Boston, MA 09/10/2014 (wallstreetpr) – Burlington Stores Inc (NYSE:BURL) reported sales of $1,043.6 million in second quarter results, up 8.3% as compared to 2Q2013. The comparable store sales contributed 4.7% in the total sales. The gross margin came at 38.2% as compared to 37.7% in 2Q2013. It was able to offset the rise of 40 basis points in product sourcing costs. SG&A came at 29.0% comparable to 29.7% in 2Q2013.
The lower store expenses and better control over store payroll and other SG&A resulted in a decline in SG&A expenses. Overall, it indicates as a strong quarter as at one hand Burlington posted margin expansion and on the other hand it reported expenses contraction.
The key points
Execution of off-price business model paved way for higher comparable store sales in the second quarter. The adjusted EBITDA came at $11.2 million, up 23.8% as compared to 2Q2013. Gross margin expansion, lower expenses and sales growth resulted in a 70 basis point expansion in second quarter’s adjusted EBITDA in terms of percentage of net sales. Depreciation and amortization expenses came at $34.0 million, down $0.4 million as compared to 2Q2013. Adjusted net loss came at $0.9 million as compared to $13.6 million last year. It was a sharp decline in adjusted net loss year-over-year.
Third quarter guidance
Burlington Stores Inc (NYSE:BURL) expects the net sales in the third quarter to rise by 6.4% to 7.4%. The comparable store sale is expected to grow by 3.0% to 4.0%. The adjusted net income is expected to come around $0.09 to $0.12 per diluted share. Burlington Stores Inc (NYSE:BURL) expects the next quarter to be a profitable quarter. Further Burlington has plans to start 17 new stores and close one store in the third quarter. It will result in total store count of 539 in the third quarter.
Management View
Tom Kingsbury, President and the CEO, said that Burlington Stores Inc (NYSE:BURL) is delighted to post a 4.7% rise in its comparable store sales. The gross margin expansion and operating expense leveraging resulted in a 70 basis point expansion in adjusted EBITDA. The results indicate a strong growth returning back due to the implementation of the off-price model of the company.
