BURL - Earnings call transcript Q2 2025

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Operator

Hello, and welcome to Burlington Stores, Inc.

Second Quarter 2024 Earnings Webcast and Conference Call. [Operator Instructions].

You will have the opportunity to ask questions to our presenters later on during the Q&A session. [Operator Instructions]. turn President, over Treasurer to Group David like Vice Senior and now the to call Glick, I'd Investor Relations. ahead. go Please

David Glick

Thank & operating impact expenses acquisition for results. the everyone. of morning, otherwise indicated, today's certain discuss and Xnd Beyond of everyone's Bed Unless fiscal of operator, results discussion Burlington's quarter in to conference the quarter We Xnd associated XXXX XXXX leases. with our participation Bath call you, appreciate good exclude the

Chief our EVP O'Sullivan, Officer; Michael and Officer. our are today presenters Wolfe, Executive and Kristin Our Financial Chief

until would of the to may no take Before over this or permission. will transcripts I turn inaccuracies September call for transcribed, responsibility parties. available of be listeners to webcast may call call X, Michael, this XXXX. replay appear I our third in expressed call A like We that without by that recorded inform the not be

that Stores. Remarks strategies, call copyrighted certain Such and are today from statements. Actual release. fiscal today continuing the remarks on the measures in non-GAAP to financial risks the trends and goals or Burlington [indiscernible] are projected objectives, and company's future herein Reconciliations filings in SEC, discuss those are that Q&A concerning press include are projected note today which and the basis. are differ are such all discuss a with financial and in described GAAP of XX-K uncertainties. included by subject Our of XXXX for those we reference. Please materially other in we today's may incorporated are results risks forward-looking this by operations expressly measures the to expectations follows expectations, on results that made that events,

Now here's Michael.

Michael O'Sullivan

rest like your you discuss the Good David. and our Thank the would will be respond second this On you, to year. questions. everyone, to morning's happy guidance we our quarter call, for we of and Then for joining results to thank us. morning,

Okay.

QX results. our with about sales talk growth. to start total I'm Let's going

XXXX. Our on the total of compared total XX% of X% That was grew second quarter of versus QX sales top XXXX. growth in by second quarter to the sales

key X,XXX the stores we new QX, New net with ended quarter stores driver growth. a In locations. and added of this are XX

line increase comp driver other of sales on second sales for comp was top increased last of versus guidance to store of sales X% growth. X%. growth is X%. The year's the up Comp and X% This flat top quarter quarter our comp second of sales

last by profitability. move drivers on points. basis the call for X second versus quarter. let more me In In this of a Kristin details. moment, XXX our quarter, Let year's now, now But out primary operating the me to second provide margin we expanded expansion. will

increased lower margin faster XXX by driven gross our turns markdowns. basis This Firstly, was by and inventory points.

by XX leverage basis achieved we driven Secondly, chain, in progress points in supply chain faster-than-expected our supply of initiatives. efficiency

will drove ahead well second Kristin margin of growth, earnings planned our sales healthy explain, the in very As strong quarter. growth plus expansion

to like quarter few I will I total with second Now start editorialize Again, performance. moments on take would to a sales. our

last with is X sales bigger than now means happy very XX% our compound on total total sales was are we XX% ago. course, business growth year. basis, of Of growth X% years it on a top that This

the XX X new growth. In [ relocations. ]. we on fiscal for XX a that oversized plus also means track And of to stores, are uncertainty new are whole, XX new for as the this Given the owed relocated with of year we stores open XXX relocations. This net we've opened year-to-date, net pleased we volatility plus of QX, stores, and the approximately older and our couple years, net we very last XX locations

full running Keep $X comp on we in headwind mind past, comp million QX. I year. growth ahead run pleased with in about is pleased positive stores also am some stores. new new X% as that benchmark. We cannibalization stores this their at expect first open that on our were new in our our of discussed are to say to stores, in we average, the in As there sales

sales the headwind. despite comp X% second positive increase Our was in quarter this

Another point dissect I this to as X% make, growth.

see in We very continue to full-price strong selling. performance

it Our means at faster clearance driving markdowns. to merchants out ticketed that rank. value inventory focused on gate there lower initial This are the is offering and This is really of sharp turns less the price. making the

our QX. of quarter. Stepping This, back on of with our comp our QX. clearance expense in in I a was comp the execution basis positive sales Meanwhile, full double with margin down points little, was gross Our was digits X%. on XXX driver selling this price [indiscernible] pleased

a made have last our improvements business few in merchandising the and lot in years, over to of We and operations. changes

execution, making still and these have clear, full long we progress. but terms gaining are early And are in We in the of a many to off-price some innings of achieving of traction be we to programs. go good potential way

point to past that the X higher make favorable. low-income have the has of Since as living. cost our years under more it external ago, XX pressure other The things customer months, feels from over then, X core happened. is was if become the environment severe economic

manage economic back be some factors greater for lower-income I is year. the are chase. cautiously just for focus beyond our grounds across lower-income we've described demographic is somewhat before, now to business. The discussed as business value that our But is As on groups on for have helping greater ]. ready the [ uncertainty has optimism value and focus moderated, half and of provide to shoppers our playbook improved. well and spread parallel, and in This inflation pressure has the broadened compounds There shoppers. situation In

guidance for are QX maintaining X% and X% growth of comp QX. to for We

separately. Let me each comment quarter on

QX, year. of was and to in guiding third year, For the X% in ran there we comp our couple planning of sales. quarter. are reasons be comp a quarter Last cautious growth strongest This the

back-to-school discussed sales comp latter comp web. in this the before, are of have sales we trends. in driven but half and the critically first make, on half to point the Another by depend QX

a late the suppress the We will stronger, flat through October, unseasonably company is in September in known can comp as that hope but on weather out a X% QX If we will to in Coach As QX will be it. then turn to have is ] comp trend. huge growth. used our it Burlington guidance impact If comp be weather warm, trend our to [ QX our conservative. take the factory,

flat our we X% are maintaining comp QX, For also guidance. to

couple Over months, revisit may this the QX we trend monitor early fall read, Depending adjust our get plan. season. we an will on the and the read on next of and

our an off-price in November. call this is the as our to playbook then about read Again, more talk and third will on trend quarter chase. retailer, We wait,

to Kristin share our like I results on our Now more details Kristin? rest call the to would and second year. to the over for outlook quarter turn of the

Kristin Wolfe

Michael, morning, and good Thank everyone. you,

sales our start results. quarter XX% second sales Total X%, our quarter with guidance. comp Let second grew above me end well grew both and high of the

planned EBIT basis this drivers chain above points gross adjusted expanded on margin supply and The year. expansion versus XXX of last savings Our sales. leverage margin higher margin, comp were higher-than-planned

primarily expense investment XX decreasing XXXX, in the basis supply on chain of initiatives. by store quarter XX points quarter was points gross walk driven a X.X%, and me inventory was details. our had XX through million XX driven XXX XX a basis sourcing margin faster point selling, entirely points payroll. The versus QX was last due margin basis planned of This progress basis in by XX Let and strong million improvement. of second percentage basis to than $XXX to higher sales. XXX from was regular an increase second above margin adjusted versus expenses the were $XXX last in productivity XX.X%, to costs distribution the savings lower SG&A guided cost of due second center leveraged basis leverage for This turns rate continued merchandise in year. year. driven markdowns. Freight higher points, freight price generated points lower year, rates increase quarter initiatives. Adjusted by were Product as basis which points We costs last the EBIT to

Our in These range of and the results $X.XX. was of and our end well was adjusted over high last $X.XX. XX% year QX earnings $X.XX to This guidance increase per share was a above the store inventories comparable guidance $X pretax of & associated X% Bath Bed our million of up exclude the that with quarter, XXXX. Beyond approximately provided leases. At were expenses the we above the end

reserve inventory. Our total was XX% our inventory of

are We merchandise reserve. values happy of and the that very have with the we the in quality

end million repurchase XXXX. $XX common in in the million At $XXX QX, that stock. our During share remaining we we of August on expires had of the [indiscernible] repurchased quarter,

our on guidance our X% to the adjusted well XXXX. This of from XX ocean in for fourth quarter, year increasing $X.XX, increase our most and points. from year $X.XX of sales, $X.XX. earnings an This with our half our increase and guidance most now the to margin original revised EBIT year X% factors XX May. of for turn of per per fiscal of EBIT sales as to full guidance to as third approximately we are Now the store for store the [indiscernible] an year guidance year up follows: quarter original impacting to in last full the store to comparable to now adjusted guidance outlook X% fiscal for and to full margin total comp an in back XXXX. We X% to XX XXXX. performance of rates this comp full Based for up our XX for recent points for points. This quarter earnings to we $X XX translates which $X.XX our year fiscal ocean I total late well rapid to guidance share adjusted XX reflects recent sales, adjusted share the in basis is outlook the $X.XX updated Comparable full will $X.XX XXXX guidance strong up our are our margin second our range of fiscal since as XX% from sales as now from sales the to headwind guidance of to X% updated to updated Included by to sales year-to-date increase for basis expected increase and up of basis and increase increase guidance as container increase freight is balance in expect our

with third QX Bath year. do incremental to would of total we expansion growth a margin store XX% result of are XX% to quarter, translates to to to expenses we Beyond not sales XX%. any the of guiding quarter to in expect third Bed versus leases last basis sales per the flat and share increase a associated points of & plus XX $X.XX guidance up for of acquired earnings XXXX. the For X% operating up $X.XX. This We comp This from

XXrd For of of decrease quarter basis the implies increase $X.XX over points growth to plus X%, impact X%, negative in significant a flat I share a to Michael. XX margins decrease EBIT and of of store now $X.XX. range of EBIT this on XX outlook QX sales sales, fiscal earnings sales of mind and from to will Keep turn to week fourth total total points the the per to XXXX, adjusted shift earnings has in adjusted basis terms share. and back per to comp that a to X% the in call range

Michael O'Sullivan

Thank you, Kristin.

that we've discussed X this recap me key points. morning. Let

growth our sales in growth total the growth comp we with for sales XX% pleased for are sales X% the quarter. quarter, Firstly, QX,

by lower also and QX markdowns selling, higher earnings regular Secondly, progress happy These driven results. chain we on driven merchandise margin initiatives. turns faster-than-expected margins strong by our were price and supply and from are faster our very with

quarters. our flat guidance We X% the Thirdly, our then comp may will and half. If is we stronger, there trend recognize in we given be it. recent to take fourth the upside for that back maintaining are underlying trends, third the

guidance updating strong turn and Finally, earnings plan reflect With our the raising we ahead call of would like for results. year to now your second are our quarter that, questions. to I over full

Operator

over to JPMorgan. like call now I'd Boss Matthew from Instructions]. [Operator

Matthew Boss

be second to to just Michael, the maybe quarter. maybe best trends, would kick on anything term, think off, could sales the on you near nice business? And can importance to share you I as about maybe really the of how results had Or your back-to-school, speak overall a on you think, back-to-school impact to what exited quarter? great. August trends, it Congrats

Michael O'Sullivan

for business time the year. Back-to-school our of to important selling very you is Thank at this question.

categories in means they really fact, [ there Burlington, I it families In and and competitors. ] be also go include for apparel, home, campus in back-to-school opportunities. I especially would if younger within maybe juniors what helpful out company, we young are And much back-to-school its in other specific areas addition, of course, as business. footwear At also and There of include other of us. [indiscernible] the the many define back-to-school men's. a accessories with than footwear, call that we accessories should are categories, store, shoppers young and after higher where and our but index

the is relatively our So driver us. a a represent high businesses business back-to-school I've penetration that up for that just all store. listed Anyway, that to important saying adds very of

the of terms the to event In of And early really continues July timing back an and region. as through timing, September. depends starts then school on in course, early

answer I question, as pleased July. planning the for growth aside, much and and back-to-school sales based your timing the timing the I back-to-school in managing X.X, in support out would as moment were to trends part described we rest Comp on to specific that that say gotten trend a different better stronger merchandising there's very of we flows back-to-school Now our we of of that the chain closed our an for overall ago regions. Anyway, quarter sales categories of were in the with helped than receipt July. have

the things how question, On going August. your in of last are part

to in have to caution. We're said, one will solid perform soon. add our at trend. weeks we're start a I let with of me categories made down obviously, QX. But We've back-to-school well. Back-to-school continued would that say, with Our wind overall pretty this note just X.X happy point.

started solid with to unwise would out, So how start. be just that although we're off quarter extrapolate happy the it

Matthew Boss

And maybe color. then mix follow just brands to on up, initiative. your of Michael, better great That's

second this comps? a in driver Or the mix a driver think as earlier as the comp should out called better of about driver. second year? potential the Was how you to the of year So a potential increase this brands we in comp key quarter half this

Michael O'Sullivan

Yes. again, thanks Well, question, Matt. for the

an good better increasing for earlier direction seen an to And actually, accomplishes assortments. of generally brands. We've this we elevate in we've our at brands, better selling And higher to we do a opportunity year, good we believe As X points. We increase that our see on price see described better of seeing opportunity mix but we're shifting while been things. the brands now. selling mix those and more

Firstly, drive trade those traffic our down brands to themselves increased stores.

more Our looking recognizable trade down better brands. are shoppers for

the a the store It the to reinforce items, see does validate fact like, value the shopper the that you though, to brands those help Secondly, also brand and reinforces they whole provides if even off-price our if buy not specific business. proposition. a halo,

you better months, see coming see opportunity. than a this rather the an evolution said, mix this our as in a higher I don't overstate want to So in will brands of That I revolution. runs.

And point a lot. fashion really been Our important understand relative to can always us. reference vary important. our to [ breadth brands uses But that has merchants importance also value. just one their Quality, price are assess the the depending category, ] customer on and

sportswear, in important much data Juniors, very where are fashions are but in styles and critical. brands example, For less important

is very merchants manage at in good it's across critical to brands value within a are assortment last better make our good, the to lower critical assortment offer And building Better of this. to markup. price our the context brands great on best points. that. make doing to point point carry strategy. One Another It's

increase gross we pressure on margin. it the As mix, puts

hasn't call. It since changed into guidance. impact that is built Now our our last

to brands. earlier, the the our but of back Kristin gross a freight rather adjustment margin is related we mix As ocean are rates higher that small half, for mentioned making to better adjustment guidance than

Operator

Boruchow Our from Fargo. Ike comes next Wells question from

Irwin Boruchow

encouraging love operational more P&L. more chain. you up Can think improvements has quarter leverage leverage part drivers of that of these about to in types Would first have through one question peers also have X us I been specifically, of for maybe your made? technology kinds on the and of program? their your another And some some talked of see the Actually, been there. the Kristin, questions initiatives [indiscernible] then of in color supply of walk It's what automation actually [indiscernible] is Kristin. for

Kristin Wolfe

Hi, Ike.

in gains to pleased supply cost progress productivity faster-than-expected chain. by savings continue and making be we're driving the We in

to As a basis new, laid to leverage planned. savings operations, supply model new start-up we'll calls, to chain we half. And out, margin reduce we of and of we're beyond and we open. prepared X-wall shift the the have to your XX DC, improvement plays getting in supply basis faster of had last the are reduce the year the into out productivity originally this and continue number out, we've was streamline laid in leverage the our of do back time points DCs this points how supply our And second automated basis QX. modernize expect productivity our XXX in question, that steps, distribution improvements quarter call. We than year these as of chain probably to see from save a second potentially XXX but reduce remarks, expect drive chain as These driving supply the described we the an we we to shared incremental model. term, much opportunity QX center we rest with initiatives. dollars long-range On longer a points drive that harvesting that improvement part in larger, we'd we the more QX, chain receipt long-range do leveraged the of labor last DC have more And talked within ultimately little in process the despite referenced on process bit this about touches, previous in quarter's

another we these to new have have we design larger this with in X XXXX. new off-price and we much we which As much, to automation. I opportunity DCs open much these and construction, more with mentioned, an expect recently a opened And DC year, under

So and additional this long-range expand the network well. model as that not may also capacity, as shared. back But an of we longer our of legacy existing to look go into at be are baked we there DC necessarily this benefits some modernizing the opportunity again, term,

new support well. DC these a long-range to me think CapEx investments the in said follow-up So had you embedded is I for as you our And model.

Irwin Boruchow

to Yes, switch if that's freight, I okay. going was to over

I freight, will half ] think the Just What's elaborate remarks. I [ How does the be? out how that freight And prepared in headwinds, how negative ocean you ocean. still kind talked I driving and all? domestic it? lever as third you second this of about in Or And long, impact called well? impactfully guess quarter? if know domestic that can fourth you changing at freight the is

Kristin Wolfe

for Thanks Yes. a the question. question. It's very good Great.

I about higher back ocean guidance, mentioned, factored this margin. of So freight we as negatively merchandise $X.XX in in and ocean our freight half impacts

And we even freight, some to exposure some freight are at you QX favorable rates. as ocean contracted. so containers contracted rate, do since we reported increased on have spot have spot the our though the of May. And do majority we in the know, capacity significantly in market ocean But market,

hopeful freight part this difficult and on to we're ocean And the freight. is spot rates spot here, a we're course, of there second of this starting market your ocean transitory modestly. question is to point. to are domestic see turning predict. And always freight, So risks pressure But the come down

domestic negotiated been fuel slightly to favorable leverage we be hand, has as favorable rate in saw other QX rate continues rates, rate of diesel a here. source modest leverage. also the We domestic On

in see to So the back the of half on freight, to leverage that. expect modest year we on domestic continue

Operator

Lorraine question Bank comes line America. next with the of of Our from Hutchinson

Lorraine Maikis

of in your the your behavior? in of you're you in trade any terms driving callouts Is on talked about consumer? traffic what's elaborate for what that health stores. previously can terms consumer Michael, potential comp of the and other the You've seeing down

Michael O'Sullivan

of Lorraine. you the clearer. last some being on data, think I become things negative as it you. last Good our In question. call that situation time, the us felt some a positive, Good to Thank the conflicting to were At the the morning, has hard hear in in health X few they for would there the On external to our the consumer back from described read. I view, going May, trends. I on. are really lot it discretionary like spending feels situation months, and say

driving starting groups. focus ago income by from across pressure reports Firstly, uncertainty think board. much that was the Retailers And has value demographic earnings offering retailers in like best all and other felt same are and the years it the I that And direction. shoppers the and that sales. are comp spread bands lower-income X value recent feels has to that pointing on are greater other other economic driven winning

think of seeing down into that a customer our part big is we're value-conscious I what is trading So stores.

shopper customer come The is as still second have on to improved hasn't of the is thing inflation pressure on going that our see has moderated lower like away, in very it but it somewhat. gone has feels situation that the that that's income down, that We us well. may But data. low-income evidence own

chain. So our in stores very trade ago, watch for stores below the rest are are closely. our to Stores comp X trend we important of They're was them us. very that years for lower -- areas sales the -- income

have relatively a stores volume. trade in to lower-income high be of lot and tend areas, they We

well, the improved chain. running not attention. in when with line actually their So year, trend comping pay has and a lot is This we of they're

to And point up a lower income data to is at comp least So customer in suggests starting QX. that mid-single-digit us the recover.

of XXXX of into year. are and in inflation caution XXXX. consumer lot focused and also the a But factors recap value we're there more me caution. consumers of to add for my half and in XXXX other shopper, in signs that let the and with next and some seeing risks on [indiscernible] a To behavior lower that particular, could general, recap, being spike back note starting income is positive So affect in business the of our from recover

we sense be sum makes cautious. business, about a but up, to little our it feel So good to

Lorraine Maikis

follow-up my Michael, the And is question about quarter. second

into tailwinds unusual trends the to might not fall. the Just were carry curious there over any comp if that

Michael O'Sullivan

question. Yes, it's a good

to X QX. like thing I I rule probably the weather in and weather the QX June in categories violate especially was apparel that weather that sleeve in like tops, retailers year. States we'll that estimate across among their X unfavorable, strong in their in mention have would when businesses, retailers most that United I think think points of the in apparel short know be that, the comp rule that seasonal been again, cannot I seasonal temperatures to and It point and for to retailers well. I'm only us that worth And And from is benefit that ores quarter. to this swimwear. I to it's but was us. unique going would benefited retailers than to suspect clear, other must have that last say as affected performance that helped most I

your season. Apart there the other quarter. that fall was describe specific that were the weather, were might over tailwinds would about from or second no unique carry way. tailwinds that question to There that other drivers not no I or So factors to factors were

temperatures no unseasonably weather it of that be the this the possible farmers But is other almanac, [ I are fall that have than if at we course, favorable point. visibility Now to cold. will the in ] guess

Operator

comes from Cowen. with of John line Next Kernan TD question the

John Kernan

has it, a of your back on Congrats week QX? Can momentum. do through and but on QX, about guidance, margin questions margin this? and quite deterioration in profile factors of bit the it QX are first in SG&A we that margin XXrd like QX looks there's here. Kristin, an us but year-over-year. earnings year-over-year how the impact, walk improvement A gross assume I think one you in driving the half couple would

Kristin Wolfe

very outlook. thanks X that the impact John, question. you a are good I'm half primary factors our question. really back asked. for It's margin glad There

So of these. kind each I'll dissect of

QX sales growth of week new total last to, as year XXrd openings due store well alluded this you as as calendar compared very have QX the First, year. way timing the as to different plan the to and impacts

So clarify how to week, the not shift. XXrd actually but let referring calendar the extra me the I'm week.

year-over-year. So quarters last We're ahead we're the about coming week of in year. X

and adjust the and comp for there's on for for sales, this, the we quarter. we total up Now line in an sales sales But store impact week. growth, earnings

So up shift and week QX, a pick low in the week week a we high-volume means volume that gained November, in XXrd in or January. lose we

guidance So into growth total in this last fourth X%. lower quarter to versus QX resulting for total X% for to in grow the year, translates sales sales

actually shift number Now on guiding for calendar relative the total to by and XX% the this has increase. to from of quarter, boosted of we're also increased third year. openings the benefits week store year -- QX new quarter XXrd sales an the last third in

I total leverage that expansion the So QX calendar mentioned, QX. But the and in in as primary difference store and the driven by difference timing X new QX impacts shift, really growth the really quarter. unfavorably in the fourth sales the That's there I favorably said between then were and in factors.

back X The other the half. headwinds are headwinds to so for the fall,

relative X%. like plus less half see lot back below, expenses. comp First, trend benefit on less the our a have the margin And secondly, only that our not same to I margin in then from half. half ] do negative opportunity to levels to of This or to detailed we is conservative earlier in merch back this freight. gross an year-to-date that that add is a basis on means XX obviously, to headwind comp half expansion our the the of And leverage previous points this is guidance question, the provides the guidance first back first of back the year. half lastly, back then about in That ocean in freight of half the margin higher and about impact that's prepared million remarks $X the pretax. want change $X.XX the represents [ And we we flat fixed half side, expect saw clearance $X.XX we in from year. This merchandise ocean lower in

really key are QX those impacting the guidance. QX margin So factors and

John Kernan

helpful relates and model. to the it Kristin, for sheet, balance share very David That's cash as flow just the it. Got or repurchases.

share for repurchases of should But What's guidance fund in you few the balance unit the and the level the X% I'm given optimal level balance impact potential next You've CapEx to on sales assuming sheet? elevated the sheet? how about we the of be cash growth. years, think around in

David Glick

question. I'll John. the for take that, year. through for our Thanks working budget We're next still

But of consistent have So previously, And about you be of sharing to of we a CapEx opportunistic pandemic shared it's we the track we've years plan elevated of all specifics is consistent on years, at the a little buybacks. Inside goal philosophically, an record that. have through a X-year first return our X% capital with does that sales. pretty basis shared on early as doing. few to the to shareholders

as net we're mid-single-digit up in We're have this know, year. and just [indiscernible]. and of percent sales X this CapEx. plan, range X% opening as in to $XXX of lot anticipate It's kind of more then CapEx think you half We're CapEx. And the stepping we net closures this for a ballpark next still XX year, we're that of the sales. a towards reminder, should I probably next average last back year why And the a and Also, XXX. at CapEx more stores. you year year's X-year in XXXX early, of years guiding should that but As million

years. prior number gross So higher than of stores the new is

buildings. our we've X building signed referenced Xx in million a CapEx -- will DC. that the for infrastructure addition, foot We have the option for to square DC to next have in peak earlier want view In our included answer a relative and purchase existing that the in a That's Kristin that a DCs [indiscernible] this Southeast. question, lease an largest And required agreement year. strategic leasing. next control to more we as this And year year we

next and and the of mentioned the So buildings purchase year are would we've the Kristin earlier, option high-level in automated to that we've included much sort require those DCs and land capital that in DC CapEx as for also, therefore, we that Southeast. And investment. exercise for outlook assumed more larger more

levels cash kind about So that's very question. last think a flows asked leverage I We know feel had and the to ending comfortable similar and prelude few conservative that. a your our a actually years. We of long answering you liquidity liquidity, with we've similar cash ratios

to similar capital expect XXXX invest have you've in should but We pace And form like growth, kind a in to also probably to in flow of shareholders the next our only feel buybacks. that pace of year XXXX. cash you think and we the return I sufficient to not seen

Operator

the line with Brooke question Sachs. Roach from comes Goldman Next of

Brooke Roach

merchandise Michael, can by in the trends second the quarter? you you saw that to performance speak category

Michael O'Sullivan

On strength, across category the quarter. would broad-based say, Sure. I the fairly was performance,

the both Our our kind comp that, in referenced in growth chain, I that home trends strong apparel talking about was sales we Other and in than other mid-single so the out were of with digit. earlier. I call in seasonal only the weather. line that saw classifications, was overall

quarter, sales strong in in our then And accessories. saw saw strong also beauty back-to-school trends again, throughout business we in We the in and July. trends sales

Brooke Roach

on growth? Great. of the can you did geography? And a traffic Kristin, fare drivers you trends And what follow-up, by basket? did see comp regarding elaborate the then as How trends and

Kristin Wolfe

Sure. From broad-based. positively. perspective, the strength a comped or regions geographic All really regional comp was

of you comp Looking about at traffic asked higher. top-performing that transactions by both Northeast the and quarter. was drivers as driven in entirely the regions And and growth. QX were higher conversion, higher comp was Southwest the both the then the

transaction. higher per by flattish, slightly AUR, units lower Our basket offset average was slightly

Operator

Our comes from Straton of next the Morgan question line Stanley. with Alex

Alexandra Straton

one for Kristin. I've got for then Michael one

maybe for So Michael. just

And to mentioned younger retailers demo answer talked attracting I think that about you think to Burlington I peers. a shoppers. [ overindexes where have prior this in other ] compared

doing this you shopper? you can you And what can that? well about as the So tells elaborate successfully opportunity generally what talk to like as you guys attract maybe are

Michael O'Sullivan

position a always Burlington, had research. of in the customers our for and stronger And we've see that younger customer you thanks competitors. than most the families, Alex, question. with our young Yes, stronger

our We also in mix it businesses. of see

families see us. When walk So regard kind young can you core group you and into a our customer I say for stores, as we -- of it would shoppers younger and physically.

our We have men's, kids apparel, than footwear, presentation, I most again, certainly a stronger a and accessories, would greater young kids Juniors, is competitors. penetration of say, of

really they us several we growth also a Moving strength we question we us, know important granted. even going though to stretched absolutely that to families on that years. over to the need know for they as Well, are so value. for them part the your And to what do that take young and financially segment is of those shoppers young are customers. not are doing about customer We drive attract be we next

very assortment. fashion, within seen strength months. I those -- great are focused that value of we've couple back-to-campus for businesses the quality, good, on better, Our talked at a merchants prices brands a best about combination I providing great customers, of and offering also back-to-school earlier the in in last

trends we're customer with So pretty seeing that group. having about success the our we're overall, the good feel I strong about

Alexandra Straton

I'm back changed wondering, but Super on earlier and changed? lower. has that Maybe bit the on in like months takes compared by sales half helpful. maybe It EPS super back an Kristin. puts ago. has major anything Great. That's X helpful items. is a our comments view line just seems to question hasn't, little how Or probably half, the meaningfully for

and just driving trying So what's understand those to dynamics that.

Kristin Wolfe

Alex, thank you.

versus we the But thing back ocean is only half of changed last kind question headwind our to first. guidance it's reinforcing additional increase QX to. lot So drives spoke in answer versus higher quarter. that's costs fourth the quarter that and fixed the more The in really freight SG&A a worth the leverage that week sales and QX the third XXrd on in

do freight big margin changed in we guidance, is there in has in given X% continued a ocean Again, -- there. Gross depreciation in same the spring. leverage but from the a not versus to flat If P&L ago, lower half, this than has supply changed saw chain in we QX. X down slight we'll in I the deleverage QX fall what levels opportunity the clearance is And have there's probably in months comparison difference from the we spring. difficult going more with not the expect the back And more headwind. So then comp that. in some have and SG&A the back do modest half, that some just

Operator

the Next of comes Adrienne Yih line with Barclays. question from

Adrienne Yih-Tennant

well and done. nicely Really

guess going first time are everybody So comp inventories to the the my at twofold Kristin, up for -- is the congratulations quarters. at I question I'm inventory. consecutive ask, firm. team on to in, X say,

the relative of hand, guidance, So XX%. comp up are on just the X% against kind other inventory comp reconcile can total third comp for the to the the sales forward you the quarter? But guidance up

inventory. it So you're light actually little a on looks like

convertible you it? And also 'XX of of money. different for kind us accounting Kristin, of the think pieces So guess, on these help the about dilutive notes X treatment and impact Can XXXX just I with EPS? in and can the now you are then those secondly, help us

Kristin Wolfe

I start Great. with the I'll inventory. Adrienne, appreciate question.

water a bit in comp going I'm time question the versus snapshot because end muddy kind the a deceiving. bit Again, were more that your it little in comp point tied at growth. last to the of So year. a QX, you inventories -- X% even store to of up that's

that First, point. the shift changes comparison week XXrd calendar

reduces once increase comps down you it X% that in this, to increase. X% So adjust a for inventory

as were the at secondly, across I average if then And look during inventories whole, quarter on a store the of to the quarter. second across X% quarter, X% stores QX down comp

drive and readiness. So point versus trying to back-to-school for really our that were July building last really that the difference year the reason back-to-school receipts in is time average we versus

we the driver much the of seeing of kind opposed trend. We're was that a QX. So sales still saw turn -- faster in as to increase that

I'm inventory think store leaner drive David over Daniel made And progress a to term, it And to on medium the faster ]. inventories opportunity so turn. or with and more over the still opportunity we modest. there's to then pacing front, going the So that lower on much we've the far continue manage But to turn convert, to given levels. [ is

David Glick

that you Dan, why take don't one?

Unknown Executive

Adrienne, [ Dave it's Yes. ].

the the on principal that of any par sales stock. paid means accounting and in convert, method that above if-converted amount the we is and cash that So we used assume

the ] on quarter-to-quarter both XXX on and the dilution count. as reminder, And a are So perspective, the any XXXX from which XXX, strike the share strike if the is will include is XXs the [ a are. count 'XX converts money, our the in share in XXs and

your So about diluted converts quarter, the our XXX,XXX added question, to answer shares for share second count. the to

round So my out just to answer.

in point one. there any April the XXXX we'll cash. additional obviously, is premium and is pay we'll net the meaning settle, the At in which if shares So in that time, then to cover will principal $XXX share mature million issue year. next

been So consistently as we've stock. mentioned David back earlier, buying

able XXX,XXX So so. that to mean at we'd mitigate quarter, to for shares. repurchased we I potential expect you'll continue know, example, any this dilution And to do be time. about

So we the converts. than dilution the offset from more

Operator

from line Our Dana of the next question Telsey comes Group. with Telsey

Dana Telsey

are potential for Then terms been in Kristin, have how rates, I the making the seeing labor investment with for one Kristin. there see think international along the and to you the payroll you relative to expansion you've store Michael like? look and and deleverage? Nice opportunity Michael, availability results. what do about what that of wage in could

Michael O'Sullivan

Dana, question. the thank for you

has overseas a is that So international potential and in expansion, let -- everyone, application start that me the guess, loves deal on by deal. retail I of I great love every believe saying the belief off-price country, a model that in markets. huge My number everywhere

and of opportunities the it a expand opportunities. value. out So resources to shareholder I they those of the States, those expansion sense larger have footprint. They when the where And if and peers drive investments off-price competitors use United makes in those international know-how growth lot our to run and can think continued their overseas to go after overseas

at States. very makes I is have very, Burlington, we sense. But a barely boat. that are We different that So stores say, reality X,XXX in United in the would the

to Our have Xx Xx number. that peers

have still potential we to the U.S.A. So right expand huge in here

will #X us, core potential say be focus and full driving that's resources future, have us complete our potential and to U.S. maybe for the would I day, for the our resources full sense to to of international #X, and So foreseeable our now, divert opportunity. an on job and #X. One job for But the job business. it make right

Kristin Wolfe

question labor and then your wage Great. in-store payroll. as on Dana, second rates as store And in, investments well around

in wage also particularly rates, wage rate stores. meaningful but few increases in the last years, we've first DC, absorbed certainly So on over

basis. California, terms on In are located to comfortable our They wages New where and a of we for and labor in very distribution philosophy DC are. workers wages approach be Jersey market-by-market remains to competitive our and stores, competitive. has appropriate been And are we're markets with in and for centers,

in wage the also payroll, obviously select dollars, increases, terms markets, incremental on this. And results XXXX, in payroll we've recall improve We're deliberate with we build improve and wage in that cover third to investment as seen store store legislative we and scores. of of that conditions. in increases in quarter is in So those you made investment customer the how to investment levels service service a improvement address but we this and competitive may store then pleased

we'll standpoint, the lapped fully from investment financial have So in impact quarter. this a third

Operator

back to call question-and-answer That Mr. concludes the I'll you. the turn over O'Sullivan, session.

Michael O'Sullivan

you. Thank

Let We today, me XXXX to fiscal look holiday Stores. weekend. you our close by thanking please time in the interest discuss Burlington your everyone third on quarter and Thank you results. your for talking November this forward to enjoy to for again call in

Operator

Ladies and gentlemen, this concludes today's conference call.

now disconnect. You may

Burlington Stores (BURL) 29 Aug 242025 Q2 Earnings call transcript