US' Burlington Stores' total sales leap 11% in Q1 FY23

30 May '23

3 min read

Pic: JHVEPhoto / Shutterstock.com

Insights

Burlington Stores reported a strong Q1 FY23 with total sales rising 11 per cent to $2,133 million, and comparable store sales were up 4 per cent YoY.
The company's gross margin rate increased by 130bps in Q1 FY23.
Net income doubled to $33 million or $0.50 per share.
Adjusted EBITDA was $157 million in Q1 FY23, up from $125 million in Q1 FY22.

US firm Burlington Stores, Inc, a leading off-price retailer of high-quality, branded apparel, footwear, accessories, and merchandise, has reported an 11-per cent increase in total sales in the first quarter (Q1) of fiscal 2023 (FY23) compared to the same period last year. Total sales reached $2,133 million, while comparable store sales saw a 4-per cent increase from Q1 FY22.

The company reported that gross margin rate as a percentage of net sales was 42.3 per cent, compared to 41 per cent for the same period in the previous fiscal year. This represents an increase of 130 basis points, largely driven by a 150-basis point improvement in freight expense, which was partially offset by a 20-basis point merchandise margin decline due to higher markdowns.

In terms of product sourcing costs, which are included in selling, general and administrative expenses, the company spent $187 million in Q1 FY23, an increase from the $157 million spent in Q1 FY22. Selling, general and administrative expenses for the first quarter were 35.4 per cent as a percentage of net sales, a slight rise of 10 basis points from the previous year, the company said in a press release.

Burlington reported a net income of $33 million, or $0.50 per share, in Q1 FY23, an improvement from the $16 million, or $0.24 per share reported in the first quarter of fiscal 2022. The adjusted net income was $55 million, or $0.84 per share, compared to $36 million, or $0.54 per share in Q1 FY22.

The company reported an adjusted EBITDA of $157 million in Q1 FY23, up from $125 million in Q1 FY22, an increase of 90 basis points as a percentage of sales. The adjusted EBIT was $87 million, an improvement from $59 million in Q1 FY22, showing a 100-basis point increase as a percentage of sales.

Merchandise inventories decreased 2 per cent to $1,231 million, compared to $1,257 million at the end of Q1 FY22. In contrast, comparable store inventories increased 10 per cent. Reserve inventory, which is largely composed of merchandise that will be sent to stores in future months or next season, accounted for 44 per cent of total inventory at the end of Q1 FY23, down from 50 per cent at the end of Q1 FY22.

“Our first quarter comparable sales growth came in just below guidance. We had gotten off to a very strong start but then the trend fell off in March. We believe that this weakening in the trend was driven by two external and transitory factors—lower tax refunds and cooler weather leading up to Easter,” said Michael O’Sullivan, CEO.

Fibre2Fashion News Desk (DP)

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