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Christopher Lee/Bloomberg
Burlington Stores
stock overcame early weakness to notch small gains Thursday morning, after the discounter swung to a much smaller-than-anticipated loss in its second quarter, amid Covid-19 closures.
Burlington Stores (ticker: BURL) said it lost $46.8 million, or 71 cents a share, compared with a profit of $1.26 a share in the year-ago period. On an adjusted basis, it lost 56 cents a share on revenue that fell 39% to $1.01 billion. Analysts were looking for the company to lose $1.06 a share on revenue of $1.13 billion.
Instead of providing traditional same-store sales data, Burlington provided a “sales in reopened stores,” metric, which fell 14% from the date of their reopening to the end of the quarter.
Burlington stock was initially lower on the report, but rose 0.8% to $198 in recent trading.
The quarter wasn’t perfect, of course. Sales came in a bit light, and the company didn’t provide any guidance for the full year, citing the pandemic. In addition, like other off-price retailers, inventory was low in the period, which weighed on revenue.
However, there were also a lot of bright spots. While inventory was low, that was due in large part to strong demand, as shoppers snapped up goods faster than it could replace them on shelves. (Available merchandise should improve over time, especially as distressed full-price stores look to offload goods.) Burlington did less discounting than many peers in the quarter, which helped gross margins expand.
On the company’s conference call, management said there was significant pent-up demand in June as stores reopened, and improved inventory has meant that sales are trending higher this month. (Burlington’s quarter ended August 1.)
Same-store sales will still be down in the current quarter, but the pandemic hasn’t done much to slow down the company’s expansion plans. It’s looking to open 62 new stores this year, compared with 26 closed or relocated locations.
Burlington is the last of three major off-price retailers to report earnings. Last week leader
TJX
Cos. (TJX), owner of TJ Maxx and Marshalls, reported a surprise loss which weighed on shares. A day later, a surprise profit boosted Ross Stores, a neat reversal of what happened when the group reported results in the spring. Burlington shares are up more than 13% since Barron’s recommended them last spring, despite headwinds stemming from the pandemic.
Write to Teresa Rivas at [email protected]
