US retailer Burlington Stores' sales up 9% in Q2 FY23

Total sales of American retailer Burlington Stores have increased by 9 per cent in the second quarter (Q2) of fiscal 2023 (FY23) as compared to the second quarter of fiscal 2022 to $2,170 million, while comparable store sales went up 4 per cent compared to the second quarter of fiscal 2022.

“Our comparable store sales growth for the second quarter was 4 per cent, which was at the high end of our guidance range, while margin and earnings performance were significantly ahead of our guidance. Our strategies to deliver great value to our customers are working, and we have been helped in the execution of these strategies by very strong availability of great off-price merchandise,” Michael O’Sullivan, CEO, stated.

“Looking at the spring season as a whole, it is clear that the lower-income shopper, our core customer, is still under significant economic pressure. Based on the underlying year-to-date comp trend we are narrowing our full-year comparable store sales guidance to a range of 3 per cent to 4 per cent versus 2022. It is possible that the trend will strengthen in the back half of the year, and if it does, then we are confident that we can chase it,” he added.

In the second quarter, the company’s gross margin rate as a percentage of net sales was 41.7 per cent as against 38.9 per cent for the second quarter of fiscal 2022, an increase of 280 basis points. Merchandise margin improved by 150 basis points and freight expense improved 130 basis points.

SG&A was 35.7 per cent as a percentage of net sales as compared to 34.6 per cent in the second quarter of fiscal 2022, higher by 110 basis points. Adjusted SG&A was 27.0 per cent as a percentage of net sales from 26.1 per cent in the second quarter of fiscal 2022, an increase of 90 basis points, the company said in a press release.

For fiscal 2023, the company expects total sales to increase approximately 11 per cent to 12 per cent, which includes approximately 2 per cent from the 53^rd week, on top of a 7 per cent decrease in fiscal 2022; this assumes comparable store sales will increase in the range of 3 per cent to 4 per cent, on top of the 13 per cent decrease during fiscal 2022.

“Compared to our peers, we have a huge opportunity to expand our store count. We also have potential to improve our sales productivity and individual store economics with our smaller store prototype. Over the past several months there has been an opening up in the supply of great real estate locations, driven by retail bankruptcies. We are very pleased that we have recently been able to acquire the leases to 62 former Bed Bath & Beyond stores. These locations together with the broader loosening of real estate supply should significantly strengthen our new store and relocation pipeline for 2024 and potentially beyond,” O’Sullivan continued.