Burlington's Q3 Net Income Jumps 15.6% on Strong Sales Growth

TL;DR

**Burlington's Q3 numbers are solid, but their aggressive spending and rising debt could be a red flag for future cash flow.**

AI Summary

Burlington Stores, Inc. reported a robust financial performance for the three and nine months ended November 1, 2025. Net sales for the three-month period increased by 7.1% to $2.706 billion from $2.526 billion in the prior year, contributing to a total revenue of $2.710 billion. Net income for the quarter rose significantly by 15.6% to $104.750 million, up from $90.597 million in the same period last year. For the nine-month period, net sales grew to $7.907 billion from $7.344 billion, an increase of 7.7%, and net income surged by 23.4% to $299.767 million from $242.871 million. The company's diluted EPS for the nine months ended November 1, 2025, was $4.68, compared to $3.77 in the prior year. Key business changes include a substantial increase in merchandise inventories to $1.658 billion from $1.440 billion year-over-year, and a significant rise in cash paid for property and equipment to $842.195 million from $527.065 million, indicating aggressive capital expenditure. Long-term debt also increased to $2.015 billion from $1.542 billion. Risks include increased interest expense, which rose to $19.154 million for the quarter, and a decrease in cash and cash equivalents by $410.619 million for the nine-month period. The strategic outlook appears to involve continued investment in property and equipment, potentially for new store openings or renovations, and managing debt levels.

Why It Matters

Burlington's strong Q3 performance, with a 15.6% increase in net income and 7.1% rise in net sales, signals healthy consumer demand for off-price retail, a positive indicator for the broader retail sector. For investors, the diluted EPS growth to $4.68 for the nine months demonstrates effective operational management and potential for continued shareholder value. The significant capital expenditure of $842.195 million on property and equipment suggests aggressive expansion or modernization, which could intensify competition with rivals like TJX Companies and Ross Stores. Employees may see increased job security and opportunities as the company invests in growth, while customers benefit from potentially more accessible stores and continued value offerings. However, the substantial increase in long-term debt and decrease in cash warrant careful monitoring.

Risk Assessment

Risk Level: medium — The risk level is medium due to a significant decrease in cash and cash equivalents by $410.619 million for the nine months ended November 1, 2025, coupled with a substantial increase in long-term debt to $2.015 billion from $1.542 billion as of November 2, 2024. This aggressive capital expenditure, with cash paid for property and equipment rising to $842.195 million, could strain liquidity if not managed effectively, despite strong revenue growth.

Analyst Insight

Investors should closely monitor Burlington's cash flow and debt management in upcoming quarters. While revenue and net income growth are positive, the substantial increase in capital expenditures and long-term debt, alongside a decrease in cash, suggests a high-growth, high-investment strategy that carries elevated financial risk. Consider if the growth justifies the increased leverage.

Financial Highlights

revenue

$2.710B

total Debt

$2.015B

net Income

$104.750M

eps

$4.68

cash Position

$584.079M

revenue Growth

+7.1%

Key Numbers

• $2.706B — Net Sales (Q3 2025) (Increased 7.1% from $2.526 billion in Q3 2024)
• $104.750M — Net Income (Q3 2025) (Increased 15.6% from $90.597 million in Q3 2024)
• $7.907B — Net Sales (YTD 2025) (Increased 7.7% from $7.344 billion in YTD 2024)
• $299.767M — Net Income (YTD 2025) (Increased 23.4% from $242.871 million in YTD 2024)
• $4.68 — Diluted EPS (YTD 2025) (Increased from $3.77 in YTD 2024)
• $1.658B — Merchandise Inventories (Increased from $1.440 billion as of November 2, 2024)
• $842.195M — Cash Paid for Property & Equipment (YTD 2025) (Increased from $527.065 million in YTD 2024)
• $2.015B — Long Term Debt (Increased from $1.542 billion as of November 2, 2024)
• $584.079M — Cash and Cash Equivalents (Decreased from $857.800 million as of November 2, 2024)
• 1,211 — Retail Stores (Number of stores operated as of November 1, 2025)

Key Players & Entities

• Burlington Stores, Inc. (company) — registrant
• New York Stock Exchange (regulator) — exchange where BURL common stock is registered
• Burlington Coat Factory Warehouse Corporation (company) — indirect subsidiary operating retail stores
• Chief Executive Officer (person) — Chief Operating Decision Maker (CODM)
• FASB (regulator) — issued new accounting standards
• TJX Companies (company) — competitor
• Ross Stores (company) — competitor
• $2.706 billion (dollar_amount) — net sales for three months ended November 1, 2025
• $104.750 million (dollar_amount) — net income for three months ended November 1, 2025
• $842.195 million (dollar_amount) — cash paid for property and equipment for nine months ended November 1, 2025

FAQ

Risk Factors

• Increased Debt Burden [medium — financial]: Long-term debt has risen to $2.015 billion from $1.542 billion. This increase, coupled with a rise in interest expense to $19.154 million for the quarter, could strain profitability and financial flexibility.
• Inventory Management Challenges [medium — operational]: Merchandise inventories have significantly increased to $1.658 billion from $1.440 billion. A substantial increase in inventory levels, if not managed effectively, could lead to increased holding costs, markdowns, and potential obsolescence.
• Declining Cash Reserves [medium — financial]: Cash and cash equivalents have decreased by $410.619 million for the nine-month period, falling to $584.079 million from $857.800 million. This reduction in liquidity could impact the company's ability to meet short-term obligations or fund unexpected expenses.
• Aggressive Capital Expenditures [medium — operational]: Cash paid for property and equipment has surged to $842.195 million from $527.065 million. While indicative of investment in growth, such high capital expenditure could strain cash flow if returns do not materialize as expected.

Industry Context

Burlington Stores operates in the highly competitive off-price retail sector. This segment is characterized by a focus on value and a treasure-hunt shopping experience, differentiating it from traditional department stores and specialty retailers. Key industry trends include the ongoing shift to e-commerce, the need for efficient supply chain management, and the ability to adapt to changing consumer spending habits.

Regulatory Implications

As a publicly traded company, Burlington Stores is subject to SEC regulations and accounting standards (GAAP). Compliance with these regulations is crucial for maintaining investor confidence and avoiding penalties. The company must ensure accurate and timely financial reporting, as well as adherence to disclosure requirements.

What Investors Should Do

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Key Dates

• 2025-11-01: End of third quarter and nine-month period — Reporting period for the financial results, showing sales growth and increased net income.
• 2024-11-02: Prior year comparable period end — Benchmark for year-over-year comparisons of sales, income, and balance sheet items.

Glossary

Diluted EPS

Earnings per share calculated using the weighted average number of outstanding common shares, including the dilutive effect of stock options and convertible securities. (Indicates the company's profitability on a per-share basis, reflecting the impact of all potential shares.)

Merchandise Inventories

The cost of goods that a retailer has on hand and intends to sell. (A significant asset for a retailer, its level impacts working capital, potential for sales, and risk of obsolescence or markdowns.)

Capital Expenditures

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, and equipment. (Indicates investment in future growth, store expansion, or operational improvements.)

Cash and Cash Equivalents

Includes cash on hand, bank deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash. (Represents the company's immediate liquidity and ability to meet short-term obligations.)

Year-Over-Year Comparison

Burlington Stores has demonstrated strong top-line growth, with net sales increasing by 7.1% to $2.706 billion in Q3 2025 and 7.7% year-to-date to $7.907 billion. Net income also saw robust growth, up 15.6% for the quarter and 23.4% year-to-date, leading to a higher diluted EPS of $4.68. However, this growth is accompanied by significant increases in merchandise inventories ($1.658B vs $1.440B) and long-term debt ($2.015B vs $1.542B), alongside a notable decrease in cash and cash equivalents ($584.079M vs $857.800M), indicating a more leveraged and potentially riskier financial position despite improved profitability.

Filing Documents

• burl-20251101.htm (10-Q) — 3072KB
• 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
• img212727970_0.jpg (GRAPHIC) — 24KB
• 0001193125-25-297249.txt ( ) — 14450KB
• burl-20251101.xsd (EX-101.SCH) — 1413KB
• burl-20251101_htm.xml (XML) — 3802KB

—Financial Information

Part I—Financial Information 3

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3 Condensed Consolidated Statements of Income - Three and Nine Months Ended November 1, 2025 and November 2, 2024 3 Condensed Consolidated Statements of Comprehensive Income – Three and Nine Months Ended November 1, 2025 and November 2, 2024 4 Condensed Consolidated Balance Sheets – November 1, 2025, February 1, 2025 and November 2, 2024 5 Condensed Consolidated Statements of Cash Flows – Nine Months Ended November 1, 2025 and November 2, 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 36

Controls and Procedures

Item 4. Controls and Procedures 37

—Other Information

Part II—Other Information 37

Legal Proceedings

Item 1. Legal Proceedings 37

Risk Factors

Item 1A. Risk Factors 37

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 39

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 39

Other Information

Item 5. Other Information 39

Exhibits

Item 6. Exhibits 40

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 Nine Months Ended November 1, November 2, November 1, November 2, 2025 2024 2025 2024 REVENUES: Net sales $ 2,706,003 $ 2,526,174 $ 7,907,104 $ 7,344,685 Other revenue 4,437 4,522 12,427 13,081 Total revenue 2,710,440 2,530,696 7,919,531 7,357,766 COSTS AND EXPENSES: Cost of sales 1,509,853 1,418,143 4,434,573 4,156,989 Selling, general and administrative expenses 947,518 893,092 2,765,507 2,582,299 Costs related to debt amendments — 4,553 112 4,553 Depreciation and amortization 99,283 87,470 285,876 256,094 Impairment charges - long-lived assets 3,786 3,044 5,881 11,254 Other income - net ( 2,309 ) ( 5,874 ) ( 9,326 ) ( 12,028 ) Loss on extinguishment of debt — 1,412 — 1,412 Interest income ( 4,904 ) ( 6,951 ) ( 13,737 ) ( 21,151 ) Interest expense 19,154 17,769 52,391 51,000 Total costs and expenses 2,572,381 2,412,658 7,521,277 7,030,422 Income before income tax expense 138,059 118,038 398,254 327,344 Income tax expense 33,309 27,441 98,487 84,473 Net income $ 104,750 $ 90,597 $ 299,767 $ 242,871 Net income per common share: Common stock - basic $ 1.66 $ 1.43 $ 4.75 $ 3.81 Common stock - diluted $ 1.63 $ 1.40 $ 4.68 $ 3.77 Weighted average number of common shares: Common stock - basic 62,982 63,563 63,044 63,723 Common stock - diluted 64,068 64,619 64,027 64,395 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 Nine Months Ended November 1,