• Comparable Store Sales Growth (Q4 2024): Increased by 6%, exceeding guidance of 0% to 2%.
• Total Sales Growth (Q4 2024): Increased by 10%.
• Gross Margin (Q4 2024): 42.9%, an increase of 30 basis points from the previous year.
• Adjusted EBIT Margin (Q4 2024): Expanded by 10 basis points to 11.1%.
• Adjusted Earnings Per Share (Q4 2024): $4.13, a 12% increase from the prior year.
• Total Sales Growth (Full Year 2024): Increased by 11%.
• Operating Margin Expansion (Full Year 2024): Expanded by 100 basis points.
• New Store Openings (2024): 147 new stores opened, 101 net new stores added.
• Cash and Liquidity (End of Q4 2024): $995 million in cash, $1.8 billion in total liquidity.
• Share Repurchases (Q4 2024): $61 million repurchased, $263 million remaining on authorization.
• 2025 Guidance - Total Sales Growth: Expected to be 6% to 8%.
• 2025 Guidance - Comp Store Sales Growth: Expected to be 0% to 2%.
• 2025 Guidance - Adjusted Earnings Per Share: Expected to be $8.70 to $9.30.
• Capital Expenditures (2025): Expected to be approximately $950 million.

• Warning! GuruFocus has detected 3 Warning Sign with BURL.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Burlington Stores Inc (NYSE:BURL) reported a strong 6% increase in comparable store sales for the fourth quarter, surpassing their guidance of 0% to 2%.
• The company achieved an 11% total sales growth for the full year 2024, indicating robust performance.
• Burlington Stores Inc (NYSE:BURL) expanded its operating margin by 100 basis points in 2024, exceeding initial expectations.
• The company successfully opened 101 net new stores in 2024, aligning with its long-term growth strategy.
• Burlington Stores Inc (NYSE:BURL) demonstrated effective inventory management, with comparable store inventories down 3% year-over-year, contributing to faster inventory turns.

Negative Points

• The first quarter of 2025 started weaker than expected, with sales trends impacted by unfavorable weather and delayed tax refunds.
• Burlington Stores Inc (NYSE:BURL) provided a conservative guidance for 2025, with expected comp store sales growth of only 0% to 2%.
• The company anticipates a challenging margin comparison in the first quarter of 2025, with potential EBIT margin contraction.
• Higher capital expenditures are expected in 2025 due to the purchase of distribution centers, which may impact debt levels and stock buybacks.
• The uncertain economic and geopolitical environment poses risks to consumer spending and could affect Burlington Stores Inc (NYSE:BURL)'s performance.

Q & A Highlights

Q: Could you elaborate on sales trends seen so far in the first quarter, particularly given the conservative comp guidance? A: Michael O'Sullivan, CEO, explained that the first-quarter trend started weaker than expected, consistent with other retailers. The volatility is attributed to weather and the timing of tax refunds, particularly in the Midwest and Northeast. As weather normalized and tax refunds caught up, sales trends improved. The cautious Q1 guidance reflects this initial weakness.

Q: Can you explain the drivers of margin contraction in the first quarter and the expected margin expansion throughout the year? A: Kristin Wolfe, CFO, noted that Q1 faces challenging margin comparisons due to modest merchandise margin pressure and fixed cost deleverage in supply chain. However, margin expansion is expected to improve as the year progresses, with the most significant improvement anticipated in Q4.

Q: How did trade-down shoppers versus existing customers contribute to the comp trend in 2024, especially in Q4? A: Michael O'Sullivan highlighted that both need-a-deal and want-a-deal customers contributed to growth. Stores in lower-income areas performed strongly, indicating success with need-a-deal shoppers. Additionally, moderate- and higher-income areas saw healthy growth, driven by trade-down customers.

Q: What are the implications of higher CapEx for debt levels and stock buybacks? A: David Glick, Investor Relations, explained that while CapEx increased due to DC purchases, the impact on leverage ratios is expected to be modest. The company plans to continue share repurchases at levels similar to previous years.

Q: Could you update us on off-price merchandise availability and potential impacts of tariffs? A: Michael O'Sullivan stated that off-price merchandise availability is strong, and potential tariff disruptions could create buying opportunities. The company maintains strong vendor partnerships, which have been beneficial for growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.