Burlington Stores Inc. logged a wide miss in profits and sales as the coronavirus pandemic kept its stores shuttered through the end of the first quarter.
For the three months ended May 2, the New Jersey-based company posted an adjusted loss of $312 million, or a loss of $4.76 per share, compared with Wall Street’s bets of a loss of $1.03 a share. Revenues declined 51% to $798 million, versus forecasts of $956 million.
Just two weeks before all of the chain’s stores were forced to shutter in mid-March, Burlington made the decision to cut back on its online presence — a move that the off-price retailer said would allow it to focus on in-store sales growth and store expansion. (At the time, e-commerce sales accounted for only 0.5% of its revenues.)
Currently, 332 Burlington locations have reopened. By this weekend, 402 outposts are set to open their doors, and the company expects to have “most of the balance of our stores” back in business by mid-June.
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“There is clearly pent-up demand, and our customers are responding positively to our clearance strategy,” CEO Michael O’Sullivan said in a statement. “That said, we do not know how long this will continue, as sales could slow down as we sell through our clearance merchandise. But as an off-price retailer, we are excited by the chance to turn our inventory and to pursue great opportunistic buys in what we expect will be a very strong off-price buying environment.”
Merchandise inventories this year fell 30% to $626 million, as Burlington aggressively sought to reduce inventory receipts during extended store closures. The company also noted that it expects markdowns to extend into the second quarter because inventory is “aged” and it predicts a “very promotional environment” for the first few months as retailers begin to open back up stores.
As part of its own reopening plan, Burlington has implemented several safety measures in an effort to keep employees’ and customers’ safe.
“The most important priority as we have reopened our stores has been to ensure very high standards for safety and social distancing,” O’Sullivan added. “This will remain the overriding priority for us.”
The chain said it has added signage to promote social distancing, created one-way entrances and exits, widened checkout lanes and increased spaces between customers and cashiers at the registers. What’s more, it said it was frequently cleaning high-touch areas and providing sanitization materials throughout its stores, including shopping cart wipes. Staff members are expected to be screened before coming back to work, and they will be required to wear face coverings while in the store. Gloves will also be provided to associates.
Much like other retailers, Burlington opted against providing an outlook for the full year due to uncertainties stemming from the COVID-19 health crisis. At the end of the first quarter, it had $1.63 billion in liquidity, including $1.48 million in unrestricted cash and $151 million from its revolving credit facility.
“We believe that we are well positioned to chase the sales trend or to pull back based on whatever situation we face in the coming months,” O’Sullivan explained.