share repurchase authorization.

Outlook

For fiscal 2023, comparable sales are expected to increase in the range of 3-5% on top of the 13% decrease during fiscal 2022. Net sales are expected to increase 12-14%, including approximately 2% from the 53rd   week, on top of a 7% decrease in Fiscal 2022. Based on comparable sales increase, management expects 80 to 120 bps expansion in operating margin.

Adjusted EBIT margin is now expected to increase 80-120 bps for the full fiscal. Adjusted earnings per share (EPS) are envisioned in the bracket of $5.50-$6.00 compared with adjusted earnings per share of $4.26 recorded in the last fiscal year.

In fiscal 2023, management intends to open an additional 70 to 80 net new stores and projects capital expenditures, net of landlord allowances of $560 million.

For the first quarter of fiscal 2023, total sales are expected to increase 12-14% and comps are expected to increase 5-7% from the year-ago period. Adjusted EBIT margin is likely to be up by 120-150 bps from the last fiscal year’s quarterly reading and adjusted earnings per share are forecast in the range of 85 cents to 95 cents. Burlington Stores’ adjusted earnings were 54 cents per share in the first quarter of fiscal 2022.

Stocks to Consider

Here we highlighted three better-ranked stocks, namely Costco COST Deckers DECK and Kroger KR.

Costco sells high volumes of food and general merchandise. The stock currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The Zacks Consensus Estimate for Costco’s current financial-year revenues and EPS suggests growth of 7.3% and 8.6%, respectively, from the corresponding year-ago reported figures. COST has a trailing four-quarter earnings surprise of 3.7%, on average.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. DECK has a Zacks Rank #2 at present.

The Zacks Consensus Estimate for Deckers’ current financial-year sales and EPS suggests growth of 12% and 13.6%, respectively, from the year-ago corresponding figures. DECK has a trailing four-quarter earnings surprise of 31%, on average.

Kroger, which operates in the thin-margin grocery industry, carries a Zacks Rank of 3 (Hold) at present. KR’s current financial-year revenues and EPS suggests growth of 7.5% and 12.5%, respectively. KR gave an earnings surprise of 7.3% in the last reported quarter. KR has a trailing four-quarter earnings surprise of 13.4%, on average.

ADVERTISEMENT

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

The Kroger Co. (KR) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

Burlington Stores, Inc. (BURL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research