Burlington Stores Inc. delivered a quarterly earnings and sales beat to kick off the year — but its chief executive warned that more supply chain challenges could remain ahead for the retailer.
For the three months ended May 1, the New Jersey-based chain posted an adjusted income of $176 million, or earnings of $2.59 per share, compared with 2019’s adjusted income of $85 million, or earnings of $1.26 per share. Wall Street had projected earnings of just 83 cents per share. Revenues improved 35% to $2.19 billion, versus market watchers’ forecasts of $1.77 billion.
In a statement, CEO Michael O’Sullivan said he was “pleased” with the company’s first-quarter results, which were compared against the first quarter of 2019 due to the volatility in 2020’s fiscal numbers.
“There were numerous factors that contributed to improved traffic and consumer spending in the quarter — including the latest stimulus checks, the pace of the vaccine rollout and pent-up consumer demand,” he explained. “We were able to chase the very strong trend and maximize our share of this sales opportunity through strong execution of our Burlington 2.0 strategies.”
Burlington also logged comps that increased 20% from Q1 2019. However, the off-pricer sounded caution on the months ahead as it continues to face problems stemming from the broader pandemic-induced backlog of cargo at major West Coast ports, which has impacted many retailers across the board.
“The second quarter is off to a good start, but the go-forward sales trend remains very difficult to predict,” O’Sullivan said. “Meanwhile, expense headwinds in supply chain and freight have continued to deteriorate, and these are likely to weigh on our operating margin throughout the balance of the year.”
Burlington ended the first quarter with $2.08 billion in liquidity, including $1.53 billion in unrestricted cash and $549 million in availability on its asset-based lending facility.
While it did not provide earnings or sales guidance for the full year, the retailer updated its 2021 fiscal outlook for capital expenditures, which is expected to be approximately $470 million; depreciation and amortization, now roughly $260 million; and interest expense of about $68 million. It also reported plans to open 100 new stores, as well as relocate or close 25 outposts.