Press release·03/17/2025 21:54:37

Burlington Stores Delivers Strong Financial Performance in Fiscal 2024

Burlington Stores, a leading off-price retailer, has reported impressive financial results for the fiscal year ended February 1, 2025 (Fiscal 2024). The company’s net sales grew by 9.3% to $10.6 billion, driven by the opening of 101 net new stores and a 4% increase in comparable store sales. This strong top-line performance, combined with improved gross margins and operational efficiencies, led to a significant increase in profitability.

Robust Revenue and Profit Growth

Burlington Stores’ net income for Fiscal 2024 was $503.6 million, a 48% increase from the previous fiscal year. This was primarily driven by higher sales and an expansion in the company’s gross margin rate, which increased to 43.2% from 42.5% in the prior year. The improvement in gross margin was due to higher merchandise margins and lower freight costs.

The company’s Adjusted Net Income, a non-GAAP measure that excludes certain one-time items, also saw a significant improvement, increasing by 34% to $527.9 million. Adjusted EBITDA, another non-GAAP metric that provides a measure of the company’s operating performance, grew by 23% to $1.09 billion.

Expanding Store Footprint and Enhancing the Customer Experience

Burlington Stores continued to execute on its growth strategy, opening 147 new stores during Fiscal 2024, including 31 relocations, and closing 15 stores. The company ended the fiscal year with 1,108 stores across 46 states, Washington D.C., and Puerto Rico. Looking ahead, the company plans to open approximately 100 net new stores in Fiscal 2025.

In addition to expanding its physical footprint, Burlington Stores is also focused on enhancing the customer experience in its stores. The company is investing in select store relocations and downsizes to improve the layout and incorporate its new prototype store designs, which aim to provide a more engaging and efficient shopping environment for customers.

Driving Operational Improvements

To further improve profitability, Burlington Stores is implementing several key initiatives:

1. Driving Comparable Store Sales Growth: The company is focused on more effectively chasing sales trends, operating with leaner inventories, and investing in its merchandising capabilities to better forecast and respond to customer demand.

2. Expanding and Enhancing the Retail Store Base: Burlington Stores is adhering to a market-focused and financially disciplined real estate strategy, with plans to operate 2,000 stores over the long term. The company is also enhancing the in-store experience through strategic relocations and downsizes.

3. Enhancing Operating Margins: The company is improving operational flexibility, optimizing markdowns, and optimizing its supply chain to drive cost efficiencies. Additionally, Burlington Stores is challenging expenses across the organization to drive operating leverage.

Navigating Macroeconomic Uncertainties

While Burlington Stores has delivered strong financial performance, the company acknowledges the ongoing macroeconomic and geopolitical uncertainties that could impact consumer spending. Factors such as high inflation, rising interest rates, and a potential economic slowdown could negatively affect the discretionary spending of the company’s core low-income customers.

To mitigate these risks, Burlington Stores is closely monitoring its net sales, gross margin, and expenses. The company has also performed scenario planning to identify variable costs that could be reduced if sales decline for an extended period. However, the company cannot guarantee that its efforts to counteract the impacts of these trends will be fully effective.

Liquidity and Capital Allocation

Burlington Stores maintains a strong liquidity position, with $863.4 million in cash flow from operations during Fiscal 2024. The company believes that its existing cash, along with its $900 million Asset-Based Lending (ABL) Line of Credit, will be sufficient to fund its expected cash flow requirements for the next 12 months and the foreseeable future.

In terms of capital allocation, the company is focused on investing in its growth initiatives, including new store openings and supply chain enhancements. During Fiscal 2024, Burlington Stores spent $843.9 million on capital expenditures, net of landlord allowances, with a significant portion dedicated to supply chain initiatives, such as the purchase of a distribution center in Ellabell, Georgia.

The company also returned capital to shareholders through its share repurchase program, buying back $241.9 million worth of common stock during Fiscal 2024. As of the end of the fiscal year, Burlington Stores had $263.2 million remaining under its $500 million share repurchase authorization.

Debt and Hedging

Burlington Stores’ debt obligations as of February 1, 2025, include $1.24 billion under its Term Loan Facility, $453.2 million of Convertible Notes, and $25.0 million of finance lease obligations. The company also has an undrawn $827.0 million ABL Line of Credit available.

In September 2024, Burlington Stores entered into an amendment to its Term Loan Facility, which extended the maturity date to September 2031 and reduced the interest rate. The company also issued $297.1 million of new 2027 Convertible Notes, which were used to partially repurchase its existing 2025 Convertible Notes.

To manage its interest rate risk, Burlington Stores has interest rate swaps that hedge $800.0 million of its variable-rate Term Loan Facility exposure, with the swaps expiring in September 2031.

Outlook and Key Risks

Looking ahead, Burlington Stores remains cautiously optimistic about its future prospects, but acknowledges the potential challenges posed by the uncertain macroeconomic environment. The company believes its focus on driving comparable store sales growth, expanding and enhancing its retail store base, and improving operating margins will continue to support its financial performance.

However, the company faces several key risks that could impact its results, including:

1. General Economic Conditions: A prolonged economic slowdown, high inflation, or other macroeconomic factors could negatively affect consumer spending and the company’s core low-income customer base.

2. Seasonality and Weather Conditions: Burlington Stores’ sales are influenced by seasonal trends and weather patterns, which can impact the demand for its merchandise.

3. Competition and Margin Pressure: The company operates in a highly competitive retail environment, which could lead to increased pressure on margins.

4. Supply Chain Disruptions: Disruptions in the company’s supply chain or changes in trade and tariff regulations could impact its ability to obtain merchandise and maintain competitive pricing.

Despite these risks, Burlington Stores remains committed to executing on its strategic initiatives and delivering long-term value for its shareholders. The company’s strong financial position, focus on operational excellence, and dedication to providing customers with a compelling off-price shopping experience position it well for continued success in the years ahead.