Burlington Stores Inc. reported that second-quarter earnings jumped 37.5 percent on an adjusted basis, as same-store sales climbed 5 percent, following a similar gain in the prior year. Results were well ahead of guidance and the off-pricer raised its outlook for the year.

The off-price U.S. retailer of branded apparel, footwear, accessories, and home merchandise, announced its second-quarter results ended August 2, 2025.

Michael O’Sullivan, CEO, stated, “We are pleased with our exceptional performance in the second quarter. Comparable store sales increased 5 percent, which was on top of 5 percent comparable store sales growth in the second quarter of last year. We also saw very strong margins and earnings performance. Adjusted EBIT margin increased 120 basis points, while adjusted EPS grew 39 percent versus the second quarter of last year. This was high-quality earnings beat driven by ahead of plan sales, higher merchandise margin, lower freight expense and leverage on SG&A expenses.”

O’Sullivan continued, “Given the strength of the second quarter, we are raising our full-year earnings guidance. As for sales, consistent with our off-price playbook, we are maintaining our previously issued guidance for 0 percent to 2 percent comp growth in the third and fourth quarters. The third quarter is off to a solid start, and as is our practice, we will manage our business conservatively and be ready to chase.”

O’Sullivan concluded, “We see a clear link between our very strong second quarter sales and earnings results and the key Burlington 2.0 strategies.  We are excited because these initiatives are in the early stages of their potential impact, which we believe will grow over time and will drive our longer-term performance.”

Fiscal 2025 Second Quarter Operating Results

  • Total sales increased 10 percent compared to the second quarter of fiscal 2024 to $2,701 million, while comparable store sales increased 5 percent compared to the second quarter of fiscal 2024. Company guidance had called for sales to increase in the range of 5 percent to 7 percent, with comparable store sales flat to up 2 percent.
  • Gross margin rate, as a percentage of net sales, was 43.7 percent compared to 42.8 percent for the second quarter of fiscal 2024, an increase of 90 basis points. Merchandise margin expanded 60 basis points, driven by lower shortage and reduced markdowns, while freight expense improved 30 basis points as a percentage of net sales.
  • Product sourcing costs, which are included in selling, general and administrative expenses (SG&A), were $209 million compared to $191 million in the second quarter of 2024. Product sourcing costs include the cost of processing goods through the company’s supply chain as well as purchasing costs.
  • SG&A was 35.2 percent, as a percentage of net sales, compared to 35.1 percent in the second quarter of fiscal 2024, increasing by 10 basis points. Adjusted SG&A, excluding $11 million and $3 million of expenses, respectively, associated with bankruptcy-acquired leases, was 26.7 percent as a percentage of net sales compared to 27.0 percent in the second quarter of fiscal 2024.
  • The effective tax rate was 26.0 percent, unchanged from the second quarter of fiscal 2024. The adjusted Effective Tax Rate was 26.0 percent compared to 26.0 percent in the second quarter of fiscal 2024.
  • Net income was $94 million, or $1.47 per share, compared to $74 million, or $1.15 per share, for the second quarter of fiscal 2024. Adjusted net income was $110 million, or $1.72 per share, compared to $80 million, or $1.24 per share, for the second quarter of fiscal 2024, excluding $8 million and $2 million of expenses, respectively, net of tax, associated with bankruptcy-acquired leases. Company guidance had called for adjusted EPS in the range of $1.20 to $1.30,
  • Diluted weighted average shares outstanding amounted to 63.9 million during the quarter, compared to 64.3 million during the second quarter of fiscal 2024.
  • Adjusted EBITDA was $257 million compared to $205 million in the second quarter of fiscal 2024, excluding $11 million and $3 million, respectively, of expenses associated with bankruptcy-acquired leases, an increase of 120 basis points as a percentage of sales. Adjusted EBIT was $162 million compared to $118 million in the second quarter of fiscal 2024, excluding $11 million and $3 million of expenses, respectively, associated with bankruptcy-acquired leases, an increase of 120 basis points as a percentage of sales.

First Six Months of Fiscal 2025 Results
Total sales increased 8 percent compared to the first six months of fiscal 2024. Net income increased 28 percent compared to the same period in fiscal 2024 to $195 million, or $3.05 per share, compared to $2.37 per share in the prior period. Adjusted EBIT, excluding $17 million and $9 million, respectively, of expenses associated with bankruptcy-acquired leases, was $314 million compared to $254 million in the first six months of fiscal 2024, an increase of 80 basis points as a percentage of sales. Adjusted Net Income, excluding $12 million and $7 million, respectively, of expenses, net of tax, associated with bankruptcy-acquired leases, was $217 million, or $3.39 per share, compared to $171 million, or $2.66 per share, for the first six months of fiscal 2024.

Inventory
Merchandise inventories were $1,415 million compared to $1,223 million at the end of the second quarter of fiscal 2024, a 16 percent increase, while comparable store inventories decreased 8 percent compared to the second quarter of fiscal 2024. Reserve inventory was 50 percent of total inventory at the end of the second quarter of fiscal 2025, compared to 41 percent at the end of the second quarter of fiscal 2024. Reserve inventory is largely composed of merchandise that is purchased opportunistically and that will be sent to stores in future months or next season.

Liquidity and Debt

  • The company ended the second quarter of fiscal 2025 with $ 1.69 billion in liquidity, comprising $748 million in unrestricted cash and $946 million in availability under its ABL facility.
  • The company ended the second quarter with $2,039 million in outstanding total debt, including $1,727 million on its Term Loan facility, $297 million in Convertible Notes, and no borrowings on its ABL facility.

Common Stock Repurchases
During the second quarter of fiscal 2025, the company repurchased 102,474 shares of its common stock under its share repurchase program for $26 million. As of the end of the second quarter of fiscal 2025, the company had $632 million remaining on its share repurchase program authorizations.

Outlook
For fiscal Year 2025 (the 52-week period ending January 31, 2026), the company now expects:

  • Total sales to increase in the range of 7 percent to 8 percent on top of the 11 percent increase for the 52-week period ended February 1, 2025, which assumes comparable store sales will increase in the range of 1 percent to 2 percent, on top of the 4 percent increase for the 52-week period ended February 1, 2025.
  • Capital expenditures, net of landlord allowances, are expected to be approximately $950 million.
  • To open approximately 100 net new stores.
  • Depreciation and amortization of approximately $385 million.
  • adjusted EBIT margin to increase in the range of 20 to 40 basis points versus the 52 weeks ended February 1, 2025; excludes $33 million of anticipated expenses associated with bankruptcy-acquired leases in fiscal 2025 and $16 million in fiscal 2024.
  • Net interest expense is expected to be approximately $50 million.
  • An adjusted Effective Tax Rate of approximately 25 percent.
  • Adjusted EPS in the range of $9.19 to $9.59, as compared to $8.35 of adjusted EPS last year, which excludes $25 million, net of tax, of anticipated expenses associated with bankruptcy-acquired leases in fiscal 2025 and $12 million in fiscal 2024. This assumes a fully diluted share count of approximately 64 million shares.

Previous guidance had called for total sales to increase in the range of 6 percent to 8 percent and adjusted EPS in the range of $8.70 to $9.30.

For the third quarter of fiscal 2025 (the 13-week period ending November 1, 2025), the company expects:

  • Total sales to increase in the range of 5 percent to 7 percent, which assumes comparable store sales will increase in the range of 0 percent to 2 percent versus the third quarter of fiscal 2024.
  • Adjusted EBIT margin to range from down 20 basis points to flat versus the third quarter of fiscal 2024, which excludes approximately $10 million of anticipated expenses associated with bankruptcy-acquired leases in the third quarter of fiscal 2025 and none in the third quarter of fiscal 2024.
  • An effective tax rate of approximately 25 percent.
  • Adjusted EPS in the range of $1.50 to $1.60, as compared to $1.55 in adjusted EPS last year, which excludes $7 million of anticipated expenses, net of tax, associated with bankruptcy-acquired leases in the third quarter of fiscal 2025 and none in the third quarter of fiscal 2024.

Image courtesy Burlington