Why Off-Price Retailer Burlington Stores Shares Are Jumping Today

Burlington Stores Inc BURL reported Q3 FY23 total revenue growth of 12% Y/Y to $2.289 billion, missing the consensus of $2.31 billion. Comparable store sales increased by 6%, within the management guidance of 5%-7%.

Adjusted EPS was $0.98 versus the management guidance of $0.86 - $1.01. Excluding expenses associated with the acquisition of Bed Bath & Beyond leases, Adjusted EPS was $1.10 versus the guidance of $0.97-$1.12.

The gross margin was 43.2% vs. 41.2% for the third quarter, an increase of 200 basis points. At the end of Q3, merchandise inventories were $1.329 billion vs. $1.445 billion last year.

Michael O'Sullivan, CEO, stated, "November is off to a solid start, helped by cooler weather at the beginning of the month. We feel very good about how we are set up for Holiday. That said, the critical high-volume weeks are still ahead of us, and we recognize that there is a lot of uncertainty in the external environment, so we are maintaining our previously issued Q4 guidance."

Adjusted EBITDA was $176 million vs. $123 million a year ago. Adjusted EBIT was $99 million vs. $55 million, and adjusted EBIT, excluding approximately $10 million of expenses associated with the acquisition of Bed Bath & Beyond leases, was $109 million.

Outlook: Burlington forecasts FY23 adjusted EPS of $5.52-$5.67 (prior view $5.37-$5.67). Excluding incremental expenses associated with the recently acquired Bed Bath & Beyond leases, adjusted EPS is expected to be $5.72-$5.87 (prior view $5.60-$5.90).

The company expects FY23 sales growth of approximately 11%, with comparable store sales to increase approximately 3%. Earlier, the company estimated sales growth of approximately 11%-12%.

Price Action: BURL shares are up 21.4% at $165.96 on the last check Tuesday.