The following is a summary of the Burlington Stores, Inc. (BURL) Q2 2024 Earnings Call Transcript:
Financial Performance:
Burlington Stores reported a 13% total sales growth in Q2 2024 compared to the same quarter last year, with comp sales growth at 5%, exceeding the forecast of flat to 2%.
Gross margin improved by 110 basis points, driven by strong regular price selling, faster inventory turns, and fewer markdowns.
Operating margin expanded by 160 basis points, supported by supply chain efficiency gains.
Earnings per share in Q2 was $1.24, marking a 98% increase year-over-year and exceeding guidance.
Business Progress:
Added 36 new stores in Q2, bringing the total to 1,057 locations.
Relocated four older, oversized stores, contributing to a total of 50 new stores and 15 relocations for the fiscal year-to-date.
On track to open 100 new stores and approximately 30 relocations for the full year.
Continued focus on merchandising and operational improvements despite recent external economic pressures.
Opportunities:
Positive consumer response to value-focused offerings, with a comp sales increase of 5% despite potential cannibalization from new store openings.
Enhanced focus on offering sharp value and improved assortment has led to less inventory reaching clearance levels, benefiting gross margin.
Adaptation to varying back-to-school dates across regions, improving seasonal sales effectiveness.
Leveraging broader demographic trends and increased focus on value shopping, particularly as economic pressures extend beyond low-income consumers.
Risks:
Planned conservative guidance for Q3 and Q4 comp growth at 0% to 2%, reflecting the uncertainty in consumer behavior and potential impacts of unseasonable weather.
Ocean freight headwinds are expected to negatively impact merchandise margins by approximately $0.10 per share in the second half of the year.
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