Burlington Stores, Inc. BURL has leveraged its expansion and value-driven model to deliver outstanding results. By prioritizing customer value, enhancing supply-chain performance and expanding reach, BURL has solidified its position as a leading off-price retailer and set a strong foundation for sustained growth.
The company’s solid sales growth in the second quarter of 2024, fueled by an aggressive store expansion strategy, strong comparable sales and operational efficiencies, sets a foundation for ongoing success. Improved inventory management has enhanced profitability. The company’s updated fiscal 2024 guidance reflects confidence in its sustained strong performance, with anticipated gains in margins and earnings.
BURL’s Expanding Store Footprint
Burlington showcased a robust performance in the second quarter of fiscal 2024, reflecting successes that drove its sales and profitability beyond expectations. Total sales saw 13% year-over-year growth, fueled by the expansion of stores and positive comparable store sales, which rose 5%.
The company added 36 stores in second quarter, ending the quarter with 1,057 locations, part of its ambitious plan to reach 100 new stores by the end of the fiscal year. Burlington’s expansion demonstrates its commitment to capturing a larger share of the growing value-oriented retail market, positioning it as a go-to destination for budget-conscious shoppers.
Burlington’s Strategic Pricing & Inventory Management
BURL’s profitability has been equally impressive. Operating margins improved by 160 basis points year over year, driven by strong inventory management and higher full-price sales, which reduced the need for markdowns. The company’s gross margin expanded by 110 basis points due to improved inventory turnover and effective merchandising strategies.
Notably, Burlington has focused on delivering strong value at initial price points, attracting customers with high-quality offerings that align with their expectations, ultimately reducing the need for clearance. This strategy not only enhances profitability but also reinforces the company’s reputation as a value-driven retailer with a competitive edge.
BURL’s Growth Prospectus for FY24
Burlington, which shares space with Skechers SKX, Steven Madden, Ltd. SHOO and Abercrombie ANF, updated its fiscal 2024 guidance, signaling stronger results. Total sales are expected to rise 9-10%, up from the previously mentioned 8-10%. Comparable store sales are projected to grow 2-3%, an improvement from the earlier stated 0-2%.
The adjusted operating margin is forecast to increase 50-70 basis points, higher than the prior stated 40-60 basis points. Adjusted earnings per share are expected to be $7.66-$7.96, up from the previously stated $7.35-$7.75.
For the third quarter, Burlington anticipates a total sales increase of 10-12%, with comparable sales growth of 0-2% and an adjusted EBIT margin improvement of 60-80 basis points. In the fourth quarter, comparable sales are forecast to be flat or rise to 2%, with total sales growth expected to be 5-7%.
Synopsis of SKX, SHOO & ANF
Skechers is focused on expanding its direct-to-consumer segment and growing international sales. The company plans to invest in store openings and enhance omnichannel capabilities. These initiatives align with its long-term strategy to improve operational efficiency and expand customer reach.
For fiscal 2024, Skechers expects sales between $8.93 billion and $8.98 billion, suggesting an increase from the $8 billion reported in fiscal 2023. It anticipates earnings per share between $4.20 and $4.25, indicating a rise from the $3.49 recorded in fiscal 2023.
Steven Madden’s recovery in the U.S. wholesale footwear business signals a positive shift toward normalized inventory levels and renewed growth with key retail partners. This recovery underscores the brand’s strength in its primary market and highlights its ability to overcome past challenges. With this improvement, the company is well-positioned for sustainable growth in its core business. Steven Madden’s solid business framework enables it to capitalize on market opportunities and enhance stakeholder value.
For 2024, SHOO expects revenue growth of 11-13% from that reported in 2023, with adjusted earnings projected at $2.55-$2.65 per share, implying growth from the $2.30 recorded in 2023.
Abercrombie is on track to achieve its 2024 target of demonstrating sustainable, profitable growth. The company expects to continue benefiting from strength in its brands, driven by its focus on delivering high-quality, on-trend assortments for new and retained customers across regions and brands. It has also been focused on making investments across stores, digital and technology, which are slated to aid the company in the long term.
Backed by the strong first-half fiscal 2024 results, Abercrombie raised its sales and operating margin views for fiscal 2024. It anticipates net sales for fiscal 2024 to increase 12-13% from the $4.3 billion reported in the prior year. It earlier expected net sales growth of 10% for fiscal 2024.
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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
Steven Madden, Ltd. (SHOO) : Free Stock Analysis Report
Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
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