Burlington Stores Guidance Misses Estimates, Analysts Cut Price Targets

Burlington Stores Inc reported mixed second-quarter financial results on Thursday, with its third-quarter adjusted earnings per share guidance coming in below expectations.

Total revenue rose approximately 11% year-over-year to $3.002 billion, missing the $3.020 billion estimate. Adjusted earnings per share increased 38% to $2.37, beating the $2.18 estimate. The figure excludes tariff refunds and certain costs related to leases acquired through bankruptcy proceedings.

For the third quarter, Burlington expects adjusted earnings per share of $1.60 to $1.70, below the $2.03 estimate. The company projects sales of $2.954 billion to $3.009 billion, versus the $2.981 billion estimate.

Chief Executive Officer Michael O'Sullivan said: "We are pleased with our strong financial performance in the second quarter. Total sales grew 11% on top of strong growth of 10% last year. Comparable store sales grew 2% on top of 5% growth last year, for a solid two-year stack of 7%. Excluding the impact of tariff refunds, adjusted earnings per share grew 38% versus the second quarter last year, following 39% growth in the prior year period. This was driven by a 100 basis point expansion in our operating margin. This marks our 15th consecutive quarter of double-digit earnings per share growth, reflecting our continued ability to convert sales growth into margin expansion and superior earnings growth."

Burlington shares rose 0.6% to $291.65 in premarket trading.

Following the earnings release, these analysts adjusted their price targets for Burlington.

Morgan Stanley analyst Alex Straton maintained an Overweight rating on the stock and lowered the price target from $438 to $432.

Bernstein analyst Aneesha Sherman maintained an Outperform rating on the stock and reduced the price target from $365 to $355.

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