Burlington Stores Inc. (BURL) Down as Revenues Miss the Mark

Shares of Burlington, New Jersey, based Burlington Stores Inc. (BURL) fell on Tuesday, against the backdrop of a mixed day in stocks overall. Burlington Stores' stock closed down $ 4.54 per share, down 8.42%, to close at $49.35, on volume of 11,538,438 shares. The company disclosed that it's revenues for the fiscal first quarter ended April 30, came in below expectations. In addition, the company also reported that revenue growth in same store sales showed a sharp decline

Founded in 2013, Burlington Stores, Inc. is a holding company that operates through its wholly-owned subsidiaries Burlington Coat Factory Warehouse Corp. and Burlington Coat Factory Investments Holdings, Inc. Its outlets offer a wide selection of moderately priced, fashionable branded product in women's ready-to-wear apparel, menswear, youth apparel, baby products, footwear, accessories, home goods and coats.
The company operates 540 stores in 44 states. The company's stock trades on the NYSE.

The company reported on Tuesday morning that revenues for the first quarter came in at $1.19 billion, just shy of the revenue forecast of $1.22 billion. Nonetheless, the revenues for the quarter represent a 4.9% increase over net sales for the first quarter of the previous fiscal year.

Earnings however were in line with analysts expectations of $0.41 per share. This represents a 64% increase over the $0.25 earnings per share provided by the company for the same period one year earlier.

Meanwhile, the company announced that same-store sales growth had slowed considerably to 0.8%, down from 2.7% in the first quarter a year ago.

For the full fiscal year ahead, the company expects revenue growth in the 6% to 7% range, and same store sales to increase between 2% and 3%. Net earnings for the fiscal year are projected to come in between $2.15 and $2.25 per share.

The company also announced that pay levels for both full-time and part-time employees will be increasing to a minimum of $9 per hour. The increased minimum will apply to employees who have been with Burlington Stores for at least six months. The new minimum pay level will be implemented beginning on July 5. The company expects the wage increases to be P&L neutral, as increased operating efficiencies offset higher wages.

"We are pleased with our 64% increase in adjusted EPS which was driven by a robust gross margin expansion, said Tom Kingsbury, Burlington Stores Chairman and Chief Executive Officer. "While our comp sales were positive for the ninth consecutive quarter, we were negatively impacted by the timing of IRS tax refunds, lower markdown sales due to significantly less markdown inventory, increased store closures due to weather, and receipt flow issues in three key Easter businesses. With that said, I am optimistic about our business as comparable store sales have accelerated and we are in a great inventory position to take advantage of the many opportunities we see in the market place.

In a separate announcement, the company disclosed the initiation of a $200 million stock buyback program. The repurchase program will be funded using the Company's available cash and is expected to be carried out over the next 24 months.

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Published on Jun 10, 2015
By Kevin Mercadante

Copyrighted 2016. Content published with author's permission.

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