American retailer Burlington Stores' net sales jump 12% in Q3 FY23

The gross margin rate experienced a notable improvement, reaching 43.2 per cent of net sales, which is a substantial increase of 200 basis points from 41.2 per cent in the third quarter of fiscal 2022. This increase was primarily driven by a 150-basis-point improvement in merchandise margin and a 50 basis points decrease in freight expense.

Despite these positive results, selling, general and administrative expenses rose slightly to 36.2 per cent of net sales, up from 35.7 per cent in the same period last year. The adjusted selling, general and administrative expenses also increased by 50 basis points to 27.3 per cent, the company said in a press release.

Net income showed a remarkable improvement, soaring to $49 million, or $0.75 per share, a significant leap from $17 million, or $0.26 per share in Q3 FY22. Adjusted net income also saw a substantial rise, reaching $64 million, or $0.98 per share, compared to $28 million, or $0.43 per share in the previous year.

The company's adjusted EBITDA stood at $176 million, a significant increase over the $123 million recorded in the third quarter of fiscal 2022. Similarly, adjusted EBIT rose to $99 million from $55 million in the same quarter of the previous fiscal, marking an increase of 170 basis points as a percentage of sales.

In the first nine months of fiscal 2023, Burlington Stores maintained this positive trajectory. Total sales increased by 11 per cent compared to the same period in fiscal 2022. Net income showed a striking 150 per cent increase, reaching $112 million, or $1.73 per share, significantly up from $0.68 per share in the prior period. Adjusted EBIT rose by $97 million to $254 million, an increase of 120 basis points as a percentage of sales. Adjusted net income and adjusted eps also increased by 81 per cent and 84 per cent respectively.

On the inventory front, merchandise inventories were $1,329 million at the end of the third quarter of fiscal 2023, an 8 per cent decrease from $1,445 million at the end of the third quarter of fiscal 2022. However, comparable store inventories saw a 2 per cent increase. Reserve inventory accounted for 30 per cent of the total inventory at the end of the third quarter of fiscal 2023, slightly down from 31 per cent in the previous year.

“We were pleased with our performance during the third quarter. We had a strong trend in August and September, and this drove 6 per cent comparable store sales growth for the full quarter despite the negative impact of unseasonably warm weather in October. This trend together with strong merchandise margins delivered earnings at the high end of expectations,” said Michael O’Sullivan, CEO.

Fibre2Fashion News Desk (DP)