Burlington Stores (BURL 7.73%), a major off-price retailer known for branded apparel, home, and seasonal merchandise, reported its fiscal second quarter 2025 results on August 28, 2025. The company delivered a clear earnings beat, with revenue of $2.70 billion versus $2.46 billion in the prior year period and adjusted earnings per share (EPS) of $1.59, up from $1.20 last year. These results were well above management’s initial outlook, which had called for sales to increase 5–7% and adjusted EPS of $1.20–$1.30. Comparable store sales growth of 5.0% matched last year’s performance. Management raised its full-year adjusted EPS guidance and highlighted continued momentum, but also flagged increased inventory levels and signaled a prudent approach for the rest of the year. Overall, the quarter reflected robust top-line and bottom-line execution, supported by a disciplined cost and expansion strategy.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| Adjusted EPS (Non-GAAP) | $1.72 | $1.20 | 43.3 % |
| Revenue | $2.70 billion | $2.46 billion | 9.8 % |
| Comparable Store Sales Growth | 5.0 % | 5.0 % | Flat |
| Adjusted EBIT Margin | 5.6% | 4.7% | 0.9 pp |
| Merchandise Inventory | $1.41 billion | $1.22 billion | 15.6 % |
| Adjusted SG&A (% of Net Sales) | 27.1 % | 27.0 % | Up 0.1 percentage points |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
What Burlington Stores Does and What Drives Its Results
Burlington operates an off-price retail model, offering branded clothing, home goods, and décor at discounts of up to 60% below traditional store prices. It sources products opportunistically, which means it buys from suppliers when prices are favorable and passes savings on to shoppers. Its nationwide network of over 1,100 stores is a core platform for reaching value-conscious consumers looking for deals on apparel, accessories, and home items.
In recent years, Burlington has focused on growing its store count, controlling inventory, and strengthening its low-price promise. Key to its business are competitive pricing, efficient inventory management, and expansion into new locations. Efficient supply chain operations and ongoing enhancements to the in-store experience, including new store formats, are also important for sustaining momentum. Burlington’s ability to adjust quickly to market trends, including changes in consumer tastes or economic pressures, is important for maintaining healthy sales growth and margins.
Key Highlights and Developments in the Quarter
beating both management’s guidance and market consensus. Management had forecasted sales would rise by 5–7%. Comparable store sales, a retail metric that shows growth for locations open at least a year, rose 5% and matched the prior year’s result. CEO Michael O’Sullivan cited “very strong margin and earnings performance” and linked the results to the “key Burlington 2.0 strategies,” the company’s multi-year approach to modernizing operations and customer experience.
Margins also saw meaningful improvement. Gross margin (GAAP) improved by 90 basis points to 43.7%. These gains were supported by merchandise margin expansion—Merchandise margin expanded, driven by lower shortages and reduced markdowns—as well as lower freight costs. With reduced markdowns on inventory and tight control of logistics expenses, Burlington managed to grow adjusted earnings faster than sales.
Store expansion remained a pillar of growth. Burlington ended the quarter with 1,138 stores, adding over 20 net new locations since the start of the year. This store count increase is in line with its long-term goal of doubling its presence to roughly 2,000 stores. Capital expenditures remain high as Burlington invests in new stores and ongoing improvements to existing locations.
Inventory management is an area to watch. Merchandise inventory rose 16.0% year-over-year, ahead of sales growth. However, comparable store inventory actually declined by 8%, signaling that most of the build was in “reserve” inventory—goods bought in advance to protect against supply disruption or to take advantage of favorable prices for future selling seasons. Management explained that about half of total inventory now falls in this reserve category, which gives it the flexibility to “chase” future demand, though the company continued its plan to return capital through ongoing buybacks.
Looking Ahead: Guidance and Investor Watch Points
With the strong second quarter, management raised its full-year adjusted EPS guidance to $9.19–$9.59 per share, up from $8.70–$9.30 earlier in the year. The sales outlook also improved slightly, now calling for total sales growth of 7–8%, compared to previous guidance of 6–8%. However, leadership signaled a more conservative approach for the second half. Guidance for comparable store sales in the third and fourth quarters remains flat to up 2%, with adjusted EPS for the upcoming quarter targeted at $1.50–$1.60, similar to last year’s $1.55 figure.
Key areas to watch in coming periods include the pace of inventory growth and Burlington’s ability to maintain margins amid possible headwinds such as supply chain cost changes or shifts in consumer spending. While management expressed confidence in its Burlington 2.0 initiatives and value-focused strategy, it plans to manage the business “conservatively and be ready to chase” if the economic environment changes.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
