Executive Summary

Q3 FY2025 results are not yet released; Burlington scheduled the earnings release and call for Nov 25, 2025 (8:30am ET) .
Ahead of Q3, Burlington raised full-year FY2025 guidance in August on strong Q2 performance; Q3 guidance calls for total sales +5–7%, comps 0–2%, adjusted EBIT margin down ~20bps to flat, and adjusted EPS $1.50–$1.60 (excludes bankruptcy-acquired lease expenses) .
Q2 delivered a high-quality beat: total sales +10%, comps +5%, gross margin +90bps (merch +60bps, freight +30bps), adjusted EBIT margin +120bps to ~6%, and adjusted EPS +39% to $1.72; management cited stronger merchandise margins, lower freight, and SG&A leverage .
Management remains cautious on the back half given outerwear seasonality and tariff-driven markup pressure but emphasizes readiness to “chase” better trends, supported by reserve inventory and strong off-price availability .
Wall Street consensus (S&P Global) for Q3 FY2025 EPS/revenue was unavailable at time of writing due to provider limits; comparisons to estimates are therefore not possible at this time.

What Went Well and What Went Wrong

What Went Well

Strong Q2 momentum: comps +5% on top of +5% last year, gross margin expanded 90bps, adjusted EPS +39% to $1.72, and adjusted EBIT margin +120bps to ~6% .
Merchandising and store execution: management linked Q2 outperformance to Burlington 2.0 initiatives (Merchandising 2.0 systems/processes; Store Experience 2.0 rollout with improved standards, signage/fixturing) driving better fashion/brand mix, customer experience, and comp lift .
Readiness to chase: reserve inventory rose to 50% of total in Q2 (mostly pre-tariff buys), enabling flexibility and value flow into H2; comparable-store inventories -8% to drive faster turns/lower markdowns .

What Went Wrong

Tariff-driven markup pressure: Q2 markup was “only modestly lower” due to offsets, but management expects gross margin pressure in Q3 and more pronounced merch margin pressure in Q4 .
Category softness: Home trailed chain due to tariff-related import disruptions in categories with limited ex-China supply (decorative bedding, cookware, toys) .
Macro/seasonality risks: outerwear sensitivity to warmer fall weather and broader consumer/inflation risks create uncertainty in Q3/Q4 despite strong off-price availability .

Financial Results

Note: Q3 FY2025 actual results are not yet available; Q3 figures below reflect company guidance. Prior two quarters (Q1/Q2 FY2025) are actuals.

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025 Guidance
Total Revenue ($USD Billions)	N/A	$2.504	$2.705	N/A
GAAP Diluted EPS ($)	$1.55 (Adjusted)	$1.58	$1.47	$1.50–$1.60 (Adjusted)
Adjusted EPS ($)	$1.55	$1.67	$1.72	$1.50–$1.60
Gross Margin (%)	N/A	43.8%	43.7%	Lower YoY (merch margin pressure expected)
Adjusted EBIT Margin (%)	N/A	~6.1%	~6.0%	Down ~20bps to flat YoY
Comparable Store Sales (%)	N/A	0%	+5%	0–2%
Traffic	N/A	N/A	Flattish	N/A
Average Unit Retail (AUR)	N/A	N/A	Up mid-single digits YoY	N/A

KPIs and mix signals in Q2:

Traffic flattish; transaction size drove comps; AUR up mid-single digits .
Physical inventory showed lower shortage; faster turns reduced markdowns (merch margin +60bps) .
Freight leveraged 30bps via transportation savings and operational efficiencies .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Sales Growth (%)	FY 2025	+6% to +8%	+7% to +8%	Raised
Comparable Store Sales (%)	FY 2025	0% to +2%	+1% to +2%	Raised
Adjusted EBIT Margin (bps YoY)	FY 2025	0 to +30bps	+20 to +40bps	Raised
Net Interest Expense ($MM)	FY 2025	~$57	~$50	Lowered
Adjusted EPS ($)	FY 2025	$8.70–$9.30	$9.19–$9.59	Raised
Adjusted Effective Tax Rate (%)	FY 2025	~25%	~25%	Maintained
Capex, net ($MM)	FY 2025	~$950	~$950	Maintained
D&A ($MM)	FY 2025	~$385	~$385	Maintained
New Stores (Net)	FY 2025	~100	~100	Maintained
Q3 Total Sales Growth (%)	Q3 2025	N/A	+5% to +7%	Initiated
Q3 Comps (%)	Q3 2025	N/A	0% to +2%	Initiated
Q3 Adjusted EBIT Margin YoY	Q3 2025	N/A	down ~20bps to flat	Initiated
Q3 Adjusted EPS ($)	Q3 2025	N/A	$1.50–$1.60	Initiated

Note: Guidance figures exclude anticipated expenses associated with bankruptcy-acquired leases .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 context)	Trend
Tariffs/Macro	Q1/Q2: Significant markup pressure; offsets include vendor cost work, assortment remix, selective retail increases, faster turns, supply chain savings, SG&A efficiencies	Expect gross margin pressure in Q3; planning conservatively; offsets continue	Pressure rising; offsets scaling
Supply Chain/Freight	Q1/Q2: Freight -10–30bps benefit; locked ocean rates through Q1’26; risk from spot if surge; domestic capacity secured	Expect modest freight favorability vs merch margin pressure	Stable/beneficial
Merchandising 2.0	Systems/process agility to pivot amid tariffs; elevated assortment with brands/fashion	Continue elevation, chase with reserve inventory	Strengthening
Store Experience 2.0	Half-chain retrofitted; better standards, service, productivity; sales lift	Continued rollouts; benefit expected into H2/FY2026	Positive momentum
Category/Regional	Beauty/accessories/shoes strongest; Home softer; SE/Northeast strongest, Midwest weakest (weather)	Outerwear sensitivity in Q3; watch weather	Mixed; seasonal sensitivity
Inventory/Reserve	Comp-store inventory -8%; reserve 50% of total (pre-tariff buys)	Use reserve to chase if trend strengthens	Strategic advantage

Management Commentary

“Adjusted EBIT Margin increased 120 basis points, while Adjusted EPS grew 39%… driven by ahead of plan sales, higher merchandise margin, lower freight expense and leverage on SG&A expenses.” — Michael O’Sullivan (Q2) .
“We are maintaining our comp guidance of 0% to 2% for Q3 and Q4… we will manage our business conservatively and be ready to chase.” — Michael O’Sullivan (Q2) .
“Gross margin… +90bps… 60bps increase in merchandise margin and a 30bps decrease in freight expense… markup was only modestly lower than last year because we took several effective actions to reduce the impact of tariffs.” — Kristin Wolfe (Q2) .
“Customer service scores are running at historical all time highs… significant improvements in all major operating metrics… leveraging store payroll… our redesigned layout is much more off-price and Burlington 2.0.” — Michael O’Sullivan (Q2) .
“Merchandise availability in the off-price channel is very strong right now… reserve inventory was bought at pre-tariff pricing.” — Michael O’Sullivan (Q2) .

Q&A Highlights

Guidance conservatism vs Q2 strength: Management passed most of Q2 upside to FY guide but held cautious back-half comps (outerwear/weather and tariff risk) .
Tariff offsets: Vendor negotiations, assortment remix, selective retails, faster turns to reduce markdowns, supply chain and SG&A savings across P&L .
Inventory strategy: Comp-store inventory planned down to drive turns; reserve inventory (50% of total) enables chase with pre-tariff goods .
Pricing: Industry AURs rising selectively; Burlington cautious due to price-sensitive customer; off-price value gap may widen if broader retail raises prices .
Shortage/merch margin: Physical inventory showed lower shortage; faster turns lowered markdowns; freight leverage aided margins .

Estimates Context

S&P Global consensus EPS and revenue estimates for Q3 FY2025 were unavailable at time of writing due to provider request limits; estimate-based comparisons are therefore not provided.
Prior-year Q3 adjusted EPS was $1.55, offering a directional benchmark against Burlington’s Q3 FY2025 adjusted EPS guidance of $1.50–$1.60 .

Key Takeaways for Investors

Into Q3, expect near-term gross margin headwinds from tariffs, partially offset by freight savings, faster turns, and SG&A/productivity initiatives; monitor merch margin trajectory and management commentary on offsets .
Weather is a key swing factor given outerwear sensitivity; reserve inventory positions Burlington to “chase” if trend strengthens (potential upside to Q3/Q4) .
Burlington 2.0 (elevated assortment, store experience) and younger-store comp tailwinds are driving multi-quarter comp and margin improvement; look for continued evidence in holiday/Q4 .
FY2025 guide was raised on Q2 strength; watch for any further adjustments on Nov 25 (catalyst: magnitude of tariff impact vs offsets, Q4 margin outlook) .
Category mix: Beauty/accessories/shoes momentum vs Home pressure; any normalization in home supply could aid comps/margins .
Balance sheet/liquidity improved (additional term loan for DC, ABL upsized to $1B, liquidity ~$1.7B at Q2); interest expense guidance reduced to ~$50M .
With consensus unavailable, focus on company guidance ranges and qualitative signals (tariff trajectory, weather, traffic/AUR, shortage) as near-term trading inputs .

Appendix: Document Availability and Upcoming Event

Q3 FY2025 8‑K 2.02 earnings press release and Q3 FY2025 earnings call transcript are not yet available; Burlington scheduled release/call for Nov 25, 2025 .
Q2 FY2025 and Q1 FY2025 results and calls reviewed: Press releases and 8‑Ks (including non‑GAAP reconciliations), plus full Q2 earnings call transcript .
Other relevant Q3 period press release: Nov 11 announcement of Q3 release timing .

Notes:

Guidance figures exclude anticipated expenses associated with bankruptcy-acquired leases (explicitly disclosed) .
Consensus estimates via S&P Global were unavailable at time of writing; comparisons will be updated once accessible.

Burlington Stores, Inc. (BURL)·Q3 2025 Earnings Summary