Market Overview

Burlington Stores, Inc. Reports Record Fourth Quarter and Fiscal 2017 Results; Exceeds Guidance and Introduces Fiscal Year 2018 Outlook

Share:
  • On a GAAP 14 week basis, total sales rose 15%, net income
    increased 92%, and EPS increased 96%
  • On a non-GAAP 13 week basis,
    • Comparable store sales increased 5.9%
    • Adjusted EBITDA increased 14% to $290 million, up 50 basis
      points
    • Adjusted EPS, excluding the estimated impact of the 2017 Tax
      Reform, rose 22% to $2.17
  • Introducing outlook for FY18 Adjusted EPS of $5.73-$5.83

Burlington Stores, Inc. (NYSE:BURL), a nationally recognized off-price
retailer of high-quality, branded apparel at everyday low prices, today
announced its results for the fourth quarter ended February 3, 2018.

Tom Kingsbury, CEO, stated, "We are extremely pleased to report strong
fourth quarter results, driven by a 5.9% comparable store sales
increase, which was on top of last year's 4.6% increase. On a 13 week
basis, we achieved a 22% increase in Adjusted EPS excluding the
estimated impact of the 2017 Tax Reform. This result was driven by
overall sales growth of 10.0% and an improvement of 50 basis points in
both Adjusted EBITDA and EBIT margin. We also passed several significant
milestones in Fiscal 2017, as we surpassed $6 billion in total sales,
expanded our Adjusted EBIT margin by 90 basis points to 8.6%, and
achieved record low aged inventory and record high comparable store
inventory turnover levels. I would like to thank our store, supply chain
and corporate teams for contributing to these strong results."

Fiscal 2017 Fourth Quarter Operating Results

  • Total sales on a 14 week basis increased 14.9% over the prior
    year period to $1,937 million, while sales increased 10.0% on a 13
    week basis to $1,855 million. This growth on a 13 week basis was
    driven by an incremental $79 million from new and non-comparable
    stores, as well as a 5.9% increase in comparable store sales. The
    contribution from new and non-comparable stores was reduced by
    approximately $25 million due to previously disclosed weather related
    store closings.
  • Gross margin on a 14 week basis was $814 million. On a 13 week
    basis, gross margin expanded by 20 basis points over last year's
    levels to 42.0%, driven primarily by increased merchandise margin. The
    gross margin increase was achieved while reducing 91 day and older
    inventory by 26% vs. the prior year. Product sourcing costs, which are
    included in selling, general and administrative expenses (SG&A), were
    flat as a percentage of sales to the Fiscal 2016 fourth quarter.
  • SG&A, less product sourcing costs, on a 14 week
    basis was $446 million. On a 13 week basis, SG&A, less product
    sourcing costs, as a percentage of sales was 22.8%, representing a 40
    basis point improvement compared with the Fiscal 2016 fourth quarter.
    This leverage was attained despite the negative impact of 10 basis
    points each from stock based compensation and incentive compensation.
  • The effective tax rate on a GAAP basis was a benefit of 8.0%
    vs. last year's rate of 34.1%, driven lower by the accounting change
    for stock based compensation and the estimated impact of the Tax Cuts
    and Jobs Act, enacted in December 2017 ("2017 Tax Reform"). The
    Adjusted Effective Tax Rate was a benefit of 5.9% vs. last year's rate
    of 37.2%, due to the same factors. Our Adjusted Effective Tax Rate was
    36.6%, excluding the change in accounting for stock based compensation
    and the estimated impact of the 2017 Tax Reform. Please see the table
    following the financial statements below for a reconciliation of our
    effective tax rates.
  • Net income on a 14 week basis increased 92% over the prior year
    period to $241 million, or $3.47 per share vs. $1.77 last year; this
    result included $0.04 in EPS from the 14th week. Adjusted
    Net Income on a 13 week basis, excluding the estimated impact of the
    2017 Tax Reform, was $2.17 per share vs. $1.78 last year. This
    improvement in Adjusted Net Income, excluding the estimated impact of
    the 2017 Tax Reform, was driven primarily by top line growth, gross
    margin expansion, tight expense control, share repurchases and a $0.03
    per share benefit from the accounting change for stock based
    compensation.
  • Fully diluted shares outstanding amounted to 69.3 million for
    the fourth quarter compared with 70.9 million for last year's fourth
    quarter. The decrease was primarily the result of share repurchases
    under the Company's share repurchase program, discussed in more detail
    below.
  • Adjusted EBITDA on a 14 week basis increased 17%, or $43
    million above the prior year period, to $298 million. On a 13 week
    basis, Adjusted EBITDA increased 14%, or $35 million above the prior
    year period, to $290 million, representing a 50 basis point expansion.
    This improvement was primarily driven by gross margin expansion and
    SG&A leverage, slightly offset by a reduction in Other Income/Revenue.

Full Year Fiscal 2017 Operating Results

  • On a 53 week GAAP basis, total sales increased 9.3% to $6,085 million,
    net income increased 78% to $385 million, and EPS increased 82% to
    $5.48 vs. the 52 week Fiscal 2016 period.
  • On a 52 week basis, total sales increased 7.8% to $6,003 million. This
    growth was driven by a comparable store sales increase of 3.4% and
    $274 million in new and non-comparable sales. The impact of previously
    disclosed weather related store closings reduced the sales from new
    and non-comparable sales by approximately $42 million.
  • Adjusted EBITDA on a 53 week basis increased 19%, or $112 million
    above last year, to $696 million.
  • On a 52 week basis, Adjusted EBITDA grew by 18%, or $104 million above
    last year, to $688 million, representing a 95 basis point increase in
    rate vs. Fiscal 2016. Excluding the estimated impact of the 2017 Tax
    Reform, Adjusted Net Income was $4.37 per share vs. $3.24 last year.

Inventory

  • Merchandise inventories at Fiscal 2017 year-end were $753 million vs.
    $702 million last year. The increase was primarily due to inventory
    related to the 37 net new stores opened during Fiscal 2017, and an
    increase in pack and hold inventory, which was 25% of total inventory
    at the end of the fourth quarter of Fiscal 2017 compared to 23% at the
    end of the fourth quarter of Fiscal 2016. Comparable store inventory
    turnover for the fourth quarter of Fiscal 2017 improved 10%, and
    comparable store inventory was down 7% vs. the comparable period a
    year ago. Inventory aged 91 days and older decreased 26%.

Share Repurchase Activity

  • During the fourth quarter of Fiscal 2017, the Company invested $52
    million of cash to repurchase 457,528 shares of its common stock,
    bringing the total investment in share repurchases to $282 million
    (representing approximately 3 million shares) during Fiscal 2017. As
    of the end of the fourth quarter, the Company had $217 million
    remaining on its current share repurchase authorization.

Full Year Fiscal 2018 and First Quarter 2018
Outlook

For the full Fiscal Year 2018, the Company expects:

  • Total sales growth in the range of 9% to 10% compared to Fiscal 2017,
    excluding the 53rd week;
  • Comparable store sales to increase in the range of 2% to 3% on top of
    last year's 3.4% increase;
  • Adjusted EBITDA margin expansion of 30 to 40 basis points;
  • Depreciation and amortization, exclusive of favorable lease
    amortization, to be approximately $200 million;
  • Adjusted EBIT margin expansion of 20 to 30 basis points;
  • Interest expense of approximately $60 million;
  • An effective tax rate of 23% to 24%;
  • To open 35 to 40 net new stores, and invest Net Capital Expenditures
    of approximately $250 million; and
  • Adjusted EPS in the range of $5.73 to $5.83. The Company expects
    Adjusted EPS excluding the estimated impact of the 2017 Tax Reform and
    the accounting for stock based compensation to be in the range of
    $4.71 to $4.81, representing an increase of 14% to 16% over the
    comparable 52 week 2017 Adjusted EPS of $4.14.

For the first quarter of Fiscal 2018, the Company expects:

  • Total sales to increase in the range of 9.5% to 10.5%;
  • Comparable store sales to increase in the range of 2% to 3%; and
  • Adjusted EPS in the range of $1.05 to $1.09, as compared to $0.79 last
    year. Excluding the estimated benefit of the 2017 Tax Reform and the
    accounting change for stock based compensation, the Company expects
    Adjusted EPS growth to be in the range of 16% to 21%.

The Company has not presented a quantitative reconciliation of the
forward-looking non-GAAP financial measures set out above to their most
comparable GAAP financial measures because it would require the Company
to create estimated ranges on a GAAP basis, which would entail
unreasonable effort. Adjustments required to reconcile forward-looking
non-GAAP measures cannot be predicted with reasonable certainty but may
include, among others, costs related to debt amendments, loss on
extinguishment of debt, and impairment charges, as well as the tax
effect of such items. Some or all those adjustments could be significant.

Note regarding non-GAAP financial measures

The foregoing discussion of the Company's operating results includes
references to Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings
per Share (or Adjusted EPS), Adjusted EBIT, and Adjusted Effective Tax
Rate. The Company believes these measures are useful in evaluating the
operating performance of the business and for comparing its historical
results to that of other retailers. These non-GAAP financial measures
are defined and reconciled to the most comparable GAAP measure later in
this document.

Fourth Quarter 2017 Conference Call

The Company will hold a conference call on Thursday, March 8, 2018 at
8:30 a.m. Eastern Time to discuss the Company's fourth quarter
results. The U.S. toll free dial-in for the conference call is
1-877-407-0789 and the international dial-in number is 1-201-689-8562.

A live webcast of the conference call will also be available on the
investor relations page of the Company's website at www.burlingtoninvestors.com. For
those unable to participate in the conference call, a replay will be
available after the conclusion of the call on March 8, 2018, through
March 22, 2018. The U.S. toll-free replay dial-in number is
1-844-512-2921 and the international replay dial-in number is
1-412-317-6671. The replay passcode is 13677011. Additionally, a replay
of the call will be available on the investor relations page of the
Company's website at www.burlingtoninvestors.com.

Investors and others should note that Burlington Stores currently
announces material information using Securities and Exchange Commission
(SEC) filings, press releases, public conference calls and webcasts. In
the future, Burlington Stores will continue to use these channels to
distribute material information about the Company, and may also utilize
its website and/or various social media sites to communicate important
information about the Company, key personnel, new brands and services,
trends, new marketing campaigns, corporate initiatives and other
matters. Information that the Company posts on its website or on social
media channels could be deemed material; therefore, the Company
encourages investors, the media, our customers, business partners and
others interested in Burlington Stores to review the information posted
on its website, as well as the following social media channels:

Facebook (https://www.facebook.com/BurlingtonCoatFactory/)
and Twitter (https://twitter.com/burlington).

Any updates to the list of social media channels the Company may use to
communicate material information will be posted on the investor
relations page of the Company's website at www.burlingtoninvestors.com.

About Burlington Stores, Inc.

Burlington Stores, Inc., headquartered in New Jersey, is a nationally
recognized off-price retailer with Fiscal 2017 revenue of $6.1 billion.
The Company is a Fortune 500 company and its common stock is traded on
the New York Stock Exchange under the ticker symbol "BURL." The Company
operated 629 stores as of the end of the fourth quarter of Fiscal 2017,
inclusive of an internet store, in 45 states and Puerto Rico,
principally under the name Burlington Stores. The Company's stores offer
an extensive selection of in-season, fashion-focused merchandise at up
to 65% off other retailers' prices, including women's ready-to-wear
apparel, menswear, youth apparel, baby, beauty, footwear, accessories,
home and coats.

For more information about the Company, visit www.burlingtonstores.com.

Safe Harbor for Forward-Looking and Cautionary Statements

This release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended (the Exchange Act).
All statements other than statements of historical fact included in this
release, including those made in the section describing our outlook for
future periods, are forward-looking statements. Forward-looking
statements discuss our current expectations and projections relating to
our financial condition, results of operations, plans, objectives,
future performance and business. You can identify forward-looking
statements by the fact that they do not relate strictly to historical or
current facts. We do not undertake to publicly update or revise our
forward-looking statements even if experience or future changes make it
clear that any projected results expressed or implied in such statements
will not be realized. If we do update one or more forward-looking
statements, no inference should be made that we will make additional
updates with respect to those or other forward-looking statements. All
forward-looking statements are subject to risks and uncertainties that
may cause actual results to differ materially from those we expected,
including competition in the retail industry, seasonality of our
business, adverse weather conditions, changes in consumer preferences
and consumer spending patterns, import risks, inflation, general
economic conditions, our ability to implement our strategy, our
substantial level of indebtedness and related debt-service obligations,
restrictions imposed by covenants in our debt agreements, availability
of adequate financing, our dependence on vendors for our merchandise,
events affecting the delivery of merchandise to our stores, existence of
adverse litigation and risks, availability of desirable locations on
suitable terms, the 2017 Tax Reform and pending interpretations related
thereto and other factors that may be described from time to time in our
filings with the SEC. For each of these factors, the Company claims the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, as amended.

 
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(All amounts in thousands)
 
  Three Months Ended   Fiscal Year Ended
February 3,   January 28, February 3,   January 28,
2018 2017 2018 2017
(14 Weeks)     (53 Weeks)    
REVENUES:
Net sales $ 1,936,829 $ 1,685,715 $ 6,084,766 $ 5,566,038
Other revenue   7,443   6,589   25,277   24,912
Total revenue 1,944,272 1,692,304 6,110,043 5,590,950
COSTS AND EXPENSES:
Cost of sales 1,122,908 981,212 3,559,158 3,297,373
Selling, general and administrative expenses 525,254 461,692 1,863,501 1,723,251
Costs related to debt amendments 2,262 2,262 1,346
Stock option modification expense 10 81 142 601
Depreciation and amortization 53,555 46,956 201,103 183,586
Impairment charges - long-lived assets 1,140 2,340 2,127 2,450
Other income - net (1,939 ) (3,475 ) (8,888 ) (10,835 )
Loss on extinguishment of debt 2,881 2,881 3,805
Interest expense   15,368   12,966   58,777   56,161

Total costs and expenses

  1,721,439   1,501,772   5,681,063   5,257,738
Income before income tax expense 222,833 190,532 428,980 333,212
Income tax (benefit) expense   (17,870 )   64,971   44,128   117,339
Net income $ 240,703 $ 125,561 $ 384,852 $ 215,873
 
 
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(All amounts in thousands)
 
  February 3,     January 28,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 133,286 $ 81,597
Restricted cash and cash equivalents 27,800 27,800
Accounts receivable—net 71,649 43,252
Merchandise inventories 752,562 701,891
Prepaid and other current assets   115,136   73,784
Total current assets 1,100,433 928,324
Property and equipment—net 1,134,772 1,049,447
Goodwill and intangible assets—net 474,011 498,244
Deferred tax assets 6,952 7,973
Other assets   96,661   90,495
Total assets $ 2,812,829 $ 2,574,483
 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 736,252 $ 640,326
Other current liabilities 370,215 354,870
Current maturities of long term debt   13,164   1,638
Total current liabilities 1,119,631 996,834
Long term debt 1,113,808 1,128,843
Other liabilities 313,130 290,683
Deferred tax liabilities 179,486 207,935
Stockholders' equity (deficit)   86,774   (49,812 )
Total liabilities and stockholders' equity (deficit) $ 2,812,829 $ 2,574,483
 
 
BURLINGTON STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(All amounts in thousands)
 
Fiscal Year Ended
February 3,   January 28,
2018 2017
(53 Weeks)    
OPERATING ACTIVITIES
Net income $ 384,852 $ 215,873
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization 201,103 183,586
Deferred income taxes (30,727 ) (2,919 )
Non-cash loss on extinguishment of debt 2,881 3,805
Non-cash stock compensation expense 27,034 15,953
Non-cash rent (24,689 ) (27,910 )
Deferred rent incentives 48,834 32,212
Changes in assets and liabilities:
Accounts receivable (19,983 ) (3,489 )
Merchandise inventories (50,671 ) 81,048
Accounts payable 97,003 41,543
Other current assets and liabilities (40,346 ) 61,552
Long term assets and liabilities (2,109 ) 5,715
Other operating activities   14,068   8,947
Net cash provided by operating activities   607,250   615,916
INVESTING ACTIVITIES
Cash paid for property and equipment (268,194 ) (187,507 )
Proceeds from insurance recoveries related to property and equipment 5,980
Other investing activities   6   7,156
Net cash (used in) investing activities   (262,208 )   (180,351 )
FINANCING ACTIVITIES
Proceeds from long term debt—ABL Line of Credit 1,215,500 1,392,700
Principal payments on long term debt—ABL Line of Credit (1,215,500 ) (1,560,100 )
Proceeds from long term debt—Term Loan Facility 1,114,207 1,114,208
Principal payments on long term debt—Term Loan Facility (1,119,793 ) (1,117,000 )
Purchase of treasury shares (289,777 ) (202,371 )
Other financing activities   2,010   (2,320 )
Net cash used in financing activities   (293,353 )   (374,883 )
Increase in cash and cash equivalents 51,689 60,682
Cash and cash equivalents at beginning of period   81,597   20,915
Cash and cash equivalents at end of period $ 133,286 $ 81,597
 

Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(Amounts
in thousands except per share data)

Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, Adjusted EBIT and
Adjusted Effective Tax Rate

The following tables calculate the Company's Adjusted Net Income,
Adjusted EPS, Adjusted EBITDA, Adjusted EBIT and Adjusted Effective Tax
Rate, all of which are considered non-GAAP financial measures.
Generally, a non-GAAP financial measure is a numerical measure of a
company's performance, financial position or cash flows that either
excludes or includes amounts that are not normally excluded or included
in the most directly comparable measure calculated and presented in
accordance with GAAP.

Adjusted Net Income is defined as net income for the period plus (i) net
favorable lease amortization, (ii) costs related to debt amendments,
(iii) stock option modification expense, (iv) loss on extinguishment of
debt, (v) impairment charges, (vi) amounts related to certain litigation
and (vii) other unusual, non-recurring or extraordinary expenses,
losses, charges or gains, all of which are tax effected to arrive at
Adjusted Net Income.

Adjusted EPS is defined as Adjusted Net Income divided by the fully
diluted weighted average shares outstanding, as defined in the table
below.

Adjusted EBITDA is defined as net income for the period before (i) net
interest expense, (ii) loss on the extinguishment of debt, (iii) costs
related to debt amendments, (iv) stock option modification expense, (v)
depreciation and amortization, (vi) impairment charges, (vii) amounts
related to certain litigation, (viii) income tax expense (benefit) and
(ix) other unusual, non-recurring or extraordinary expenses, losses,
charges or gains.

Adjusted EBIT is defined as net income for the period plus (i) net
interest expense, (ii) net favorable lease amortization, (iii) loss on
the extinguishment of debt, (iv) costs related to debt amendments, (v)
stock option modification expense, (vi) impairment charges, (vii)
amounts related to certain litigation, (viii) income tax expense
(benefit) and (ix) other unusual, non-recurring or extraordinary
expenses, losses, charges or gains.

Adjusted Effective Tax Rate is defined as GAAP effective tax rate less
the tax effect of the reconciling items to arrive at Adjusted Net Income
(footnote (f) in the table below).

The Company presents Adjusted Net Income, Adjusted EPS, Adjusted EBITDA,
Adjusted EBIT and Adjusted Effective Tax Rate, and certain of those
measures as further adjusted for the accounting change for stock based
compensation and the estimated effect of the 2017 Tax Reform, because it
believes they are useful supplemental measures in evaluating the
performance of the Company's business and provide greater transparency
into the results of operations. In particular, the Company believes that
excluding certain items that may vary substantially in frequency and
magnitude from what the Company considers to be its core operating
results are useful supplemental measures that assist in evaluating the
Company's ability to generate earnings and leverage sales, and to more
readily compare core operating results between past and future periods.

The Company believes that these non-GAAP measures provide investors
helpful information with respect to the Company's operations and
financial condition. Other companies in the retail industry may
calculate these non-GAAP measures differently such that the Company's
calculation may not be directly comparable.

The following table shows the Company's reconciliation of net income to
Adjusted Net Income and Adjusted EPS for the periods indicated:

 
  (unaudited)
(in thousands, except per share data)
Three Months Ended   Fiscal Year Ended
February 3,   January 28, February 3,   January 28,
2018 2017 2018 2017
(14 Weeks)     (53 Weeks)    
Reconciliation of net income to Adjusted Net Income:
Net income $ 240,703 $ 125,561 $ 384,852 $ 215,873
Net favorable lease amortization (a) 5,574 5,902 23,325 23,828
Costs related to debt amendments (b) 2,262 2,262 1,346
Stock option modification expense (c) 10 81 142 601
Loss on extinguishment of debt (b) 2,881 2,881 3,805
Impairment charges (d) 1,140 2,340 2,127 2,450
Litigation accrual (e) 2,057 3,457
Tax effect (f)   (3,561 )   (9,807 )   (9,836 )   (19,092 )
Adjusted Net Income $ 249,009 $ 126,134 $ 405,753 $ 232,268
Fully diluted weighted average shares outstanding (g) 69,305 70,878 70,288 71,721
Adjusted Earnings per Share $ 3.59 $ 1.78 $ 5.77 $ 3.24
 

The following table shows the Company's reconciliation of net income to
Adjusted EBITDA for the periods indicated:

 
(unaudited)
(in thousands)
Three Months Ended   Fiscal Year Ended
February 3,   January 28, February 3,   January 28,
2018 2017 2018 2017
(14 Weeks)     (53 Weeks)    
Reconciliation of net income to Adjusted EBITDA:

 

 

Net income $ 240,703 $ 125,561 $ 384,852 $ 215,873
Interest expense 15,368 12,966 58,777 56,161
Interest income (73 ) (14 ) (206 ) (56 )
Loss on extinguishment of debt (b) 2,881 2,881 3,805
Costs related to debt amendments (b) 2,262 2,262 1,346
Stock option modification expense (c) 10 81 142 601
Depreciation and amortization 53,555 46,956 201,103 183,586
Impairment charges (d) 1,140 2,340 2,127 2,450
Litigation accrual (e) 2,057 3,457
Income tax (benefit) expense   (17,870 )   64,971   44,128   117,339
Adjusted EBITDA $ 297,976 $ 254,918 $ 696,066 $ 584,562
 

The following table shows the Company's reconciliation of net income to
Adjusted EBIT for the periods indicated:

 
(unaudited)
(in thousands)
Three Months Ended   Fiscal Year Ended
February 3,   January 28, February 3,   January 28,
2018 2017 2018 2017
(14 Weeks)     (53 Weeks)    
Reconciliation of net income to Adjusted EBIT:
Net income $ 240,703 $ 125,561 $ 384,852 $ 215,873
Interest expense 15,368 12,966 58,777 56,161
Interest income (73 ) (14 ) (206 ) (56 )
Net favorable lease amortization (a) 5,574 5,902 23,325 23,828
Loss on extinguishment of debt (b) 2,881 2,881 3,805
Costs related to debt amendments (b) 2,262 2,262 1,346
Stock option modification expense (c) 10 81 142 601
Impairment charges (d) 1,140 2,340 2,127 2,450
Litigation accrual (e) 2,057 3,457
Income tax (benefit) expense   (17,870 )   64,971   44,128   117,339
Adjusted EBIT $ 249,995 $ 213,864 $ 518,288 $ 424,804
 
 
(a) Net favorable lease amortization represents the non-cash
amortization expense associated with favorable and unfavorable
leases that were recorded as a result of purchase accounting related
to the April 13, 2006 Bain Capital acquisition of Burlington Coat
Factory Warehouse Corporation, and are recorded in the line item
"Depreciation and amortization" in our Condensed Consolidated
Statements of Income.
(b) Represents costs related to the repricing and extension of our Term
Loan Facility during Fiscal 2017 and the repricing of our Term Loan
Facility during Fiscal 2016.
(c) Represents expenses incurred as a result of our May 2013 stock
option modification.
(d) Represents impairment charges on long-lived assets.
(e) Represents amounts charged for certain litigation.
(f) Tax effect is calculated based on the effective tax rates (before
discrete items) for the respective periods for the tax impact of
items (a) through (e).
(g) Fully diluted weighted average shares outstanding starts with basic
shares outstanding and adds back any potentially dilutive securities
outstanding during the period. Fully diluted weighted average shares
outstanding is equal to basic shares outstanding if the Company is
in an Adjusted Net Loss position.
 

The following table shows the reconciliation of the effective tax rates
used in this press release to the Company's effective tax rate on a GAAP
basis for the periods indicated:

 
(unaudited)
Three Months Ended   Fiscal Year Ended
February 3,   January 28, February 3,   January 28,
2018 2017 2018 2017
(14 Weeks)     (53 Weeks)    
       
Adjusted Effective Tax Rate, excluding the change in accounting
for stock based compensation and the impact of the 2017 Tax Reform
36.6 % 34.1 % 37.0 % 35.2 %
Accounting change for stock based compensation (1.8 ) (4.4 )
Effect of the 2017 Tax Reform on tax rate and deductions (1.0 ) (0.6 )
One-time deferred tax revaluation due to the 2017 Tax Reform   (41.8 )     (21.7 )  
Effective tax rate on a GAAP basis ((benefit) expense) (8.0 )% 34.1 % 10.3 % 35.2 %
Adjustments to arrive at Adjusted Effective Tax Rate   2.1   3.1   1.4   1.8
Adjusted Effective Tax Rate ((benefit) expense)   (5.9 )%   37.2 %   11.7 %   37.0 %
 

The following table shows the reconciliation of the Company's net income
per share to the Company's Adjusted Earnings per Share, exclusive of the
impact of the 2017 Tax Reform for the periods indicated:

 
(unaudited)
Three Months Ended     Fiscal Year Ended
February 3,   January 28, February 3,   January 28,
2018 2017 2018 2017
Net income per share $ 3.47 $ 1.77 $ 5.48 $ 3.01
53rd week (0.04 ) (0.04 )
Adjustments to arrive at Adjusted Earnings per Share   0.12   0.01   0.29   0.23
Adjusted Earnings per Share (13/52 weeks) 3.55 1.78 5.73 3.24
Effect of the 2017 Tax Reform on tax rate and deductions (0.04 ) (0.04 )
One-time deferred tax revaluation due to the 2017 Tax Reform   (1.34 )     (1.32 )  
Adjusted Earnings per Share (13/52 weeks), excluding the 2017 Tax
Reform
$ 2.17 $ 1.78 $ 4.37 $ 3.24

View Comments and Join the Discussion!