Retail Stock to Watch: Burlington Stores Inc (NYSE: BURL)

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Burlington Stores Inc (NYSE: BURL) stock rose over 0.01% on 28th May, 2021 pre-market session (Source: Google finance) as the company posted better than expected results for the first quarter of FY 21 helped by stimulus checks, the vaccination rollout and pent-up consumer demand.

Burlington’s net income totaled $171 million, in the quarter ended May 1, compared to a loss of $333.7 million, in the year-ago period. Burlington Stores operated 784 stores at the end of the first quarter. It expects to open 100 new stores, while relocating or closing 25 locations, for a total of 75 net new stores this year. Due to the uncertainty surrounding the pace of the recovery of consumer demand and the ongoing COVID-19 pandemic, Burlington is not providing sales or earnings guidance for its current fiscal year. Merchandise inventories were $768 million compared to $896 million at the end of the first quarter of Fiscal 2019, which represents a 14% decline, while comparable store inventories decreased 19%. Reserve inventory was 35% of total inventory at the end of the first quarter of Fiscal 2021 compared to 34% at the end of the first quarter of Fiscal 2019. The Company has ended the first quarter of Fiscal 2021 with $2,080 million in liquidity, comprised of $1,531 million in unrestricted cash and $549 million in availability on its ABL facility.

BURL in the first quarter of FY 21 has reported the adjusted earnings per share of $2.59, beating the analysts’ estimates for the adjusted earnings per share of 92 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 35 percent to $2.19 billion in the first quarter of FY 21, beating the analysts’ estimates for revenue by 20.02%. The comparable store sales increased 20% compared to the first quarter of Fiscal 2019.

Additionally, as of the end of the first quarter, the Company’s share repurchase program, which remains suspended, had $348 million in remaining authorization. The company announced a make-whole call for the full $300 million outstanding principal amount of its 6.25% Senior Secured Notes due 2025, which were issued in April 2020. As a result, the Company is expecting a pre-tax debt extinguishment charge of approximately $30 million in the second quarter of Fiscal 2021.

For fiscal 2021, the company expects Capital expenditures, net of landlord allowances, to be approximately $470 million.

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