Burlington Stores, Inc. reported earnings rose 19.9 percent on an adjusted basis in the fourth quarter ended January 31 on a 4 percent comp gain, exceeding guidance. The off-pricer expects comps in the current year to climb in the range of 1 percent to 3 percent.

Comparable store sales in the fourth quarter increased 4 percent compared with guidance in the range of flat to 2 percent growth. Adjusted EPS was $4.99 compared to guidance in the range of $4.50 to $4.70.

Michael O’Sullivan, CEO, stated, “We are very pleased with our strong performance in the fourth quarter. Comparable store sales increased 4 percent, on top of a robust 6 percent increase the prior year. This represents a very strong 10 percent two-year comp stack. Adjusted EBIT margin was 100 basis points higher than last year, and 50 basis points above the high end of our expectations. This sales and margin performance drove 21 percent earnings per share growth. This was a very strong performance in our largest quarter of the year.”

O’Sullivan went on, “Looking back on 2025 as a whole, total sales increased 9 percent on top of an 11 percent increase the prior year, and comparable store sales increased 2 percent on top of 4 percent last year. When tariffs were introduced in April, we took actions to offset the negative margin impact of tariffs. These actions were spectacularly successful in driving earnings. Despite tariffs, adjusted EBIT margin increased 80 basis points, resulting in 22 percent earnings per share growth.”

O’Sullivan concluded, “We are feeling bullish about our prospects in Fiscal 2026. There are external and internal factors that are driving this optimism. Our full year comp guidance of 1 percent to 3 percent growth is now slightly ahead of our typical model, reflecting our optimism. In fact, we think that there may be potential upside to our expectations, and we have positioned the business to aggressively chase sales.”

Fiscal 2025 Fourth Quarter Operating Results
Total sales increased 11 percent compared to the fourth quarter of Fiscal 2024 to $3,643 million, while comparable store sales increased 4 percent compared to the fourth quarter of Fiscal 2024.

Gross margin rate as a percentage of net sales was 43.7 percent, up from 42.9 percent in the fourth quarter of Fiscal 2024, an increase of 80 basis points. Merchandise margin expanded by 60 basis points, while freight expense improved 20 basis points.

Product sourcing costs, included in selling, general and administrative expenses (SG&A), were $232 million, compared to $217 million in the fourth quarter of Fiscal 2024, a decrease of 30 basis points as a percentage of net sales. Product sourcing costs include processing costs through our supply chain and purchasing costs.

SG&A was $1,052 million vs. $965 million in the fourth quarter of Fiscal 2024. Adjusted SG&A, excluding $8 million and $5 million of expenses, respectively, associated with bankruptcy-acquired leases, was 22.2 percent as a percentage of net sales vs. 22.6 percent in the fourth quarter of Fiscal 2024, a decrease of 40 basis points.

The effective tax rate was 25.7 percent, compared with 25.0 percent in the fourth quarter of Fiscal 2024. The adjusted effective Tax Rate was 25.7 percent, compared with 24.9 percent in the fourth quarter of Fiscal 2024.

Net income was $310 million, or $4.84 per share, compared to $261 million, or $4.02 per share, for the fourth quarter of Fiscal 2024. Adjusted Net Income was $320 million, or $4.99 per share, vs. $267 million, or $4.13 per share, for the fourth quarter of Fiscal 2024, excluding $6 million and $4 million of expenses, respectively, net of tax, associated with bankruptcy-acquired leases.

Diluted weighted average shares outstanding amounted to 64.1 million during the quarter compared with 64.8 million during the fourth quarter of Fiscal 2024.

Adjusted EBITDA was $562 million vs. $456 million in the fourth quarter of Fiscal 2024, excluding $8 million and $5 million of expenses, respectively, associated with bankruptcy-acquired leases, an increase of 150 basis points as a percentage of sales. Adjusted EBIT was $442 million vs. $364 million in the fourth quarter of Fiscal 2024, excluding $8 million and $5 million in expenses associated with bankruptcy-acquired leases, respectively, an increase of 100 basis points as a percentage of sales.

Full Year Fiscal 2025 Results
Total sales increased 9 percent compared to Fiscal 2024. Net income increased 21 percent compared to the same period in Fiscal 2024 to $610 million, or $9.51 per share, compared to $504 million, or $7.80 per share in Fiscal 2024.

Adjusted EBIT, excluding $35 million and $16 million, respectively, of expenses associated with bankruptcy-acquired leases, was $923 million vs. $761 million in Fiscal 2024, an increase of 80 basis points as a percentage of sales. Adjusted net income, excluding $26 million and $12 million, respectively, of expenses, net of tax, associated with bankruptcy-acquired leases, was $652 million vs. $540 million in Fiscal 2024. Adjusted EPS was $10.17 vs. $8.35 in Fiscal 2024, an increase of 22 percent.

Inventory
Merchandise inventories were $1,312 million vs. $1,251 million at the end of the fourth quarter of Fiscal 2024, a 5 percent increase, while comparable store inventories increased 12 percent compared to the fourth quarter of Fiscal 2024. Reserve inventory was 40 percent of total inventory at the end of the fourth quarter of Fiscal 2025 compared to 46 percent at the end of the fourth quarter of Fiscal 2024. Reserve inventory is largely composed of merchandise purchased opportunistically and sent to stores in future months or next season.

Liquidity and Debt
The company ended the fourth quarter of Fiscal 2025 with $2,159 million in liquidity, comprised of $1,233 million in unrestricted cash and $926 million in availability on its ABL facility.

The company ended the fourth quarter of Fiscal 2025 with $2,082 million in total outstanding debt, including $1,719 million on its Term Loan facility, $297 million on its Convertible Notes, and no borrowings on its ABL facility.

Common Stock Repurchases
During the fourth quarter of Fiscal 2025, the company repurchased 223,863 shares of its common stock under its share repurchase program for $59 million. As of the end of the fourth quarter of Fiscal 2025, the company had $385 million remaining on its current share repurchase program authorization.

Outlook
For Fiscal Year 2026 (the 52-week period ending January 30, 2027), the company expects:

  • Total sales to increase in the range of 8 percent to 10 percent on top of the 9 percent increase for the 52-week period ended January 31, 2026; this assumes comparable store sales will increase in the range of 1 percent to 3 percent, on top of the 2 percent increase for the 52-week period ended January 31, 2026.
  • Capital expenditures, net of landlord allowances, are expected to be approximately $875 million.
  • To open 110 net new stores, as well as a new distribution center in Savannah, GA.
  • Depreciation and amortization to be approximately $465 million.
  • Adjusted EBIT margin to increase in the range of 0 to 20 basis points versus the 52-week period ended January 31, 2026; excludes $8 million of anticipated expenses associated with bankruptcy-acquired leases in Fiscal 2026 vs. $35 million incurred in Fiscal 2025.
  • Net interest expense to be approximately $60 million.
  • An adjusted effective Tax Rate of approximately 25 percent.
  • Adjusted EPS in the range of $10.95 to $11.45, as compared to $10.17 of adjusted EPS in Fiscal 2025; excludes $6 million, net of tax, of anticipated expenses associated with bankruptcy-acquired leases in Fiscal 2026 vs. $26 million incurred in Fiscal 2025. This assumes a fully diluted share count of approximately 64 million shares.

For the First Quarter of Fiscal 2026 (the 13-week period ending May 2, 2026), the company expects:

  • Total sales are expected to increase in the range of 9 percent to 11 percent; this assumes comparable-store sales will increase in the range of 2 percent to 4 percent versus the first quarter of Fiscal 2025.
  • Adjusted EBIT margin to decrease 60 to 100 basis points versus the first quarter of Fiscal 2025; excludes approximately $6 million of anticipated expenses associated with bankruptcy-acquired leases in the first quarter of Fiscal 2026 vs. $6 million incurred in the prior period.
  • An adjusted Effective Tax Rate of approximately 19 percent; and
  • Adjusted EPS in the range of $1.60 to $1.75, as compared to $1.67 in adjusted EPS in the first quarter of Fiscal 2025; excludes $5 million, net of tax, of anticipated expenses associated with bankruptcy-acquired leases in the first quarter of Fiscal 2026 vs. $4 million incurred in the first quarter of Fiscal 2025.

Image courtesy Burlington Stores