Burlington Posts Strong Q2 Earnings, Net Income Jumps 28%

TL;DR

**Burlington's crushing it with nearly 30% net income growth, making it a solid bet in the off-price retail game.**

AI Summary

Burlington Stores, Inc. (BURL) reported a strong financial performance for the three and six months ended August 2, 2025. Net sales increased by 9.7% to $2.701 billion for the three-month period, up from $2.461 billion in the prior year, and rose by 8.0% to $5.201 billion for the six-month period, compared to $4.818 billion in 2024. Net income saw a significant jump, increasing by 27.7% to $94.185 million for the three months, up from $73.760 million, and by 28.1% to $195.018 million for the six months, compared to $152.274 million. Diluted EPS also improved, reaching $1.47 for the three months and $3.05 for the six months, up from $1.15 and $2.37, respectively. The company's total assets grew to $9.309 billion as of August 2, 2025, from $7.821 billion a year prior, driven by increases in property and equipment and operating lease assets. Cash and cash equivalents, however, decreased to $747.619 million from $994.698 million at the beginning of the fiscal year, primarily due to substantial cash paid for property and equipment totaling $589.241 million. The company also engaged in significant financing activities, including proceeds from a Term Loan Facility of $495.000 million and treasury share repurchases of $154.883 million.

Why It Matters

Burlington's robust sales and net income growth signal strong consumer demand for off-price retail, indicating resilience in a competitive market dominated by players like TJX Companies and Ross Stores. For investors, the 28.1% increase in six-month net income and improved diluted EPS suggest effective operational strategies and potential for continued shareholder value creation, despite a decrease in cash. Employees may see positive implications for job security and growth as the company continues to expand its store footprint, with 1,138 retail stores currently operated. Customers benefit from the company's value-priced apparel and home goods, reinforcing its market position. The broader market can view this as a positive indicator for the discount retail sector, especially amidst inflationary pressures.

Risk Assessment

Risk Level: medium — The company's cash and cash equivalents decreased by $247.079 million during the six months ended August 2, 2025, primarily due to $589.241 million in cash paid for property and equipment. This aggressive capital expenditure, while aimed at growth, could strain liquidity if not managed effectively, especially given the $2.019 billion in long-term debt. Additionally, the company reported an accumulated other comprehensive loss of $25.678 million for the six months, largely due to unrealized losses on interest rate derivative contracts, indicating exposure to interest rate volatility.

Analyst Insight

Investors should monitor Burlington's capital expenditure efficiency and debt management closely. While growth is evident, the significant cash outflow for property and equipment and increased long-term debt warrant attention. Consider the company's ability to generate sufficient free cash flow to support its expansion and manage its debt obligations effectively in future quarters.

Financial Highlights

revenue

$2.701B

total Assets

$9.309B

total Debt

$2.019B

net Income

$94.185M

eps

$1.47

cash Position

$747.619M

revenue Growth

+9.7%

Key Numbers

• $2.701B — Net Sales (3 months) (Increased 9.7% from $2.461B in prior year)
• $94.185M — Net Income (3 months) (Increased 27.7% from $73.760M in prior year)
• $5.201B — Net Sales (6 months) (Increased 8.0% from $4.818B in prior year)
• $195.018M — Net Income (6 months) (Increased 28.1% from $152.274M in prior year)
• $1.47 — Diluted EPS (3 months) (Increased from $1.15 in prior year)
• $3.05 — Diluted EPS (6 months) (Increased from $2.37 in prior year)
• $747.619M — Cash and Cash Equivalents (Decreased from $994.698M at February 1, 2025)
• $589.241M — Cash Paid for Property and Equipment (Significant investing activity for six months ended August 2, 2025)
• $2.019B — Long Term Debt (Increased from $1.539B at February 1, 2025)
• 1,138 — Retail Stores (Number of stores operated as of August 2, 2025)

Key Players & Entities

• Burlington Stores, Inc. (company) — registrant
• BURL (company) — trading symbol
• New York Stock Exchange (regulator) — exchange where common stock is registered
• Burlington Coat Factory Warehouse Corporation (company) — indirect subsidiary operating retail stores
• Chief Executive Officer (person) — Chief Operating Decision Maker (CODM)
• $2.701 billion (dollar_amount) — net sales for three months ended August 2, 2025
• $94.185 million (dollar_amount) — net income for three months ended August 2, 2025
• $5.201 billion (dollar_amount) — net sales for six months ended August 2, 2025
• $195.018 million (dollar_amount) — net income for six months ended August 2, 2025
• $589.241 million (dollar_amount) — cash paid for property and equipment during six months ended August 2, 2025

FAQ

Risk Factors

• Competition and Market Saturation [high — market]: The company operates in a highly competitive off-price retail market. Increased competition from other off-price retailers, traditional retailers, and e-commerce platforms could adversely affect sales and profitability. The company's ability to maintain its value proposition and differentiate itself is crucial.
• Supply Chain Disruptions [high — operational]: Disruptions in the global supply chain, including port congestion, transportation delays, and labor shortages, can impact the availability and cost of merchandise. This could lead to lower sales and increased operating expenses, as seen in the significant investment in property and equipment to support operations.
• Interest Rate Fluctuations [medium — financial]: The company's financial condition is subject to interest rate risk, particularly with its significant debt obligations, including the new Term Loan Facility of $495.000 million. Rising interest rates could increase the cost of servicing this debt, impacting net income.
• Inventory Management [medium — operational]: Effective inventory management is critical for an off-price retailer. Failure to accurately forecast demand, manage inventory levels, and dispose of aged inventory could lead to markdowns and reduced profitability.
• Compliance with Laws and Regulations [medium — regulatory]: The company must comply with various federal, state, and local laws and regulations related to its operations, including those concerning employment, advertising, and product safety. Non-compliance could result in fines, penalties, and reputational damage.
• Economic Downturns [medium — market]: A significant downturn in the general economy, including reduced consumer spending and confidence, could negatively impact the company's sales and profitability. While off-price retailers may be more resilient, prolonged economic weakness poses a risk.
• Cybersecurity and Data Breaches [medium — operational]: The company's reliance on technology and the collection of customer data expose it to risks associated with cybersecurity threats and data breaches. Such incidents could lead to financial losses, reputational damage, and legal liabilities.
• Liquidity and Access to Capital [medium — financial]: While the company has access to a Term Loan Facility, a significant decrease in cash and cash equivalents to $747.619 million, coupled with substantial capital expenditures of $589.241 million, necessitates careful management of liquidity and ongoing access to financing.

Industry Context

Burlington operates within the highly competitive off-price retail sector, which has seen significant growth driven by value-conscious consumers. Key competitors include TJX Companies (TJ Maxx, Marshalls) and Ross Stores. The industry is characterized by its ability to source branded merchandise at discounts, requiring sophisticated inventory management and supply chain capabilities.

Regulatory Implications

Burlington must adhere to various consumer protection laws, including those related to pricing, advertising, and product safety. Compliance with financial reporting standards (GAAP) is also critical, as evidenced by the detailed disclosures in the 10-Q. Potential regulatory shifts impacting retail operations or e-commerce could pose future challenges.

What Investors Should Do

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Key Dates

• 2025-08-02: End of Second Quarter Fiscal Year 2025 — Reporting period for the 10-Q, showing strong net sales growth of 9.7% and net income increase of 27.7%.
• 2025-02-01: Beginning of Fiscal Year 2025 — Baseline for comparison of cash and cash equivalents, which decreased to $747.619 million from $994.698 million.
• 2024-08-03: End of Second Quarter Fiscal Year 2024 — Prior year comparable period for net sales and net income, showing significant year-over-year improvements.

Glossary

Off-Price Retailer

A retailer that sells branded merchandise at significantly lower prices than traditional retail stores. (This is Burlington's core business model, influencing its sourcing, pricing, and marketing strategies.)

Diluted Earnings Per Share (EPS)

A measure of a company's profit allocated to each outstanding share of common stock, assuming all convertible securities and stock options were exercised. (Indicates profitability on a per-share basis, showing an increase to $1.47 for the three months and $3.05 for the six months.)

Operating Lease Assets

Assets recognized under accounting standards for leases where the company is the lessee, representing the right to use an asset over the lease term. (Contributed to the increase in total assets to $9.309 billion.)

Treasury Share Repurchases

The act of a company buying back its own shares from the open market, which are then held as treasury stock. (Indicates a capital allocation strategy, with $154.883 million spent on repurchases, potentially boosting EPS.)

Term Loan Facility

A type of loan provided by a financial institution, typically for a fixed amount and repaid over a set period with a defined repayment schedule. (Burlington secured $495.000 million, impacting its debt structure and liquidity.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Burlington Stores, Inc. has demonstrated robust growth. Net sales for the three months ended August 2, 2025, increased by 9.7% to $2.701 billion, and net income surged by 27.7% to $94.185 million, with diluted EPS rising to $1.47. Total assets have grown to $9.309 billion, driven by investments in property and equipment and operating lease assets. However, cash and cash equivalents have decreased, reflecting significant capital expenditures and financing activities, including new debt issuance.

Filing Documents

• burl-20250802.htm (10-Q) — 2798KB
• burl-ex31_1.htm (EX-31.1) — 13KB
• burl-ex31_2.htm (EX-31.2) — 13KB
• burl-ex32_1.htm (EX-32.1) — 8KB
• burl-ex32_2.htm (EX-32.2) — 8KB
• img212704907_0.jpg (GRAPHIC) — 24KB
• 0001579298-25-000010.txt ( ) — 13178KB
• burl-20250802.xsd (EX-101.SCH) — 1409KB
• burl-20250802_htm.xml (XML) — 3276KB

—Financial Information

Part I—Financial Information 3

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3 Condensed Consolidated Statements of Income - Three and Six Months Ended August 2, 2025 and August 3, 2024 3 Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended August 2, 2025 and August 3, 2024 4 Condensed Consolidated Balance Sheets – August 2, 2025, February 1, 2025 and August 3, 2024 5 Condensed Consolidated Statements of Cash Flows – Six Months Ended August 2, 2025 and August 3, 2024 6 Notes to Condensed Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 35

Controls and Procedures

Item 4. Controls and Procedures 36

—Other Information

Part II—Other Information 36

Legal Proceedings

Item 1. Legal Proceedings 36

Risk Factors

Item 1A. Risk Factors 36

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 38

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 38

Other Information

Item 5. Other Information 39

Exhibits

Item 6. Exhibits 39

SIGNATURES

SIGNATURES 41 2

FINANCI AL INFORMATION

PART I. FINANCI AL INFORMATION

Financ ial Statements

Item 1. Financ ial Statements BURLINGTON STORES, INC. CONDENSED CONSOLIDATED S TATEMENTS OF INCOME (Unaudited) (All amounts in thousands, except per share data) Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2025 2024 2025 2024 REVENUES: Net sales $ 2,701,026 $ 2,461,193 $ 5,201,101 $ 4,818,510 Other revenue 4,045 4,324 7,991 8,560 Total revenue 2,705,071 2,465,517 5,209,092 4,827,070 COSTS AND EXPENSES: Cost of sales 1,519,629 1,408,120 2,924,720 2,738,846 Selling, general and administrative expenses 949,931 863,981 1,817,989 1,689,207 Costs related to debt amendments — — 112 — Depreciation and amortization 94,810 86,659 186,593 168,624 Impairment charges - long-lived assets 1,580 — 2,095 8,210 Other income - net ( 5,630 ) ( 9,492 ) ( 15,850 ) ( 20,354 ) Interest expense 17,427 16,582 33,237 33,231 Total costs and expenses 2,577,747 2,365,850 4,948,896 4,617,764 Income before income tax expense 127,324 99,667 260,196 209,306 Income tax expense 33,139 25,907 65,178 57,032 Net income $ 94,185 $ 73,760 $ 195,018 $ 152,274 Net income per common share: Common stock - basic $ 1.49 $ 1.16 $ 3.09 $ 2.39 Common stock - diluted $ 1.47 $ 1.15 $ 3.05 $ 2.37 Weighted average number of common shares: Common stock - basic 63,061 63,734 63,075 63,803 Common stock - diluted 63,893 64,328 63,966 64,284 See Notes to Condensed Consolidated Financial Statements. 3 BURLINGTON STORES, INC. CONDENSED CONSOLIDATED STATEM ENTS OF COMPREHENSIVE INCOME (Unaudited) (All amounts in thousands) Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2025 2024 2025 2024 Net income $ 94,185 $ 73,760 $ 195,018 $ 152,274 Other comprehensive loss, net