Strong Earnings Growth
Adjusted EPS of $2.10 in Q1, up 26% year-over-year; marks the 14th consecutive quarter of double-digit earnings growth and demonstrates consistent earnings flow-through from sales.
Burlington Stores
· BURL
May 28th, 2026
Summary
- Earnings Call Date:
- 2026-05-28
- Change Since:
- +12.40%
- Next Earnings Date:
- 2026-08-20
Earnings Call Sentiment
PositiveThe call emphasized strong top-line growth (Q1 total sales +14%, comps +6%) and notable margin and EPS outperformance (Q1 EPS +26%, operating margin +20 bps), supported by supply chain productivity, improved allocation/localization, accelerated store growth and healthy liquidity. Management raised full-year sales and EPS guidance and signaled continued store productivity upside and rollout of Store Experience 2.0. Key risks discussed include higher freight/fuel costs, inventory build (11% comp inventory increase), regional dispersion, uncertainty around tariff refunds, and macro pressures (higher gas prices, geopolitical risk). Overall, the positive operational execution, margin expansion and upgraded guidance materially outweigh the manageable risks discussed.
Company Guidance
Burlington raised its fiscal 2026 outlook, now targeting total sales growth of 9%–11% (vs. prior 8%–10%) with full‑year comp store sales of +2%–4%, adjusted EPS of $11.45–$11.80 (+13%–16% YoY) and adjusted EBIT margin expansion of 10–30 bps; the company now expects 135 gross / 115 net new stores (majority in H1) and roughly $875M of capex (net of landlord allowances). For Q2 it guides comps +1%–3%, total sales +10%–12%, operating margin expansion of 30–60 bps and adjusted EPS $2.05–$2.20 (vs $1.72 LY, implying ~19%–28% EPS growth), excluding ~$3M of bankruptcy‑acquired lease costs (vs $11M LY). The back half outlook is unchanged (comps +1%–3%, total sales +8%–10%, adj EBIT margin +10–30 bps, EPS $7.30–$7.50). Q1 trends that drove the lift included 14% total sales, 6% comp, EPS +26%, gross margin 44.1% (+30 bps), comparable inventories +11% with reserve inventory 41% (vs 48% a year ago), liquidity of ~$1.7B (cash $747M, ABL availability $942M, no outstanding ABL borrowings), $81M repurchased in Q1 with $304M remaining on the buyback, 1,242 stores at quarter end and sales/selling sqft ≈ $350 (vs ~$220 in 2019); the company remains on track to exceed 1,500 stores by end‑2028.
Robust Top-Line Performance
Total sales grew 14% in Q1 and comp store sales increased 6% (well above guidance of 2%–4%); business is 34% larger than three years ago (cumulative).
Operating and Gross Margin Improvement
Q1 operating (adjusted EBIT) margin expanded 20 basis points to 6.3% (20 bps higher YoY), and gross margin rate rose to 44.1%, up 30 basis points driven by +20 bps merchandise margin and -10 bps freight.
Supply Chain Productivity and Allocation Wins
Product sourcing costs were $216M vs $197M prior year and decreased ~30 bps as a percentage of sales; company cited stronger supply chain productivity and upgraded allocation/localization capabilities that improved warm-weather category performance.
Raised Full-Year Guidance
FY2026 outlook was raised: total sales now expected +9% to +11% (up from 8%–10% prior), comp sales +2% to +4%, adjusted EPS guidance increased to $11.45–$11.80 (implying +13% to +16% YoY) and adjusted EBIT margin expected to expand 10–30 bps.
Confident Q2 Guidance with Strong EPS Leverage
Q2 guidance: comp sales +1% to +3%, total sales +10% to +12%; operating margin expansion guided +30 to +60 bps versus last year and adjusted EPS $2.05–$2.20 (implying ~19%–28% EPS growth vs Q2 FY25 of $1.72).
Aggressive Store Growth and Productivity Gains
Opened 40 gross new stores in Q1 (net +30), ending the quarter with 1,242 stores; full-year plan increased to 135 gross / 115 net new stores (vs prior 110 net). Sales per selling square foot rose from ~$220 in 2019 to ~$350 today (+55%), with downsizes reducing occupancy by ~200 bps on average.
Strong Liquidity and Capital Actions
Ending Q1 liquidity approximately $1.7B ($747M cash, $942M ABL available) with no outstanding borrowings; repurchased $81M of common stock in Q1 and $111M of 2027 convertible notes (outstanding 2027 convert reduced to $186M).
Inventory Quality Improvements
Comparable store inventories increased 11% YoY, but reserve inventory improved to 41% of total inventory from 48% last year, indicating better merchandise quality and value in reserve.
Store Experience 2.0 and Merchandise Elevation
Store Experience 2.0 retrofits continue with positive customer feedback and sales lift; elevation strategy increased mix of better brands while also expanding merchant margin, enhancing average basket and perceived value.
Operator
Good morning, and thank you for standing by. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the Burlington Stores Fiscal 2026 First Quarter Operating Results. [Operator Instructions] I would now like to turn the conference over to David Glick, Group Senior Vice President, Investor Relations and Treasurer for Burlington Stores. Please go ahead.
David Glick
Thank you, operator, and good morning, everyone. We appreciate everyone's participation in today's conference call to discuss Burlington's fiscal 2026 first quarter operating results. Our presenters today are Michael O'Sullivan, our Chief Executive Officer; and Kristin Wolfe, our EVP and Chief Financial Officer. Before I turn the call over to Michael, I would like to inform listeners that this call may not be transcribed, recorded or broadcast without our expressed permission. A replay of the call will be available until June 4, 2026. We take no responsibility for inaccuracies that may appear in transcripts of this call by third parties. Our remarks and the Q&A that follows are copyrighted today by Burlington Stores. Remarks made on this call concerning future expectations, events, strategies, objectives, trends or projected financial results are subject to certain risks and uncertainties.
Actual results may differ materially from those that are projected in such forward-looking statements. Such risks and uncertainties include those that are described in the company's 10-K and in our filings with the SEC, all of which are expressly incorporated herein by reference. Plea...
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