US' Burlington Stores' Q3 FY24 revenue shoots up to $2.53 bn

The gross margin rate as a percentage of net sales was 43.9 per cent vs 43.2 per cent in Q3 FY23, an increase of 70 basis points. The merchandise margin of the company expanded by 50 basis points, primarily driven by lower markdowns and higher markup, while freight expense improved 20 basis points, Burlington Stores said in a press release.

The net income of the company was $91 million, or $1.40 per share in this quarter vs $49 million, or $0.75 per share in Q3 last fiscal. Diluted weighted average shares outstanding amounted to 64.6 million during Q3 compared with 64.8 million in the same quarter of FY23. Adjusted EBITDA was $229 million vs $185 million. Adjusted EBIT was $141 million vs $109 million, an increase of 80 basis points as a percentage of sales.

Selling, general and administrative (SG&A) expenses were 35.4 per cent as a percentage of net sales vs 36.2 per cent in Q3 FY23, improving by 80 basis points. Adjusted SG&A was 26.9 per cent as a percentage of net sales vs 27.3 per cent in the same quarter of last fiscal, a decrease of 40 basis points.

“Our third quarter comp trend started out very strongly, but then warmer temperatures from mid-September onwards slowed our sales momentum. Cold Weather categories represent about 15 per cent of sales in the third quarter. Excluding these categories, our comp growth in the third quarter was 4 per cent, which is consistent with the trend that we have seen in our business since March. We are very encouraged by this underlying comp sales trend,” said Michael O’Sullivan, chief-executive officer (CEO) of Burlington Stores.

“I was very pleased with how well our teams reacted to the change in weather. We proactively controlled liquidity and receipts, especially of Cold Weather merchandise, and drove strong margin improvement and earnings growth in the third quarter, with an adjusted EBIT Margin increase of 80 basis points, and adjusted EPS growth of 41 per cent. These increases were driven by higher gross margin and leverage on supply chain expenses,” added O’Sullivan.

Nine months (9M) of fiscal 2024 results

Burlington’s total revenue reached $7.36 billion in the 9M period of FY24, a notable increase of 11.5 per cent from $6.60 billion in the same period in FY23. Net sales of the company rose 11.5 per cent to $7.34 billion, compared to $6.59 billion in the previous year. Other revenue slightly decreased to $13.1 million from $13.2 million in the same period of prior fiscal. Total sales in the 9M period of FY24 increased 11 per cent YoY, while net income of the company increased 116 per cent YoY to $243 million, or $3.77 per share vs $1.73 per share compared to the same period in FY23.

Cost of sales increased 9.5 per cent to $4.16 billion, reflecting higher sales volumes. SG&A expenses rose by 9.5 per cent to $2.58 billion, compared to $2.36 billion last year. Depreciation and amortisation expenses saw a significant rise of 16.5 per cent to $256.1 million, up from $219.7 million YoY. Impairment charges for long-lived assets increased to $11.3 million from $6.4 million in the prior-year period.

Outlook

For the full fiscal 2024, Burlington expects total sales to increase in the range of 9-10 per cent, comparable store sales to increase approximately 2 per cent. The company expects capital expenditures, net of landlord allowances, to reach approximately $750 million. Depreciation and amortisation are estimated to be $350 million, and adjusted EBIT margin is expected to increase in the range of 60 to 70 basis points.

The company expects net interest to reach $40 million, adjusted effective tax rate of approximately 26 per cent; and adjusted EPS in the range of $7.76 to $7.96. This assumes a fully diluted share count of approximately 65 million shares.

For the fourth quarter (Q4) of fiscal 2024, the company expects total sales to increase in the range of 5 to 7 per cent, and comparable store sales in the range of 0-2 per cent compared to Q4 of fiscal 2023. Adjusted EBIT margin is expected to decrease 50 to 80 basis points versus the Q4 of fiscal 2023. It also expects an effective tax rate of approximately 26 per cent, and adjusted EPS in the range of $3.55 to $3.75, as compared to $3.69 in Q4 last fiscal.

Fibre2Fashion News Desk (SG)