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Burlington Stores, Inc. (BURL)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 delivered a clean operational beat versus company guidance: comps +6% (vs 0–2% guided), gross margin 42.9% (+30 bps YoY on a 13-week basis), Adjusted EBIT margin 11.1% (+10 bps YoY and ~+60 bps vs guidance range), and Adjusted EPS $4.13 (vs $3.55–$3.75 guided); drivers were “elevate the assortment,” better full-price sell-through, and supply chain productivity gains .
  • FY24 (52-week basis) advanced Burlington 2.0 with total sales +11%, comps +4%, ~100 bps operating margin expansion, 101 net new stores and 31 relocations; liquidity ended at $1.82B with $995M cash and no ABL borrowings .
  • FY25 outlook is conservative given macro/policy uncertainty: sales +6–8% (comps 0–2%), Adj. EBIT margin +0–30 bps, Adj. EPS $8.70–$9.30; CapEx ~$950M (DC ownership strategy), ~100 net new stores, net interest ~$57M, D&A ~$385M, ~25% adjusted tax rate .
  • Near-term watch items: Q1 FY25 guided sales +5–7%, comps flattish, Adj. EBIT margin –50 to –90 bps, Adj. EPS $1.30–$1.45; management cited early-quarter softness from weather and delayed tax refunds but noted trend improved later in February .
  • Wall Street (S&P Global) consensus estimates could not be retrieved at the time of analysis; comparisons are shown versus company guidance and prior periods (consensus context unavailable).

What Went Well and What Went Wrong

What Went Well

  • Comps and earnings beat: comps +6% vs 0–2% guided; Q4 Adjusted EPS $4.13 above $3.55–$3.75 guide; Adjusted EBIT margin 11.1% (60 bps above the high end of guidance) driven by gross margin +30 bps and supply chain efficiencies .
  • Assortment “elevation” strategy resonated: “eliminate to elevate… We want every hanger to count,” with a higher mix of national brands where appropriate; management attributes the +6% comp to customers approving this strategy .
  • Structural progress toward long-range model: FY24 11% sales growth, 100 bps margin expansion, 101 net new stores; attractive IRRs on new stores and relocations; reserve inventory built to support future chase .

What Went Wrong

  • Weather headwind: warmer weather into November and storms/wildfires in January; cold-weather underperformed and reduced Q4 comp by ~1 point despite a strong holiday run-rate .
  • Q1 margin air-pocket: guidance calls Adj. EBIT margin –50 to –90 bps, reflecting less merch margin help early in the year, fixed-cost deleverage at low seasonal volume, and timing of supply chain savings (heavier later in FY25) .
  • Early Q1 softness: February comp trends started weaker due to weather and delayed tax refunds in Midwest/Northeast; trend strengthened as refunds and weather normalized .

Financial Results

Quarterly P&L snapshot (oldest → newest)

MetricQ3 2024Q4 2024
Net Sales ($USD Billions)$2.526 $3.272
Total Revenue ($USD Billions)$2.531 $3.277
Gross Margin (%)43.9% 42.9%
Net Income ($USD Millions)$90.6 $260.8
Diluted EPS ($)$1.40 $4.02
Adjusted EPS ($)$1.55 $4.13
Adjusted EBIT Margin (%)5.6% 11.1%

Year-over-year Q4 comparison (14-week prior-year vs 13-week current; oldest → newest)

MetricQ4 2023 (14 wks)Q4 2024 (13 wks)
Net Sales ($USD Billions)$3.121 $3.272
Total Revenue ($USD Billions)$3.126 $3.277
Gross Margin ($USD Billions)$1.333 $1.404
Gross Margin (%)N/A42.9%
Net Income ($USD Millions)$227.5 $260.8
Diluted EPS ($)$3.53 $4.02
Adjusted EBITDA ($USD Millions)$412 $456
Adjusted EPS ($)$3.69 $4.13

KPIs and balance sheet (quarterly)

KPIQ3 2024Q4 2024
Comparable Store Sales (%)+1% +6%
Merchandise Inventories ($USD Millions)$1,441 $1,251
Comparable Store Inventories YoY–2% –3%
Reserve Inventory (% of total)32% 46%
Liquidity ($USD Billions)$1.705 $1.822
Unrestricted Cash ($USD Millions)$858 $995
ABL Availability ($USD Millions)$847 $827
Total Debt ($USD Millions)$1,714 $1,711
Shares Repurchased ($USD Millions)$56 $61
Remaining Buyback Authorization ($USD Millions)$325 $263
Store Count (period-end)N/A1,108

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Sales GrowthFY2025N/A (first formal FY25)+6% to +8% Initial
Comparable Store SalesFY2025N/A0% to +2% Initial
Adjusted EBIT Margin (Δ vs FY24)FY2025N/A+0 to +30 bps Initial
Adjusted EPS ($)FY2025N/A$8.70–$9.30 Initial
Capital Expenditures (net, $)FY2025N/A~ $950M Initial
Net New Stores (approx.)FY2025N/A~100 Initial
Depreciation & Amortization ($)FY2025N/A~ $385M Initial
Net Interest Expense ($)FY2025N/A~ $57M Initial
Adjusted Effective Tax RateFY2025N/A~ 25% Initial
Total Sales GrowthQ1 FY2025N/A+5% to +7% Initial
Comparable Store SalesQ1 FY2025N/AFlattish Initial
Adjusted EBIT Margin (YoY)Q1 FY2025N/A–50 to –90 bps Initial
Adjusted EPS ($)Q1 FY2025N/A$1.30–$1.45 Initial
Effective Tax RateQ1 FY2025N/A~23% Initial
Adjusted EPS ($) vs GuidanceQ4 FY2024$3.55–$3.75 (Nov. guide) $4.13 actual Beat vs guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
Assortment elevation / better brandsQ2: mix shift to better brands; maintained merch margin via faster turns; +5% comp . Q3: regular-price sell-through strong; AUR higher; merch margin +50 bps .CEO: “eliminate to elevate,” higher-quality/value across good-better-best drove Q4 comp +6% .Strengthening execution and customer response.
Supply chain productivity & DC strategyQ2: ~+60 bps supply chain leverage; longer-term automation in new DCs . Q3: ~50 bps supply chain leverage; lap saves in Q4’23 .Exercised Savannah DC purchase; negotiating purchase of Cactus (CA) DC; CapEx lifted; margin saves weighted to H2’25 .Accelerating strategic control; near-term CapEx up, benefits later.
Consumer/trade-down & trafficQ2: value focus broadening; lower income stabilizing; transactions drove comp . Q3: trade-down in higher-income areas; need-a-deal shopper strong .Q4 comp driven by higher traffic and AUR; need-a-deal and want-a-deal both healthy .Value-led share gains continuing.
Weather impactQ2: weather helped seasonal categories (+1–2 pts) . Q3: warm fall cut comp by ~3 pts; hurricanes ~–1 pt .Q4: warm Nov and Jan storms; cold-weather underperformed; ~–1 pt comp impact .Persistent but managed via nimble buying.
Tariffs / policy / de minimisQ3: low direct import exposure (~8%; ~7% China) and flexible sourcing; disruption could aid off-price .Q4: macro/policy uncertainty; potential tariffs seen as creating off-price buying opportunities; de minimis change unlikely to be material for BURL .Monitoring; could be net opportunity.
Tech/analytics (AI/ML)Q3: rolled out in-season trending and ML-driven localization/allocation to speed chase and lower markdowns .Not newly expanded in Q4 remarks; strategy ongoing .Foundation in place; longer-term benefit.

Management Commentary

  • “The fourth quarter demonstrated the merits of Burlington 2.0… Comparable store sales increased 6%… driven by deliberate strategies… elevate our assortment… well executed by our merchants, supply chain and stores teams.”
  • “Adjusted EBIT Margin was 60 basis points above the high end of our guidance… driven by ahead of plan sales, an increase in gross margin, and better than expected progress in our supply chain initiatives.”
  • “Eliminate to elevate… We want every hanger to count… I interpret our 6% comp sales growth in Q4 as the customer telling us they approved of this strategy.”
  • “The outlook for 2025 is very uncertain… we will manage our business cautiously and flexibly… This approach served us well in 2024.”

Q&A Highlights

  • Early Q1 softness and drivers: February trends weaker than planned due to weather in Midwest/Northeast and delayed EITC/CTC refunds; trends improved as weather/refunds normalized; hence cautious “flattish” Q1 comp guide .
  • Margin cadence: toughest YoY compare in Q1; merch margin help modest in Q1 (mix/timing), fixed-cost deleverage at lowest-volume quarter, supply chain savings loaded to later 2025; biggest YoY margin improvement expected in Q4’25 .
  • Demand composition: both need-a-deal (lower-income) and want-a-deal (trade-down) customers contributed; traffic and AUR up; accessories, beauty, home led categories; apparel mid-single-digit comp positive .
  • Inventory strategy: total inventory +15% YoY reflects 101 net new stores and higher reserves (46%); comp-store inventories –3%; faster turns remain a focus .
  • DC ownership and capital: Savannah DC purchase option exercised; Cactus (CA) DC purchase targeted; FY25 CapEx ~ $950M; leverage impact expected to be modest; repurchases to continue at 2023–24 pace .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 FY2024/25 was unavailable to retrieve at the time of analysis; as a result, comparisons vs estimates are not shown. The company beat its own Q4 guidance with Adj. EPS $4.13 vs $3.55–$3.75 and comps +6% vs 0–2%, implying upside vs internal expectations .

Key Takeaways for Investors

  • Execution beat: Q4 outperformed guidance on comps, gross margin, EBIT margin, and EPS—evidence that Burlington 2.0 (assortment elevation + nimble chase) is translating to sales density and margin resilience .
  • Structural growth intact: FY24 delivered +11% sales, ~100 bps operating margin expansion, and 101 net new stores, positioning BURL to compound sales with attractive new-store IRRs .
  • Conservative FY25 setup: Initial guide embeds macro/policy uncertainty; upside exists if comps land above 0–2% and if supply chain saves pull forward faster than planned .
  • H1/H2 mix: Expect margin trough in Q1 and improvement through the year, largest expansion in Q4—timing important for positioning around prints .
  • Off-price supply tailwinds: Potential tariff/regulatory disruptions may increase off-price availability; management views such uncertainty as net favorable for BURL’s model .
  • Balance sheet support: $1.82B liquidity, no ABL borrowings, ability to fund higher CapEx for DC ownership while maintaining buybacks .
  • Watch inventory reserves: Elevated reserve inventory (46%) offers chase flexibility into 2025 while comp-store inventory remains lean, aiding turns and markdown control .